PUB should tip its hand on cap: lawyer
Public Utilities Board chair says it wasn’t asked to make recommendations on minor-injury compensation cap, just to review
A lawyer at the public hearings underway at the Public Utilities Board (PUB) — which is reviewing automobile insurance rates in the province — said Monday the PUB’S final report to the government would have more punch if it contained recommendations, particularly on whether or not a minor-injury compensation cap should be imposed.
But PUB chair Darlene Whalen said the board will not make recommendations on a minor-injury compensation cap when it files its report to the provincial government in the fall.
That statement took Jerome Kennedy, who is representing the Campaign to Protect Accident Victims at the hearings, a little by surprise.
He referred to an April 16 letter written to Whalen by Service NL Minister Sherry Gambin-walsh in which the minister stated, “I look forward to receiving your recommendations.”
Kennedy said there appears to be a conflict as to what the PUB understands the report should contain and what the minister expects.
Whalen, however, said the PUB is clear on what its job is. She said the PUB is guided by the terms of reference given to it by the provincial government.
“We will not be making recommendations on a cap,” Whalen said. “Where we are asked to make recommendations, we will. We are guided by the terms of reference.”
In the terms of reference on the PUB’S website, there are a couple of instances where recommendations are required.
One is under Phase I, which asks that the PUB conduct an audit of taxi closed claims to determine the causes of poor claims experience, including details regarding the underlying causes of loss and high claim costs, and provide any recommendations to reduce claim costs and reduce rates.
The second reference is under Phase II, where the PUB is asked to review existing private passenger automobile insurance products, and assess and recommend possible options to contain costs.
The minor-injury compensation cap comes under Phase III in the terms of reference and asks that the PUB review the impact on rates of a monetary cap on claims for non-economic loss for minor/mild injuries and the implications of such a cap for claimants.
Kennedy said while there are many important issues the PUB has been asked to review, the minor-injury compensation cap is a key issue.
“The question becomes, once you do a review, what happens with it?” Kennedy asked. “And (the PUB) will make certain findings and then I assumed the PUB would make recommendations to the government.
“The response of the chair seemed to be they will be making recommendations on certain issues, but not on others.”
In the automobile insurance review backgrounder on the PUB website, it states under the heading “2017 Automobile Insurance Review” that, “At the end of the review process, the board will submit a report and recommendations to government, as per the terms of reference.”
Kennedy said he expects the issue will have to be raised again at the hearings for clarification.
“The letter I referred to from the minister clearly outlined her expectation that she looked forward to the recommendations of the Public Utilities Board, so as we move through this, obviously we will be encouraging the board to make recommendations, because we want the government to have the fullest possible information along with the expertise of the Public Utilities Board in making the decisions they have to make.”
In regard to the cap, Kennedy said if it is imposed, the impact on accident victims will be significant.
“Unless you find yourself in the situation, then it doesn’t concern you as much. But the reality is … someone who would receive an award for pain and suffering in an accident today of $25,000 to $30,000 … with a cap in place could receive $5,000 if a $5,000 cap is brought in.
“So, I don’t think people realize the implications of what we are dealing with here.”
Taxi operator Doug Mccarthy said taxi drivers have known for some time that the insurance premiums being collected from taxi drivers are far less than what is being paid out in claims. The problem, he says, is that all taxi drivers are lumped into one category no matter what their driving record is.
Mccarthy said there are taxi drivers who have been on the road for 25 or 30 years with no accidents and no tickets who
pay the same insurance premiums as taxi drivers with poor records, because the only insurance option for taxi drivers is through Facility Association.
“There are people out there in the industry who have had multiple accidents and they should be the ones paying,” Mccarthy said. “Those drivers who’ve driven for 25 and 30 years with no accidents and no tickets should not be paying the same rates, but we are.”
Mccarthy has told the PUB that insurance for his taxi is $8,200 for the year, based on the last premium increase in March.
“If I had more places to shop (for insurance) the rates should go down. Or if I’m insured based on my record, my rates should go down — they should not be set by the fact that I drive a taxi,” he said.
“Companies are taking cars
off the road or reducing insurance coverage they have, and hoping they don’t have an accident where the car is written off. If I can take collision off my car I can save a few dollars, but if I have an accident and the car is written off, then I’m out $15,000 or $20,000.”
Mccarthy said he hopes the PUB review will shed light on what is causing the high payouts in the taxi industry and the need for Facility Association to keep increasing premiums.
Consumer Advocate Dennis Browne said the PUB’S review is important for the people of the province. He stated that during the hearings, issues pertaining to the taxi industry, the cost of automobile insurance, proposals regarding a minor-injury compensation cap and road safety will be examined.