Second Session, 45th General Assembly
54 Elizabeth II, 2005
AN ACT TO AMEND THE AUTOMOBILE INSURANCE ACT
Received and Read the First Time
HONOURABLE DIANNE WHALEN
Minister of Government Services
Ordered to be printed by the Honourable House of Assembly
This Bill would amend the Automobile Insurance Act.
Clause 1 of the Bill would remove the restriction on fixing insurance rates for groups.
Clauses 2, 3 and 4 of the Bill would revise the provisions of the Act relating to the powers of the Public Utilities Board in the rate approval process by providing that the Lieutenant-Governor in Council may make regulations respecting the exercise of those powers.
Clause 5 of the Bill would give the Lieutenant-Governor in Council the authority to make regulations
(a) respecting the approval, prohibition or variation of rates filed with the Public Utilities Board; and
(b) respecting types of information an insurer would be required to provide to an insurance claimant.
Clause 6 of the Bill would amend the Act to provide for a reduction of at least 5% in insurance rates related to private passenger vehicle insurance unless an insurer could demonstrate to the board that other rates were justified.
Clause 6 of the Bill would also amend the Act to provide for a refund of premiums where a person had been charged an amount based on his or her age, sex or marital status.
AN ACT TO AMEND THE AUTOMOBILE INSURANCE ACT
1. S.46 Rep.
2. Ss.49 and 50 R&S
3. S.51 R&S
4. S.53 R&S
5. S.60 Amdt.
6. Ss.62.1 and 62.2 Added
Be it enacted by the Lieutenant-Governor and House of Assembly in Legislative Session convened, as follows:
1. Section 46 of the Automobile Insurance Act is repealed.
2. Sections 49 and 50 of the Act are repealed and the following substituted:
Insurer to file rates
49. (1) An insurer shall file the rates it proposes to charge for automobile insurance with the board.
(2) The board shall, in accordance with the regulations, approve, prohibit or vary the rates filed under subsection (1).
50. An insurer shall not charge rates that have not been filed and, where they are required to, been approved by the board or considered to have been approved under this Act.
3. Section 51 of the Act is repealed and the following substituted:
Change in rates
51. Where an insurer wishes to make a change with respect to the rates filed with the board, the insurer shall file the rates it proposes to charge with the board and the board, where required to by the regulations, shall approve, prohibit or vary the change.
4. Section 53 of the Act is repealed and the following substituted:
Approval of rates
53. Notwithstanding subsection 49(2), where the board, in accordance with the regulations, does not approve, prohibit or vary, in whole or in part, the rates referred to in subsection 49(1), or the change in rates filed under section 51, within the time limits set by the regulations the proposed rates shall be considered to have been approved.
Investigation by board
53.1 (1) Where at any time the board considers that rates charged or proposed to be charged by an insurer are too high the board may investigate those rates.
(2) Where, after an investigation under subsection (1), the board determines that the rates charged or proposed to be charged by an insurer are too high, the board may order the insurer to make a change to the rates the board considers appropriate.
5. Subsection 60(1) of the Act is amended by adding immediately after paragraph (d) the following:
(d.1) respecting the approval, prohibition or variation by the board of rates filed by an insurer under section 49 or 62.1 or with respect to changes to rates filed under section 51;
(d.2) delegating to the board power to make rules or policies respecting the manner and timing of filing of rates with the board;
(d.3) requiring an insurer to provide the types of information set out in the regulations to a claimant, who is, or alleges he or she is, entitled to recover from an insured covered by a motor vehicle liability policy or under a contract;
(d.4) respecting the time and manner of providing information referred to in paragraph (d.3);
6. The Act is amended by adding immediately after section 62 the following:
62.1 (1) Notwithstanding paragraph 2(1)(l), in this section
(a) "base rate" means the rate approved by the board and specified in an order of the board and from which all other rates are derived by way of the application of differentials; and
(b) "rates" means base rates.
(2) Effective August 1, 2005, the rates for all types of coverage charged by an insurer for private passenger automobile insurance as approved by the board shall be reduced by at least 5%.
(3) Not later than September 1, 2005, an insurer that is reducing its rates by at least 5% shall file with the board the rates for all types of coverage it proposes to charge for private passenger automobile insurance.
(4) Notwithstanding subsection (2), an insurer may, not later than September 1, 2005, apply to the board for the approval of rates that have not been reduced by at least 5% and the board shall approve, prohibit or vary the rates proposed to be charged by the insurer.
(5) Where, as a result of an application under subsection (4), the board directs a reduction in rates in effect at the time the application was made, the reduction is considered to have taken effect on August 1, 2005.
(6) Where, as a result of an application under subsection (4), the board approves no change in the applicant insurer's rates, or an increase in those rates the board's decision shall take effect on the date the board may determine.
(7) This section applies to all contracts of insurance for private passenger automobiles in effect on the date this section comes into force and to all contracts entered into from that date.
(8) Where, as a result of this section, there is a difference between the rates agreed to by an insurer and a person insured under a contract at the time the contract was entered into and the rates the insurer is permitted to charge for the same coverage as a result of this section, the insurer may credit the amount of the difference to the insured on the premium to be paid for renewal of the contract, where the contract is renewed, but the insured is entitled to a refund of the difference where the insured terminates the contract or where the insured does not renew the contract with the insurer.
(9) Notwithstanding subsection (8), where a contract was entered into or renewed after August 1, 2005 between an insured and an insurer that makes an application under subsection (4), a rate reduction ordered by the board shall be credited against the premium paid or payable under the contract or, where the premium was paid in full, the reduction shall be refunded to the insured.
(10) In this section, "private passenger automobile" refers to vehicles used for the purposes listed under the heading "Type of Use-Private Passenger" and in the automobile insurance statistical plan prepared under section 82 of the Insurance Companies Act.
(11) This section applies to the Facility Association with respect to the insurance placed through the association.
(12) The reduction in rates required by this section are in addition to a reduction in rates that an insurer is required to make under section 62.2.
Rates based on age, sex or marital status to be reduced
62.2 (1) Where, on August 1, 2005, an insurer, in a contract in effect on that date, has charged a person insured under the contract rates based, in whole or in part, on the age, sex or marital status of the insured person, and the rates are, as a result, higher than the person would have been required to pay for the same coverage if his or her age, sex or marital status had not been take into consideration, the difference between those rates shall be refunded to him or her.
(2) Notwithstanding subsection (1), where the time remaining under the contract is less than a year, the refund shall be reduced proportionally.
(3) Notwithstanding subsection (1), where a contract that is in effect on the day this section comes into force expires within 3 months of that day, the insurer may credit the amount of the refund, calculated under subsection (1), to the insured on the premium to be paid for renewal of the contract, but the insured is entitled to the refund if he or she requests it or if he or she does not renew the contract with that insurer.
(4) Notwithstanding subsections (1) and (3), where a person is paying the premium under his or her contract in monthly payments, the insurer may credit the amount of the refund against the payments remaining on the contract.
(5) This section applies to the Facility Association with respect to the insurance placed through the association.
7. This Act comes into force on July 1, 2005.
©Earl G. Tucker, Queen's Printer