Dominion of Canada General Insurance Co. announced that it intends to stop offering new, personal auto policies in Newfoundland and Labrador in the wake of proposed insurance reform introduced by the Conservative government last week, which the company’s president, George Cooke, called punitive legislation.
“It is with great sadness and disappointment that today we have informed our staff and business partners that we will stop writing new personal automobile business in Newfoundland and Labrador,” he stated in a news release. “The government of Newfoundland and Labrador is telling us that, in order to continue doing business in that province, we must knowingly invest our shareholders’ capital at a certain substantial loss. This is simply unacceptable.”
The legislation in question, Bill 30, proposed by the provincial government, orders reductions in premiums of anywhere from nine to 37 per cent and contains non-withdrawal clauses for companies operating in the province.
Cooke told Canadian news media that he has tried without success to arrange talks with the provincial government to discuss alternatives, and had written the Province’s Premier urging that the bill be withdrawn and rewritten to consider the “specific circumstances of individual insurers.”
He noted that “reductions of this magnitude are not possible without substantive meaningful reform to reduce and control costs.” The rate relief proposed doesn’t include a parallel commitment to lower costs by capping damage awards and limiting assigned risks, along the lines of those recently adopted in neighboring New Brunswick.
Dominion said it would continue to satisfy commitments to current policyholders, employees and business partners.
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