Regulation (June 01, 2009)

ALBERTA RATE BOARD SEEKS TO ADOPT FILE-AND-USE REGULATION

The Alberta Automobile Insurance Rate Board (AIRB), which regulates the province’s auto insurance rates, is seeking approval from the provincial government to introduce a new file-and-use system for determining auto insurance rates.

In a “pure” file-and-use system, insurers can file for changes in their auto insurance rates with the government and then use the filed rates pending formal government approval. Aspects of this kind of filing system exist in jurisdictions across Canada, although the move to such a file-and-use system would represent quite a change in Alberta’s private auto insurance market.

“If approved by government, working on the implementation of a new regulatory model [would] move Alberta away from an annual industry- wide rate adjustment process to a file and approve process, where the [AIRB would] review companies on an individual basis to determine if rate changes are appropriate and fair,” the AIRB says in its 2008 Annual Report. If accepted, the AIRB goes on to note, “this model will change the way premiums are regulated from an annual, ‘one-size- fits-all,’ industry-wide adjustment to an individual company application process.”