While car insurers say the reason for high rates is so much fraud, Lazar has another phrase for it: he calls it “excessive profitability.” The Financial Services Commission of Ontario — the regulator — is clearly not holding Ontario’s car insurers to account. What’s the point of a regulator that does not regulate? It’s superfluous. A fifth wheel.
In 2013, Kathleen Wynne’s Liberals promised to deliver Ontarians a 15-per-cent reduction in car insurance premiums. Wynne later said that it was a “stretch goal” — and instead of the promised reduction, we have had about a 2.5-per-cent premium increase. The Insurance Bureau says auto premiums in Ontario are now 45-per-cent higher than Alberta’s and about twice as high as those in the Maritimes.
Lazar estimates that cumulative premium overpayments might have been as high as $9.2 billion since 2001 or approximately 6.5 per cent of premiums, based on assumptions of lower operating costs and a more reasonable profitability benchmark. In the last five years alone, overpayments might have totaled $5 billion — 9.5 per cent of the total premiums paid during this past five years. This translates to an additional $143 per year for each policyholder.