Tom Rakocevic, MPP for Humber River-Black Creek, slammed the Ford Conservatives for voting yesterday to let auto insurance companies keep gouging Ontario drivers.
The Conservatives voted down Rakocevic’s private member’s bill, Lower Automobile Insurance Rates Act, on second reading. The bill proposed to bring Ontario drivers relief from sky-high auto insurance rates by capping excessive profit margins of auto insurance companies and also improving transparency in the industry.
“Yesterday was a disappointing day for drivers in Ontario, who are desperate for relief from sky-high auto insurance rates,” said Rakocevic. “This government had an opportunity to stop auto insurance companies from gouging Ontario drivers.
“Instead, the Ford Conservatives voted down the Lower Automobile Insurance Rates Act, ensuring auto insurance companies can keep overcharging drivers in Ontario.”
Ontario drivers were gouged by as much as $5 billion over five years, according to a study released last year. Rakocevic’s bill was drafted in consultation with the study’s author, Dr. Fred Lazar of the Schulich School of Business. Not only would the bill have capped auto insurers’ profit margins, but it would have forced them to keep expenses that get passed on to drivers — like advertising and legal fees — in check.
“I have estimated in the past that just these two changes — reducing the after-tax return on equity of the auto insurance companies and their permissible operating costs — could reduce premiums in this province by $1 billion every year,” said Lazar.
Rakocevic’s bill also would have forced auto insurance companies to crack open their books and shed more light on this through enhanced annual reporting requirements.
“Drivers in Ontario deserve so much better than to be taken for an expensive ride by auto insurance companies,” said Rakocevic. “Andrea Horwath and the NDP will keep fighting to lower auto insurance rates and to end postal code discrimination.”
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