Government Delivers Lower Rates, More Protection for Consumers

Environment and Labour (to April 1/08)

June 25, 2003 12:33 PM

Nova Scotians can look forward to lower auto insurance rates and
more protection based on a government plan announced today, June
25, by Environment and Labour Minister Ron Russell.

The government's plan lowers auto insurance rates for consumers
by an average of 20 per cent. The plan also introduces better
protection and more options to the insurance system for

"After listening carefully to the issues faced by Nova Scotians,
we've developed a comprehensive plan that meets their needs,"
said Mr. Russell. "The result is a strong, effective plan that
addresses the heart of the problem and substantially reforms our
insurance system."

The government's plan reduces auto insurance premiums by an
average of 20 per cent. This is achieved by creating a basic
insurance package that insurance companies will be required to
offer consumers. This basic package limits excessive compensation
for minor injuries and claims of pain and suffering. Full
coverage for serious injuries will remain unaffected.

"Limiting claims in the case of minor injuries is an important
factor in containing costs in the long term," said Mr. Russell.
"Since insurance is a very personalized product, there will
certainly be different degrees of impact felt by consumers.
Information we collected indicates the average decrease will be
20 per cent. Some consumers could see decreases of 40 per cent,
depending on their circumstances. These are significant savings
for consumers."

"We expect to see immediate rate reductions in the applications
filed by insurance companies. If they are not forthcoming, other
options will be considered, including a publicly run system in
conjunction with the other Atlantic provinces," said Mr. Russell.

The creation of a basic insurance package is the first step in
the government's six-point plan to help reduces rates and improve
protection for consumers. The other five points are:
-- Consumers have the option to purchase additional, enhanced
accident benefits.
-- Consumers will be protected against future rate increases by a
new rate review mechanism. This will include the creation of the
Nova Scotia Insurance Review Board to oversee all insurance
issues, including auto insurance and property and casualty
insurance. The new board will conduct rate reviews, examine and
ensure fairness in insurance rules and monitor the system to
ensure reforms are working for consumers.
-- Consumers who are denied insurance coverage will now receive
clear reasons in writing from insurance companies. This is
addressed in the Automobile Insurance Underwriting Practices
regulations introduced today by government. The regulations also
prohibit companies from discriminating against a potential
customer based on factors such as age, gender, or previous
coverage in Facility Association -- the insurer of last resort
for high-risk cases.
-- Consumers will be protected from unfair discrimination,
especially those that unfairly place them in high-cost Facility
Association coverage. This will significantly reduce the number
of people who have to be covered by the high-cost Facility
Association and will provide further relief to those who have
been hardest hit and placed there unfairly in recent years.
-- Consumers will receive better information from insurance
companies and government on issues that impact their rates and
coverage. Specifically, government will introduce an educational
driver safety campaign.

All components of the government's plan complement the Council of
Atlantic Premiers' common regional approach to lowering
automobile insurance rates for Atlantic Canadian consumers.

The government plan includes a detailed work schedule for
regulatory and legislative change.

A copy of the plan "Reducing Rates: A Plan That Works" is
available on the Environment and Labour Web site at or by calling 902-424-6331.


     Nova Scotians can look forward to lower auto insurance rates

and more protection based on the government's plan announced

today (June 25th) by Environment and Labour Minister Ron Russell.

     The government's plan lowers auto insurance rates by about

20 per cent. The cost savings will come from a basic insurance

package that limits compensation for minor injuries and pain and

suffering claims.

     The plan also includes changes to legislation and the

introduction of new regulations that enhance accident benefits,

prohibit discrimination and set out rate reviews.


Contact: Valerie Bellefontaine
         Environment and Labour

         Penny McCormick
         Environment and Labour

kjd         June 25, 2003      12:31 P.M.