The Alberta prime minister accused his NDP opponents of wanting to introduce public car insurance on Tuesday, a move that Jason Kenny said would lead to a lack of “Soviet-style” choices, like other provinces.
“We, the people of Alberta, believe in the markets. We don’t believe in socialism,” Kenny said when asked about the high rates for Alberta drivers.
“Many other provinces have forced the government to take over the insurance market and this has not happened to consumers. And that means you have only one choice, a kind of Soviet style… I hear that’s where the NDP wants to take over the province. “
Kenny said premiums have risen in recent years, but are “now falling”.
His comments came as politicians and experts argued over what a new government report meant for drivers and insurance companies.
It was revealed last weekend that private insurance providers had increased their profits by more than $ 150 million from 2019 to 2020. Overall, the industry earned $ 1.3 billion last year, the report said.
Another analysis looks at insurance companies’ surpluses in both 2020 and 2021 and finds that profits continue to grow.
“In both years, that’s about $ 2 billion, $ 927 million in 2020 and $ 1.2 billion in 2021,” said Craig Allen, an independent consulting actuary.
“THE SITUATION IS JUST NOT SUSTAINABLE”
Opposition NDP has accused insurance companies of “fleeing Alberta drivers with the help of the UCP” after the government lifted their interest rate cap after the 2019 election.
“Insurance costs are out of control. “Alberta families have been punished for keeping their vehicles on the road so they can get to work or school,” tweeted leader Rachel Notley.
“If the minister had listened to the Alberts, he would have known that their car insurance had risen by 20 or 30 percent,” said NDP financial critic Shannon Phillips.
The official opposition is not calling for government insurance, as Kenny suggested, but they want to investigate why some rates are rising and set up a committee of all parties to study how to cut spending.
“What we need here are solutions and this committee can achieve it. The fact is that this situation is simply not sustainable,” Phillips said.
“COMPANIES ARE ALWAYS LOSING MONEY”
Kenny argues that the industry has no choice but to raise rates on some policies due to increased rewards in cases of bodily injury.
“The problem we had two or three years ago is that a lot of companies were actually losing money in the Alberta market and they were just withdrawing,” he said.
Kenny believes greater choice on the free market will set fair interest rates, and he has denied allegations that he lobbied for the abolition of interest rates.
“I don’t remember ever talking to a lobbyist about this,” he said.
Kenny argues that NDP policies make it almost impossible for some to obtain insurance, while others are forced to pay premiums in advance rather than monthly.
His finance minister insisted on Tuesday that drivers would start receiving lower bonuses after the government passed a bill.
“Seven insurance providers have asked for a reduction in interest rates for this coming year, so that’s a positive thing,” said Travis Tows.
Meanwhile, the Canadian Insurance Bureau (IBC) disputes that companies make higher profits.
“What we’ve seen in the last 12 months as the government reforms prices, people are paying about 1% less for their coverage,” said Aaron Sutherland of IBC.
According to the bureau, Alberta has the third highest rate of car insurance in Canada, after Ontario and British Columbia
With files from Chelan Skulski from CTV News Edmonton and Michael Franklin from CTV News Calgary
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