Nova Scotia NDP still reviewing options around insurance cap on awards

The Canadian Press ~ The News
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HALIFAX - The Nova Scotia NDP appears to have taken a detour from its former position on the $2,500 cap on pain and suffering awards for minor injuries resulting from vehicle collisions.
In May, before he became premier, Darrell Dexter said he planned to scrap the cap and create a deductible to weed out frivolous claims.
"If you don't have a claim that's worth more than $10,000 or $15,000, you are not going to pursue it," he said during a campaign stop.
"So it accomplishes what the (insurance) industry always said it wanted to accomplish, but it does it without excluding those people who really have quite serious injuries."
But now the NDP is in government and Graham Steele, the minister responsible for the Insurance Act, took issue Wednesday with whether the party's position was to get rid of the cap.
He said Monday that the cap will be reviewed and a fairer system brought before the legislature in the spring.
"I know that during the campaign Darrell had suggested a deductible as an alternative," Steele said Wednesday. "He certainly didn't mean then that that was a solution that we've already worked out, and that's what the answer's going to be."
Dexter is in Denmark this week representing the province at the UN climate change conference in Copenhagen. His press secretary, Jennifer Stewart, said he could speak to the issue Thursday during a conference call with reporters.
Nova Scotia Supreme Court and the Nova Scotia Court of Appeal have both found the cap to be lawful. The Appeal Court released its ruling this week.
John Hamm's Conservative government put the cap in place in 2003 as part of its strategy to curtail skyrocketing auto insurance rates. Insurers had complained that claims costs were responsible for driving up premiums, so the government established the cap and compensated consumers by rolling back rates 20 per cent.
Critics said the province's definition of minor injuries was too broad.
Steele said changing that definition is an option, as is raising the cap from $2,500. He said the key thing is to balance fairness and affordability.
That's a delicate matter, said Bill Adams, Atlantic region vice-president of the Insurance Bureau of Canada.
"The cap brought premiums down 27 per cent and brought stability," he said. "When you start tinkering with that, you run the risk of causing some instability and causing some increased costs that could result in increased premiums."
Liberal and Tory insurance critics say the NDP government should leave the cap alone.
Liberal Michel Samson said his caucus isn't hearing from people demanding that the system be changed.
"Any tinkering that you do in the insurance industry has a trickle-down effect, and that effect tends to be higher insurance rates," Samson said.
Tory Allan MacMaster said lower premiums mean the system is working.
"If Premier Dexter decides to change the legislation to allow higher claims for people with (minor) injuries, ultimately it's going to mean higher insurance premiums and I don't think Nova Scotians want that," he said.
As for the Appeal Court ruling, Adams said it was good news for drivers. He said if the cap had been struck down, it's possible it would have meant a flood of claims from the past several years, leading to settlements adding up to millions and resulting in higher premiums for drivers.
A similar insurance cap in Alberta, where the amount was $4,000, was overturned by a lower court in February 2008 but the province later won an appeal. The challenger asked the Supreme Court of Canada to hear the case and Adams said the court is to make a decision Thursday.

Organizations: NDP, Nova Scotia Supreme Court, UN Insurance Bureau of Canada Supreme Court of Canada

Geographic location: HALIFAX, Denmark, Copenhagen Atlantic Alberta

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