Lobby group doing its job 0 The Insurance Bureau of Canada is an association representing private companies, not you




Readers of this column might reasonably wonder if my keyboard is attached to the Insurance Bureau of Canada’s keyboard.

It seems every time I write a column on the insurance industry, a follow-up letter-to-the-editor or column appears from the desk of the IBC.

I sometimes feel like Butch Cassidy when he asked the Sundance Kid about the posse tracking them, “They’re beginning to get on my nerves. Who are those guys?” So, who are those guys?

The name, Insurance Bureau of Canada, may sound as if the IBC is part of or affiliated with the government or some Crown agency, but that’s not the case.

The IBC is a creation of Canada’s private insurance companies. It’s an association that represents them. Basically, the IBC is a lobby group.

As lobbyists, they encourage governments to change laws to benefit their members and they donate money to politicians and political parties.

They gave $25,000 to the leadership campaign of Kathleen Wynne.

Last year, they gave the Ontario Liberal Party $30,250.

As lobbyists, they have an enviable record of furthering the agenda of insurance companies, having pushed the Ontario government to cut accident benefits in 2010.

They continue to push for “reform” which would reduce the number of accident victims who qualify for the highest level of accident benefits.

The IBC has been successful in framing the discussion of car insurance premiums by continuously focusing on the subject of insurance fraud.

Why are auto insurance premiums so high and why do Ontario drivers pay the highest premiums in Canada?

According to the IBC, it’s largely due to insurance fraud.

Never mind that the numbers it trots out for insurance fraud have barely budged in 20 years and are based on data provided by the insurance industry.

Now, the IBC appears to be shifting its approach by mounting an advertising campaign which seems to blame Ontario’s insurance regulator for the high premiums we face.

On January 16, IBC full-page ads in Toronto dailies, including the Toronto Sun, asked the question, “Ever wondered who decides what you pay for auto insurance?” The ads answer the question with “Ontario’s government-appointed regulator sets those rates.” The message seems to be don’t blame the insurance companies for the high premiums, blame the government regulator.

That’s a nice bit of spinning.

But here’s what the regulator, the Financial Services Commission of Ontario, says about the setting of premiums:

“Insurers must submit proposed changes to their rates to FSCO for approval along with supporting actuarial data. FSCO and its actuaries review this data and insurers’ assumptions regarding claims costs, expenses and investment income to ensure that, as required by law, the proposed rates are: just and reasonable, not excessive, and not going to impair a company’s long-term financial solvency. As a result of FSCO’s review, an insurance company may be required to amend its proposed rates before the rates are approved.”

FSCO also makes it clear it has no say in individual premiums; it only approves an insurance company’s average rate.

Each insurance company sets its own policies on how individual premiums are affected by factors such as the owners’/drivers’ history, the type and age of the car, the usage of the car, where the owner lives and other factors.

Market conditions are also factored into the mix. That’s why different insurance companies will quote and charge remarkably different premiums for the same owner and car.

While the IBC posts some educational information material on its site, it doesn’t hesitate to criticize accident victims as it does in a YouTube video, portraying them as snakes, with the narrator complaining about therapy going on and on after reasonable treatment goals have been met.

So the next time you see an IBC letter to the editor, column, ad or video, remember the IBC is a lobby group doing what it can to further the agenda of its members.

That’s its job. And it does it very well. 

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