The province will not renew the five-per-cent cap on increases to auto insurance implemented by the previous NDP government when it expires on Saturday.
“Allowing this limitation to expire is necessary to ensure a sustainable industry that can best serve the needs of Albertans,” Charlotte Taillon, who is acting as press secretary for Alberta Finance, said in an emailed response Friday to a question from CBC News.
“Our government will allow the Automobile Insurance Rate Board (AIRB) to fulfil its mandate in setting auto insurance rates.
“We believe this independent board is best positioned to evaluate the health of the insurance market and we respect their expertise and experience in the field. To be clear, companies still must go through the rate board to justify increases.”
Fate of NDP-imposed cap on auto insurance still unknown
Under the cap, which was first implemented in 2017 via a ministerial order, each insurance company could not exceed an average of a five-per-cent increase in rates across its entire vehicle insurance business.
Celyeste Power, vice-president Western Canada for the Insurance Bureau of Canada, said the cap didn’t limit increases to auto insurance as it reduced choice in the market.
“I think it has some unintended consequences so I think it’s good to put it back to the rate regulator to do the jobs that they are intended to do,” she said.
NDP leader and former premier Rachel Notley said Friday her government implemented the cap to protect Alberta drivers from rising insurance costs after the AIRB approved too many requests for premium increases.
“We saw very high jumps in rates being approved,” Notley said. “When we saw that happening, that’s when we stepped in and said no. This is not the time to be doing that.” (article courtesy of CBC)
Notley said she finds it ironic that Premier Jason Kenney and the UCP is making it more expensive for Albertans to drive after spending the pre-election period cultivating opposition to her government’s carbon tax.
“This is a clear decision to help out his corporate insiders donors at the expense of regular working Albertans across the province,” she said.
Power rejected Notley’s suggestion that the AIRB mostly rubber-stamped increases requested by industry. She said panellists asked a lot of questions and had plenty of expertise.
“I certainly don’t think we’re going to see anything like a free-for-all,” she said. “They have a very important job and an independent job. Unfortunately because of the rate cap that was certainly taken away from them.”