Calgary, AB: Records released by the Alberta government show that auto insurance companies in Alberta have been levied more than $1.5 million in fines for violating the Insurance Act by charging premiums at rates higher than approved by Alberta’s insurance regulator.
In an effort to protect consumers and enhance public confidence in insurance, the Superintendent of Insurance monitors, investigates and takes disciplinary action when there are violations of Alberta’s Insurance Act and regulations. Since 2016, the Superintendent of Insurance has fined insurance companies in Alberta 29 times for “charging private passenger automobile insurance premiums in excess of approved rates.”
Across the home, auto and property insurance industry in Alberta, companies have been fined an additional 20 times for unfair practices, failure to provide disability benefits, and other improper market behaviours. These fines totalled more than $1.7 million since 2016. In total, insurance companies have been fined 49 times since 2016 for various infractions of the Insurance Act and paid more than $3.2 million in fines.
“This is a record of seriously concerning behaviour in the insurance industry,” says Keith McLaughlin, spokesperson for FAIR Alberta. “49 violations of the Insurance Act resulting in millions in fines in just four years raise a lot of questions for consumers.”
“For one, we don’t know how much profit was made by the insurers for these offences and whether the fines levied as punishment are an appropriate level of deterrent,” said McLaughlin.
“The other big question comes down to trust. We know insurance industry lobbyists are asking the government for reforms that would reduce consumer protections and increase their profits further,” said Mclaughlin. “There’s a distaste for that generally amongst Alberta consumers and I think they’ll be even more turned off now that we’re hearing insurers aren’t playing by the rules.”
The Alberta government initiated a review of the auto insurance system in December 2019 but has yet to announce any reforms. FAIR Alberta has been advocating for reforms that prioritize consumer rights and transparency for insurance companies.
“At the end of the day, Albertans need affordable insurance, accountability for insurance companies, and consumer protections to ensure the system is fair and not biased against working Albertans,” said McLaughlin.
A breakdown of fines levied by the Alberta Superintendent of Insurance is provided below.
Summary of fines issues for violations of the Insurance Act 2016-2020
|Violation / Infraction||Number of fines issued||Total amount of fines|
|Overcharging on auto insurance premiums in excess of approved rates||29||$1,547,000|
|Unfair practices, failure to provide disability benefits, improper market behaviours, and other||20||$1,711,000|
About Fair Alberta
FAIR Alberta is a coalition of Albertans including concerned consumers, medical professionals, injured Albertans, and members of the legal community who are committed to protecting the rights of consumers and individuals that have been injured in motor vehicle accidents. FAIR works to ensure that the laws applying to injury victims are fair, that auto insurance companies are accountable to the premium paying public, and that individual Albertans receive fair compensation and appropriate treatment options for their injuries.
Spokesperson, FAIR Alberta