Ontario
defends three-month delay in auto insurance rate cut |
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The Ontario government is
defending a delay in cutting auto insurance rates, blaming an administrative
backlog in processing insurance company rate filings. |
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The Liberals said yesterday all
new rates will be approved by July 15 -- three months after the April 15 date
they initially set for lower new rates to take effect. |
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"It will take some time
for people to see those, but already as of April 15 people are seeing decreases
in their rates, and we're continuing to work to bring in other reforms so we
can continue to see rates go down," said Diane Flanagan, spokeswoman for
Finance Minister Greg Sorbara, who is on vacation. |
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When the Ontario government was
sworn in last Oct. 23, Premier Dalton McGuinty immediately froze insurance
rates for 90 days, promising that rates would fall on average by 10 per cent.
Insurers were also required to file new rates by Jan. 23. |
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But that was the first time all
of the province's 61 insurance companies filed rate changes at once, and many
filings were complex, Flanagan said. |
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More staff were hired through
an actuarial firm to process the documents, Flanagan added. |
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On April 15 the government
approved decreases averaging 10 per cent for firms representing 55 per cent of
Ontario's auto insurance market. |
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However, the remaining 45 per
cent of the market won't get approval to drop rates until July 15. Approval
must be granted before customers of those companies see rate decreases, and
only when they get their renewals. |
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A recent report by the London
Free Press said that many drivers will have to wait until the end of October to
see decreases -- a delay that will cost them about $575 million. |
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"The promises were
unrealistic to begin with," said New Democrat finance critic Michael Prue. |
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"There was no way they
could effect that kind of reduction in the time frames they were talking about.
To compound that, they did not hire sufficient staff to process the
applications." |
Depending on when people renew
their auto insurance, it could be next summer before some people see the
promised rate decrease, Prue said.
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