I just don’t understand the CBC. I know a lot of the folks over there. I even do a commentary once in a while on CBC Moncton.
But their assault on auto insurance is just plain puzzling. They are running more stories on auto insurance than Al Hogan wrote on toll highways.
And why? Some have suggested it’s because Robert Jones is a left wing nut fanatic. I never met the man.
This must be a boon for the provincial Liberals but it makes no sense.
So for Robert Jones and company, here’s a little primer on insurance.
1. Why do we get insurance to begin with (forgetting for a moment that it’s required by law)?
We get insurance to mitigate against a major expense down the road like losing your life (life insurance), a car accident, your house burning down, etc. From year to year, by definition, insurance premiums paid will never be equivalent to claims paid out. By definition and even a CBC reporter should understand that. The industry apparently lost money for 6-7 straight years in New Brunswick during the late 1990s and early 2000s and Robert Jones didn’t do one documentary. Go figure.
2. Insurance rates are regulated by the New Brunswick Insurance Board that pours over reams of data (including trends and taxes paid) and then approves or denies the insurance rates.
The New Brunswick Insurance Board chairman Paul D’Astous is actually a good guy. A colleague of mine had to deal with him once and found him to be very knowledgeable. What possible rationale could the NBIB use to allow insurance companies to keep artificially high insurance rates for an extended period of time? Name me one reason?
If there is an imbalance between claims paid out and premiums paid – over time this will work itself out through competition and regulation.
The Insurance Corporation of British Columbia announced major premium increases for this year and next and is complaining publicly about the escalating claims costs (sound familiar?).
I certainly am not an expert on insurance but it seems to me that the reforms put in place have worked.
The last thing we need in this province is another massive government bureaucracy with Robert Jones as its President.
PS – And what’s up with the CBC quoting a lawyer?
Halifax lawyer and insurance critic Barry Mason said it’s a case of insurance companies not passing benefits of government auto insurance reform on to drivers, as promised.
The least credible industry by far on the issue of auto insurance is the legal industry. By far. Lawyers made tens of millions in profit at the hands of New Brunswick residents by pushing thousands of auto insurance claims in the late 1990s and early 2000s. There were dozens of lawyers who became millionaires off the auto insurance industry. And not one documentary by Robert Jones. Go figure.