The province is looking at reforms to address car insurance rates for Albertans. The proposed reforms would begin on January 1, 2024.
The current rate pause will remain in effect to ease the burden on Alberta drivers until the end of 2023. However, proposed reforms for 2024 would not impose a dynamic price ceiling on the rate increases insurers can request but would help control how they are distributed among customers, particularly those with good driving records.
"Any rate increases in 2024 will be carefully monitored to ensure they are reasonable and justifiable. Albertans should continue to shop around to find the best insurance coverage for them," the province stated.
According to the province, the government will be taking further action to amend regulations, ensuring that insurers must offer payment plan options so Albertans would not have to pay the full amount for their coverage upfront. These changes would ensure the auto insurance industry can continue to cover claims costs and protect Alberta drivers while providing more relief to Albertans.
Additionally, changes would grant Alberta’s Automobile Insurance Rate Board (AIRB) the authority to direct auto insurers to return premiums to Albertans in years when insurance industry profits are significantly higher. AIRB could also request a rate filing from an insurer at any time to review and possibly lower auto insurance rates if needed.
The issue of insurance was one of several key topics addressed in the throne speech earlier this week. The throne speech, similar to this latest announcement from the province stops short of calling for a price ceiling on insurance rate increases.
"...Although Alberta’s government supports the consumer choices and other advantages that our free-market insurance system provides, our insurance industry must understand that when it provides a product that effectively all Albertans are required to have, consumers must be protected from undeserved spikes in the costs of those products..." a portion of the throne speech read.
According to a previous report by Ernst & Young LLP, Albertans pay some of the highest insurance rates in the country.
The government has commissioned an in-depth analysis by an external consultant concerning longer-term reforms. A draft report is expected by the end of 2023, with the final report slated for the first quarter of 2024. The results of this analysis will inform the government’s long-term reforms.
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