Once considered industry friendly, New Brunswick's auto insurance regulator is pushing back
Wawanesa is asking for two rate increases in 2020, but will have to get by NB's Insurance Board
Robert Jones· CBC News· Posted: Feb 25, 2020 5:00 AM AT
Wawanesa is New Brunswick's largest auto insurance company and covers 77,000 vehicles. It increased rates 8.6 per cent in January but wants a second increase of 12.42 per cent in July. The amount needs the approval of the New Brunswick Insurance Board.
A rare request from New Brunswick's largest auto insurer for two rate increases this year is legal, but it will likely face intense scrutiny at the province's insurance board which has quietly been shedding its one-time reputation of being industry friendly.
The Wawanesa Mutual Insurance Company covers 77,000 private passenger cars in New Brunswick and raised rates just last month by an average of 8.6 per cent. It is now seeking permission to impose another 12.42 per cent increase on customers on July 1.
The company says it paid out $1.21 in claims and expenses in New Brunswick last year for every $1 its customers paid in premiums and has nowhere to go for the money to close that gap except to policyholders.
"We are not publicly traded and do not have shareholders," said Wawanesa's Brad Hartle in an email to CBC News.
But applying for an auto insurance rate hike in New Brunswick lately has been no guarantee of receiving it.
Marie-Claude Doucet is Chair of the New Brunswick Insurance Board and said Wawanesa's attempt to win a second rate hike in 2020 is "not usual" but is permissible and will be the subject of a full hearing.
"The board has authority over proposed rate changes by [auto] insurers," said Doucet.
"It takes a lot of resources from the insurance company to apply twice in a year so it's not typical but it does happen."
No rubber stamping
Doucet was appointed to run the insurance board in late 2016 just as financial results of insurers began sagging across Canada and her organization has dealt with a parade of companies applying for significant rate hikes in the wake of those troubles.
During her tenure, the board has granted some of the increases requested by companies in full but it has also knocked a number of them down following detailed reviews and hearings.
In 2018 the board slashed a proposed 18.2 per cent increase in rates to New Brunswick's highest risk drivers to 6.2 per cent after finding faults in the rate application by the non-profit industry collective that handles bad drivers, known as the Facility Association.
In 2019 the group returned and asked for a 22.3 per cent increase, but the board found problems again and awarded 14.4 per cent.
New Brunswick's third-largest insurer Intact, had a combined 7.4 percentage points shaved off its last two requested increases in 2017 and 2019 and last month, New Brunswick's second-largest insurer, Economical, was approved for a 6.1 per cent increase. That was barely half of the 11.9 per cent it had asked for.
Michele Pelleiter, New Brunswick's Consumer Advocate for insurance, says the current insurance board has issued a number of decisions that benefit consumers including a decision last month allowing Economical Insurance just half the rate increase it requested for 2020 (Maggie MacPherson/CBC)
In all five of those cases the hearings were conducted by three-person panels headed by Doucet. She also wrote the final decision in each case, a sign of how she has taken charge of the organization.
In 2019 the board held a record 27 hearings, 16 related to private passenger car insurance most of which Doucet conducted personally
"If I am able to handle the workload yes I absolutely sit in on the hearings as long as there are no conflicts," said Doucet who has a psychology degree, a law degree and a masters of business administration degree.
Michele Pelletier is New Brunswick's Consumer Advocate for Insurance and says although companies have been winning some substantial rate hikes from the insurance board, policyholders have been getting fair treatment at hearings under Doucet with decisions sometimes in their favour.
"I think she has the respect of all the parties," said Pelletier.
Previous administration
That's a shift from the insurance board's early years when it appeared to be tilted toward the interests of insurance companies under its former chair, Paul D'Astou.
In 2010 New Brunswick's office of the Attorney General challenged two rulings of the insurance board under D'Astou at the New Brunswick Court of Appeal. It argued the body was allowing companies to earn too much profit, limiting questions that could be asked of companies during rate applications and giving no reasons for decisions it made.
The Appeal Court ruled in the Attorney General's favour in each case.
In 2013 the insurance board found more controversy for soliciting donations from insurance companies to support its annual golf tournament fundraiser.
The event allowed companies the board regulates to buy advertisements on golf holes in support of the board's chosen charity and have company representatives play in the tournament alongside board members in exchange for an entry fee.
Paul D'Astou is currently principal secretary to Premier Blaine Higgs but ran New Brunswick's insurance board until 2015. During his term the board sparred with the office of the attorney general which argued insurance companies were being allowed to make too much money. (CBC)
There have been no similar incidents under Doucet.
In a statement Monday, New Brunswick's Office of the Attorney General, which intervenes in rate hearings with lawyers and actuarial experts on behalf of the public said it has been able to win lower auto insurance rates from the board than companies have requested 11 times since 2017, around the time Doucet took over.
"Over several years of intervention on behalf of the public interest, the Attorney General has been successful in achieving lower rates for automobile policyholders in many cases," said spokesperson for the office of the attorney general Paul Bradley.
The board currently has several decisions pending from hearings it held earlier this winter including an application for a 50 per cent auto insurance rate hike from Sonnett and a 51 per cent increase from Echelon
A hearing into Wawanesa's application for a second rate increase for 2020 is likely later this spring.
Robert Jones has been a reporter and producer with CBC New Brunswick since 1990. His investigative reports on petroleum pricing in New Brunswick won several regional and national awards and led to the adoption of price regulation in 2006.
David Amos Methinks folks should ask Mr Duff and Mr Woodside of the New Brunswick Insurance Board why I have read enough of this malicious nonsense N'esy Pas?
