Industry pans public insurance

Shannon Hagerman
The Daily Gleaner
November 13, 2003

 

The Insurance Bureau of Canada
brought in Lawrence Solomon to
talk to the committee
examining a public auto
insurance system Wednesday.
(The Daily Gleaner
Stephen MacGillivray Photo)
A legislature committee with the job of choosing the ideal public automobile insurance regime for New Brunswick drivers was urged to scrap the idea by most presenters speaking Wednesday at a hearing in Fredericton.

 

Most officials who testified in front of the select committee on public automobile insurance didn’t want to talk about public auto insurance, but instead warned of potential problems for drivers and the taxpayers if a government-run system is adopted.

Liberal MLA Bernard Richard said it is the same message the committee has heard around the province, orchestrated by the insurance industry.

“It is clear that there is a strategy from the industry, that they have been sharing talking notes,” he said.

“I think there is a lot of overkill, to be honest with you.”

On Wednesday, the Insurance Bureau of Canada picked up the tab to fly to New Brunswick a columnist who has blasted the idea of public insurance in national newspapers.

Lawrence Solomon, of Energy Probe, was also accompanied by a media relations agent.

Richard said insurance companies can appear, or pay individuals to appear, as many times as they wish under the public hearing process.

However, he said, it won’t change the mandate of the committee, which has been asked to recommend the best public insurance model for the province.

“It is just the same presentation, essentially that is being made over and over again,” he said.

“I think it’s almost counterproductive. You get tired of it. It is very redundant and repetitive.”

The organizations warning of problems in the public system on Wednesday included the Canadian Federation of Independent Business, the New Brunswick Law Society, Olmstead Insurance and the Insurance Brokers Association of New Brunswick.

Don Olmstead, owner of St. Stephen-based Olmstead Insurance, told committee members Wednesday that moving to a public system would hurt his company.

He said it would cut out more than a half of his business, even if the committee adopts a system, such as Quebec’s, in which brokers sell public insurance to drivers.

“The Quebec system is the best of the bad lot,” Olmstead said after his presentation.

He said there will be higher accident rates if New Brunswick moves to a public system, citing statistics showing drivers use less care when covered by public insurance.

Bruce Noble, from the Law Society of New Brunswick, said the group would like New Brunswick to hold onto its tort-based legal system, which allows accident victims to sue for compensation.

The law society is urging the committee to choose a “public tort” system that would see insurance delivered by a provincial corporation, but allow victims to sue for accident benefits. This is similar to the public auto insurance system in British Columbia.

If this approach won’t bring rates down far enough, the law society wants the province to create dual insurance systems.

Private-sector insurance coverage would continue for some drivers, while other drivers could get insurance from a “parallel public insurance” regime.

It would be up to drivers to choose which system they want to be covered by. This model would also be cheaper to implement in New Brunswick, the law society argues.

“By choosing such a parallel system, the individual would be foregoing his or her common-law right to sue for full compensation, and would be agreeing to whatever caps or no-fault regime is in place,” states the law society’s written brief.

Richard said the lobbying won’t affect the committee’s final report, which will recommend the best public system to adopt in New Brunswick.

“It doesn’t hurt, but it doesn’t help at all either,” he said. “We know what our mandate is and at the end of the day, we will respect that mandate.”

The Fredericton hearings represent the final public sessions for the committee. It has been on a cross-New Brunswick tour since Oct. 21.

The hearings wrap up today at the Sheraton Fredericton Hotel, where almost 10 insurance companies and associations are expected to testify.

The committee will make recommendations to the Conservative government, which will decide whether the group’s findings will be implemented.

No date has been set as to when the committee will release its recommendations.

NDP Leader Elizabeth Weir said it will depend on the length of time it takes for an actuarial study to be completed that will gauge potential insurance premium savings under the model the committee recommends.

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