Government needs to move urgently to implement new model by 2027
Today, Bill 47, the Automobile Insurance Act, was given Royal Assent in the Alberta legislature. After the legislation was passed into law, Aaron Sutherland, Vice-President, Pacific and Western, Insurance Bureau of Canada (IBC), issued the following statement:
“Alberta’s insurers congratulate the government on the passage of Bill 47 and the Care-First model, which represents the most ambitious transformation of the auto insurance system in provincial history. The government must now move urgently to finalize regulatory details of the new model to have it in place by January 2027.
“For the system to be successful and deliver savings to Alberta drivers, the government will need to strike a balance between the benefits provided to those injured in collisions and the amount of litigation that remains in the system. The evidence is clear – the more lawyers are involved in the auto insurance system, the less money drivers will save. To ensure long-lasting affordability, the government must remain steadfast in eliminating the sky-high legal costs plaguing the current system.
“Fixing the challenges in the current system will be critical to the success of the new auto insurance model. Alberta’s insurers are now in the third consecutive year of government rate caps and are paying out $1.17 in claims and expenses for every $1 earned in premiums. This is not sustainable. The rate cap has undermined the competitive market, forcing some insurers to leave the Alberta market altogether and causing confusion and frustration for drivers, who increasingly face challenges securing the coverage they need.
“As Alberta designs its new auto insurance system, it must work to attract auto insurers back to the province by leaving rate-setting to insurers, cutting red tape and letting the competitive market create the conditions for lasting affordability.
“Alberta’s insurers are eager to be part of the solution and will continue to put forward ideas on how to improve care and affordability for drivers today and in the future.”