Chantal LeBouthi The Wawanesa Mutual Insurance Company with $3 billion in annual revenue and assets of more than $9 billion
David Amos
Reply to @Chantal LeBouthi: Methinks folks would get a hoot if they could listen to the voicemail I just left with Wawanesa Mutual Insurance Company's Senior Vice President, Chief Legal Officer and Corporate Secretary N'esy Pas?
David Amos Methinks Michele Pelletier, the Attorney General and the Wawanesa Mutual Insurance Company should recall my concerns about New Brunswick being a "no fault jurisdiction way back in 2007 N'esy Pas?
David Amos
Reply to @David Amos: FYI the lawyer Michele Pelletier just called me but I have no proof of contact because she called from a private number Mr jones should go Figure why she would do such a thing
Bruce Martin Instead of complaining about rate rises why not buy insurance company shares? Intact has been one of the TMX's better performers and pays a good dividend as well. The same rationale works for banks and telcos.
David Amos
Reply to @Bruce Martin: Methinks we may already own some shares if they are a publicly held company However" Mutual" is a legal term that lawyers love to use for their client's benefit not ours N'esy Pas?
Mike Miles
Reply to @Bruce Martin: I can promise you that most New Brunswickers don't have the extra income to invest. So yeah speak for yourself. This is just another BS way the people of this province are getting hosed by companies that make millions in profit.
David Amos
Reply to @Bruce Martin: BTW According to the wannabe Yankee president Mr Bloomberg The Wawanesa Mutual Insurance Company ain't selling shares in their questionable company
David Amos
Reply to @Mike Miles: I concur
Marc Bourque Last week I just renewed my car insurance,I never had an accident or a claim....it went up 200.00........
David Amos
Reply to @Marc Bourque: Methinks you can thank the Insurance Bureau of Canada for that nonsense N'esy Pas?
Had an accident in Saint John? You may get a bill from the city
Auto insurance policy may or may not cover emergency response fees
Connell Smith· CBC News· Posted: Feb 27, 2020 7:00 AM AT
Firefighters in Saint John responding to an accident. In the near future, out-of-town visitors may be billed for the emergency response. (CBC)
Saint John Council will vote next month on a proposal to charge fees to recover costs for many fire department responses.
One of those charges would see bills mailed to non-residents involved in car accidents inside city limits.
The fees are included in a long list of options under consideration to deal with the city's anticipated $10 million deficits in 2021 and 2022.
Other emergency response fees are being considered for commercial, industrial or institutional fires, hazardous material calls and such things as high angle or water rescues and elevator incidents.
Rothesay body shop owner David Brown thinks the motor vehicle response charge is a bad idea that will only create division between communities, and might even discourage people from calling 911.
"I think that's ridiculous," said Brown, who owns Autobody Plus. "I hope that never passes, anything like that where we start to segregate towns and start to isolate people. We should be light years past that by now."
Saint John deputy chief Rob Nichol says the department currently does not have fees for any emergency service.
But such charges are not unusual in some Canadian provinces.
Ontario and Alberta communities have the option to charge vehicle owners directly or indirectly for responses to motor vehicle accidents.
David Brown of Autobody Plus in Rothesay. "We should be light years past that by now." (Graham Thompson, CBC)
Ontario also pays local fire departments $450 dollars for the first hour for a response to accidents on provincially designated highways.
Those fees are then passed along to the vehicle owner.
Alberta's Safety Codes Act allows municipalities to charge for any emergency service they choose. For the City of Red Deer, that extends to all emergency responses, even house fires.
In the case of motor vehicle accidents the car owner is charged $615 for the first hour or part hour that emergency responders are on scene, and half that amount for every half hour beyond that. The fee is the same for both residents and non-residents.
The Insurance Bureau of Canada says many, but not all, motorists in New Brunswick will then be able to pass those fees along to their insurance companies.
"Insurance would cover it if you had collision coverage," said Amanda Dean, the bureau's vice president for the Atlantic region. "It's optional. If it's an older vehicle, you don't necessarily have that coverage."
Leased vehicles, in all cases, would be covered.
But Dean says, if insurers find themselves processing a lot of those claims, it could lead to an increase in car insurance rates.
David Amos Methinks the mayor must amaze a lot of folks with each passing day about just how dumb he truly is N'esy Pas?
David Amos
Reply to @David Amos: However I know of somebody who is even dumber and she speak for the IBC. Methinks somebody should inform the mayor that New Brunswick is a "No Fault" jurisdiction before he falls this BS N'esy Pas?
The Insurance Bureau of Canada says many, but not all, motorists in New Brunswick will then be able to pass those fees along to their insurance companies.
"Insurance would cover it if you had collision coverage," said Amanda Dean, the bureau's vice president for the Atlantic region. "It's optional. If it's an older vehicle, you don't necessarily have that coverage."
David Amos Reply to @David Amos: Better yet methinks the mayor should call Michele Pelleiter, New Brunswick's Consumer Advocate for insurance and ask her about our conversation about the insurance Industry and of my calls Wawanesa's lawyers, NB's Insurance Board on Feb 25th and the proof of my calls and emails to the IBC et al since 2006 which can be found on the Internet N'esy Pas?
Johnny Horton Just yet another reason for new business to set up outside SJ. Potential Employees won’t want to have to travel daily into the city.
David Amos
Reply to @Johnny Horton: Cry me a river You claim to live in the middle of nowhere and hardly ever come out of the woods even to visit your "Hub" in Sussex. sSo why should you care about the doings in the "Loyalist City" unless you truly are an Irving shill?
Roy Kirk Seems like the kind of approach that should be adopted on a regional basis, or province-wide. Good for the goose -- good for the gander.
Johnny Horton
Reply to @Roy Kirk: Really so through no fault of your own 911 gets called snd you now owe hundreds of dollars... Yes brilliant plan...q
David Amos
Reply to @Roy Kirk: Do you work for the Insurance Bureau of Canada???
