16 insurance companies fined more than $ 1.5 million for overloading Alberta motorists

The Alberta Superintendent of Insurance has issued more than $ 1.5 million in fines against 16 auto insurance companies for charging motorists for excessive coverage, but what hasn’t been revealed is how much extra money the drivers have had to pay.

The Insurance Bureau of Canada and many of the penalized companies say the money has already been refunded to the drivers.

The TD Bank group, which includes Primmum Insurance, Security National Insurance Company and TD Home and Auto Insurance, received a $ 885,000 fine, the highest of all the companies that were penalized.

TD Bank Group released a statement to CBC News stating that the overloads were the result of a system failure that affected some customers’ policies. The company says the mistake was disclosed to the insurance superintendent and “all current and past customers affected” were repaid with interest.

“We regret the inconvenience this may have caused to some of our clients and we have taken all steps to correct our system to ensure clients have the right coverage that suits their specific needs and circumstances,” the release said.

Intact Insurance was fined $ 165,000 during the four-year period, the second highest among penalized companies. Economical Insurance and its subsidiary Sonnet Insurance were fined the same amount. The company said the error was the result of a glitch and that anyone who was overloaded received a refund.

“This is due to a technical error, which up to early 2019 impacted a small number of our customers for both overcharges and undercharges on their premium,” said Paul MacDonald, Executive Vice President of Economical Insurance. .

“As soon as we became aware of the error, we fully refunded any excess amounts to customers, self-reported the situation to the superintendent of insurance in Alberta, and improved testing to prevent this type of error from happening again. “MacDonald said.

Intact Insurance also provided a statement to CBC News.

“From time to time, during our rigorous audit processes, we discover errors that unintentionally result in a higher or lower insurance rate than presented to our various regulators.”

“We take these issues very seriously and, once discovered, work to resolve them. This includes reporting discrepancies to regulators where necessary and providing our clients with a refund of any excess amounts plus interest.”

The insurance superintendent’s office, which falls under the provincial Treasury and Finance Department, has issued a total of 29 penalties against those 16 companies. The actual violation under the Insurance Act reads, in part, “the charging of insurance premiums for private motor vehicles in excess of the approved rates”.

“The Alberta government is serious about protecting the Albertans and continues to maintain a regulatory environment that supports the fair treatment of consumers and the integrity of the industry,” reads a statement to the Treasury Board and Finance CBC.

Money refunded

A spokesperson for the Insurance Bureau of Canada says any driver who was overcharged was reimbursed.

“If they were overloaded, they would have gotten that money back,” said Celyeste Power, office vice president for Western Canada.

What is not clear is how overloaded motorists have been.

“In some cases, it might be as little as a couple of dollars. In other cases, it might be different.”

“They should all rectify,” Power said.

“Because this is what the insurance superintendent has to do, is to make sure these anomalies are corrected and that consumers are protected,” he said.

The Treasury and Finance Department added:

“In these cases, where a surcharge occurs, it is always reimbursed to the Albertani with interest”.

Trust issue

One group that is often critical of the insurance industry says the number of charges and the amount of fines against insurance companies will further tarnish the industry’s reputation.

“It tells us that there is a troubling pattern of behavior occurring in the insurance market. Mostly in the automotive industry,” said Keith McLaughlin, a spokesperson for FAIR Alberta, a group that was formed to combat a cap on claims. for minor damage resulting from motor vehicle collisions.

McLaughlin says Albertans should receive more information on how overloaded drivers have been to determine if the fines against the industry were enough.

“Do they work as a deterrent? Or are these fines just a slap on the wrist?”

The Insurance Bureau of Canada suggests that the amount of fines should not be used to speculate on the amount that drivers have been overcharged.

“I suspect those numbers are not the same. Fines are set based on which part of the deed was not followed, and not based on how much over or under was charged or what rule was involved,” Power said.

The Alberta government has launched a review of auto insurance in the province, saying it wants to ensure that the industry can remain profitable and that drivers can get cheap coverage.

A government spokesperson says the advisory board has completed its work and a report has been delivered to the finance minister. It should be made public “soon”.

Bryan Labby is a corporate reporter with CBC Calgary. If you have an idea or suggestion for a good story, you can reach him at bryan.labby@cbc.ca or on Twitter at @CBCBryan.

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