Full disclosure for insurance industry

Re. “Insurance industry sounds alarm,” Aug. 15

There are several incomplete and somewhat misleading statements reported in this article. These require elucidation.

In 2002 to 2004 the insurance industry in Alberta engaged in something called “rate shocking.” Some young people were asked to pay $7,000 or $8,000 per year for auto insurance, a shocking amount, even by today’s measure. The government reacted by bringing in basic insurance rate controls, and also brought in the Minor Injury Regulations (the “cap”). It took a few years, but things settled, and the system is now working as it was intended.

But last fall, the current government suspected that the insurance industry was about to engage in another round of rate shocking.

Some insurers were not taking their increases (approximately three or four per cent per year), and it was thought they were going to “save up” and then suddenly bring down a 20 per cent increase.

This action would certainly have caused auto insurance premium uncertainty, so the government passed a regulation prohibiting any increases greater than five per cent in one year.

Insurers have since complained they have being victimized by this and there is a crisis.

The concept of “losing money” is something that can be checked. That is, it could be checked if the insurance industry would disclose their full and complete income and expense information.

The government has indicated they are engaging in a full review over the next year, and they expect the insurance industry to provide full and complete income and payout data.

The Alberta Civil Trial Lawyers Association advocates for a strong civil justice system that protects the rights of all Albertans. We also look forward to seeing that unbiased disclosure is made, so that correct decisions can be made.

Mark E. Feehan, president, Alberta Civil Trial Lawyers Association