Alberta’s Superintendent of Insurance has distributed substantial fines against 16 auto insurance companies for overcharging their customers during the time period between 2016 and 2019.
It is the Superintendent of Insurance’s responsibility to monitor, investigate and take appropriate action if there is any non-compliance by insurance companies with the Insurance Act and Regulations.
Those insurers recently subjected to fines in Alberta are blaming programming errors for charging their clients higher rates than those approved by the Automobile Insurance Rate Board.
PENALTIES FOR OVERCHARGING PREMIUMS
According to the Superintendent of Insurance, since 2016 there have been 30 penalties delivered to insurers for overcharging premiums, which have totalled $1.547 million. An additional 11 penalties have been issued in the amount of $1.16 million for other infractions since 2016.
The TD Bank Group, which includes Primmum Insurance, Security National Insurance Company and TD Home & Auto Insurance, received the largest penalty of $885,000 in fines.
According to the TD Bank Group, the overcharges to their customers was a result of a system error that affected their customers’ policies. TD Bank Group maintains that all customers impacted have been reimbursed with interest.
The second largest fine was directed at Intact Insurance for $165,000. Intact Insurance reported that the overcharges have been refunded and typically if erroneous charges are made they report them to regulators and work to fix the errors.
Economical Insurance and its affiliate, Sonnet Insurance, were also fined $165,000. Economical Insurance has responded the financial reprimand by stating that the overcharges were the result of a technical error that caused a small number of customers being overcharged, and that some customers were even undercharged. Economical maintains that its customers have been refunded for the overcharges and the company has improved testing in an effort to avoid the error in the future.
Alberta’s Ministry of Treasury Board and Finance issued the following statement:
Alberta’s government is serious about protecting Albertans and continues to maintain a regulatory environment that supports the fair treatment of consumers and integrity of the industry.
Keith McLaughlin, a spokesperson for FAIR Alberta, responded to the latest penalties against auto insurance companies in Alberta and stated:
It tells us that there’s a concerning pattern of behaviour happening in the insurance market, primarily in auto. … Are they functioning as a deterrent? Or are these fines just a slap on the wrist?
ALBERTA AUTO INSURANCE REFORM REVIEW RESULTS PENDING
Motorists in Alberta are amongst those experiencing the highest average premium rates for auto insurance in Canada, with an average premium of $1,316.00. Alberta is third highest on the list of auto insurance premiums across Canada behind B.C. and Ontario.
In February, the Alberta Superintendent of Insurance began its review of the auto insurance in Alberta in an effort to make it more affordable. One of the options being considered is the possibility of a no-fault insurance regime.
A three person committee made up of insurance, legal and medical experts sought feedback from other experts, consumers and industry stakeholders to consider reform options. A final report was to be delivered to the president of the Canadian Treasury Board and the Minister of Finance in June. The results of this report have not yet been made public.
The Automobile Insurance Rate Board recently published its annual survey. The results are in and according to the survey respondents only 23% agree with the statement that ‘automobile insurance premiums are fair and reasonable’. This is a significant decline compared to the 60% of respondents in 2017 who agreed with the same statement.
In an unrelated poll of Albertans by the provincial coalition Fair Alberta Injury Regulations (“FAIR”) in June, it was revealed that Albertans are three times more likely to prefer an at-fault insurance system (61% support) in comparison to a no-fault insurance system (20% support).
The legal team at Cuming & Gillespie LLP strongly support the efforts of FAIR and are dedicated to holding auto insurance companies accountable and demand that their clients and all Albertans injured in an auto accident receive the compensation that they deserve and appropriate treatment options.
For more information regarding FAIR and its efforts, please visit their website at fairalbertainjuryregulations.ca.
FAIR is eager to hear your opinion regarding the potential introduction of no-fault auto insurance in Alberta and is in the process of collecting personal stories. To read personal stories from fellow injured Albertans, please visit FAIR’s website.
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