Minor Injury Claims has resulted in windfall for insurance companies

The New Brunswick branch of the Canadian Bar Association, today released a report analyzing the effects of regulation cap injuries established by the Government, Bernard Lord, in 2003 and confirmed by the current government Liberal.

The $ 2500 cap on minor injury has been put in place to stop the escalation of insurance premiums out of control in the early 2000s.

But part of the report obtained by the Telegraph-Journal before his release shows the cap insurance to contribute to the soaring industry profits well beyond industry standards.

The association says the profits are coming at the expense of the injured in New Brunswick who do not receive the compensation they deserve.

"According to the insurance industry and insurance in New Brunswick, a profit rate is about 10 percent," said Stéphane Viola Moncton lawyer who represents the Bar on the record .

"But they are giant steps on to the detriment of the wounded and seriously under-compensation of New Brunswick."

Numbers of the report show the insurance industry has accumulated $ 86 million profit in New Brunswick in the first year under the CAP - a 31.4 percent return on equity.

The industry made a combined profit of only $ 2 million in the last seven years, in the province without the cap.

In 2004, the profits of the industry in New Brunswick was $ 124 million, a 40.3 percent return on equity. Within two years, she again made profits of $ 106 million and $ 87 million.

The report was directed by Jason Strauss and Christopher Bruce Economica Ltd, using its own figures for the industry. It was commissioned for the Canadian Bar Association.

The organization has no legal insurance industry data for 2007 or 2008, as it has not yet been disclosed.

"Watch what happens to the economy of New Brunswick," said Viola.

"During the four years that we have data, we can estimate that if there had been only a reasonable return on equity of 10 percent instead of the unprecedented levels of profit, $ 274 million, would be remained in the economy of New Brunswick. "

Viola said that the money could be spent on health care to help workers injured at home, or pumped into the private health care services such as physiotherapy and chiropractic work.

The renovation of houses and apartments to make them easy to use for the victims of New Brunswick would also see other companies, he said.

"All these services are required by people suffering from chronic pain," he said. "But now they will never be paid."

The Canadian Bar Association calls for the complete removal of the cap regulation injuries. He said personal injury claims are not the cause of rising premiums.

The figures in today's report are intended to show that the average cost of premiums have been higher under the CAP against the last seven years without one. Comparatively, the average cost of a slight injury insurance claim was lower in the CAP.

The association estimates that the two sets of figures show that the cost of minor injuries is not relevant to the average cost of premiums.

Viola said he plans to focus now on how the New Brunswick, the definition of a minor is marred by personal injury.

He said that the vagueness of the wording has not only minor injuries, but the most catastrophic injury is defined as a "minor personal injury" under the law.

Ronald Godin, the consumer advocate for insurance, echoed that concern earlier this month in its 2008 report, saying many people have called his office in disbelief, they were told after heading of the so-called minor injuries includes debilitating problems such as broken bones.

Godin said he believes the intent of the legislation was to apply the ceiling of the so-called "soft tissue" injuries such as sprains neck.

According to the Insurance Bureau of Canada, the move to a ceiling of $ 2,500 in New Brunswick has triggered a drop in auto insurance premiums by almost 36 per cent. He said the New Brunswick are now among the lowest in the country.

Justice and Home Affairs Minister TJ Burke said that the province will not change the law on this point.

Burke said a constitutional challenge to the legislation of New Brunswick made its way through the courts. He said that the government will allow the courts to rule on the matter.

"Our number one priority now is the economy and we have the feeling of New Brunswick are in an excellent position with regard to the premiums for low auto insurance rates," he said. " We have worked hard to ensure that premiums remain low and we have affordable prices for New Brunswickers.

"It is a priority for our department."

Viola said the Canadian Bar Association will use the new report as a tool to convince the courts to remove the cap. He believes that the court hear the case within a year.

Bouchons insurance in Alberta and Nova Scotia have also been challenged.

Last year, the Alberta Court of Queen's Bench held that the insurance reforms in the province violated the Canadian Charter of Rights and Freedoms by the discrimination against victims of accidents with soft tissue injuries.

The Alberta government has since appealed.

Nova Scotia has also faced a ceiling of the constitutional challenge, but resisted a case in which victims have minor injuries claimed the regulations were discriminatory.

Viola Graham said the government must act, now he knows the truth about the influence of injury on the ceiling of injuries in New Brunswick.

"To finish with the regulation would be the moral and ethical thing to do now, knowing that these statistics," said Viola. "Claims are not here, then the question (the Government) adopted the legislation under false pretenses and now they have to do the right thing and delete it.

"We already had six years of injustice, New Brunswick."(source)