Feb. 06, 2004

Opposition Leader Darrell Dexter is challenging the John Hamm government's decision to quietly allow insurance companies to increase auto insurance rates that had been frozen, so that drivers insured by those companies will not receive the legislated 20% auto insurance rate rollback.

"This is a betrayal of the public trust," says Dexter. "The Conservatives said that Nova Scotians' would have their rates rolled back by 20% from the level at which rates were frozen. Now, the Conservatives have made sure that this just isn't going to happen for many drivers."

"The increases were authorized six days before Christmas by an Order in Council. There was no news release and no notice to the public on the government's auto insurance web site. The government did not send any explanation to drivers, but they did notify insurance companies who can now increase the rates that had been frozen last May.

"There are going to be some very disappointed Nova Scotians who expected a freeze or reduction in rates, and who will instead see rate increases."

The late December Cabinet order allows insurance companies to charge rates they had filed before May 1st, although rates had been frozen by Bill 45. Auto insurance rates, and rollbacks, will be calculated "in accordance with subsection 154(1) of the Act as it was in effect on May 1, 2003", rather than on the basis of the rate freeze that was applied days later.

Increases ranging from 6.3% to 35.27% were permitted by the regulation, according to the government's own list of increases that had been halted by the auto insurance rate freeze.

"This isn't a 'clarification' of the law," says Dexter. "This is deliberate deception."

Dexter points to the AVIVA insurance company. On May 1 the company's proposal for a 6.3% increase was blocked by the Hamm government's rate freeze on May 1. The December 19 O.I.C now enables this increase to go ahead. That retroactive rate increase is now hitting drivers, whose promised 20% rollback will actually amount to 13.2%.

"This government is clearly on the side of insurers, not drivers. Drivers have permanently lost their rights to benefits with the Hamm government's insurance legislation," says Dexter. "But only a month after the Bill was passed this government quietly returned the right to increase rates to the industry."