Wynne says fighting auto insurance fraud is best way to cut rates
Published Tuesday, February 5, 2013 5:10PM EST
TORONTO -- Premier-designate Kathleen Wynne said Tuesday she's willing to talk with the NDP about their demand for a 15 per cent cut in auto insurance premiums, but she's more interested in tackling fraud in the system.
NDP Leader Andrea Horwath demanded the rate cut after premiums rose five per cent in 2011, even though regulatory changes cut benefits for motorists and reduced statutory accident payouts from insurers by almost $2 billion -- or 50 per cent.
"I have heard what Andrea Horwath has said, (and) it's one of the things that she and I will be talking about," Wynne said during a conference call with ethnic media.
"But I am specifically interested in reducing fraud in the system, and that will save money."
The Insurance Bureau of Canada said fraud costs Ontario drivers about $1.6 billion a year, and adds between $116 and $236 to the average yearly premium paid by motorists.
The industry lobby called on the government to implement the recommendations of a task force on insurance fraud, something Wynne said she intends to do.
"I am going to be very interested in implementing those recommendations, and that will save the industry money," she said.
"I'll be interested in looking at the savings that would come from those recommendations, and then working with the industry to see how those savings could be passed along to premium holders."
The task force set up by Finance Minister Dwight Duncan found 83 per cent of auto insurance fraud in Ontario takes place in the Greater Toronto Area, and recommended the government implement a provincewide licensing scheme for the towing industry.
It also called for rule changes to make it clear that insurers are required to provide claimants with a full explanation when they refuse to pay for treatment, assessment or other benefits.
The NDP calculated a 15 per cent reduction in premiums would save the average Ontario driver about $226 a year, and said they too want to combat fraud.
"No one disagrees that we need to crack down on fraud, but we also need to get cracking on relief for drivers," said NDP house leader Gilles Bisson.
The Progressive Conservatives said the rate cut demand sounded to them like the NDP's opening bid in its pre-budget negotiations with the minority Liberals, who need the support of at least one opposition party to avoid an election this year.
"I don't think Andrea Horwath has a clue what she's talking about when she sweeps her hand across the front of the cameras and says a 15 per cent cut," said PC finance critic Peter Shurman.
"There definitely has to be a good look taken at that industry, but to say that you can simply create a 15 per cent cut without knowing the state of the bloated aspects of the auto insurance industry is silliness."