By Harv Lewin:
September 8, 2010 marks the 23rd anniversary of an article in the Toronto Star announcing that our then Premier, the Hon. David Peterson, and his Liberal government had a very specific plan to lower insurance rates.
In 1987, this announcement was a culmination of intense lobbying on the part of the insurance industry to convince our provincial government that they were losing money on property, casualty, and auto insurance and, without the help of the provincial government, they would no longer write business in Ontario and force our government into providing government insurance such as the ICBC experience in British Columbia.
Fast forward to August, 2010: The same insurance industry that pleaded poverty and convinced our government to forever change the insurance system in Ontario, now has major players bidding against each other to acquire insurance companies with a strong presence in Ontario in the areas of home and automobile insurance.
It was reported in the August 14, 2010 edition of the National Post that Aviva PLC , one of Britain’s biggest insurance companies, and the parent of Aviva Canada, had turned down an offer of $8.1 billion from RSA Insurance Group PLC, another one of Britain’s biggest insurance companies, and the parent of Royal and Sun Alliance Canada. RSA is reported to have written premiums in the first half of 2010 in the amount of $917 million, up from $849 million in the same period last year. Private insurance companies lost $1.2 billion in Ontario’s auto section since 2008, according to the Insurance Bureau of Canada.
It is obvious that the insurance industry despite its plea for mercy two decades ago has not been particularly honest and forthright with the citizens of Ontario about its financial state.
In fact, if we go all the way back to February 14, 1989 the official records of the Legislative Assembly of Ontario record, in response to the government’s very specific plan to lower insurance rates, that the insurance industry was making it clear in 1989 that they were looking at premium rate increases of about 17% . There was heated debate over the issue of how a mandate to change the insurance system in order to lower rates in 1987 could turn into a request for such a large increase in premiums in 1989. Notwithstanding, the Ontario Motorists Protection Plan came into force in Ontario in 1990.
Again and again, every few years, the law changes, more in favour of the insurer then the insured.
Now, effective September 1, 2010 we have many changes to the Ontario Automobile Insurance legislation. The changes have already been widely published (check out our blog to find out how these changes could impact you). However, the theme is constant, the negative changes far outweigh the positive changes by 10 – 3. First there was No Fault insurance, then there was a $10,000 deductible, followed by a $15,000 deductible, followed more recently by a $30,000 deductible.
Now, simultaneously, we find out that the largest of all the insurance companies have billions of dollars at their disposal to make offers to purchase other insurance companies, to grow their own business. How can this happen in an industry that has been lobbying for concessions for almost two and half decades with an argument that they are losing money?
It now becomes more than ever, the mandate of Neinstein & Associates, our team of hardworking lawyers and dedicated accident benefits clerks to play hardball with the insurance industry for as long and as hard as it takes to obtain the maximum benefits for our clients.
To see how the latest changes may affect you, click here to view the revised accident benefits schedule.
Harv Lewin is a Lawyer at Neinstein & Associates
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