The relationship of insurance and politics

0 March 17, 2014 at 9:35 am by

It is unfortunate that insurance is continually being influenced by politics. It is frequently used by a party to gain votes prior to an election or simply to stay in power. Currently the Liberal Party (Liberals) in Ontario needs the support of the New Democratic Party (NDP) to stay in power since it is in a minority position. Last year the Liberals would have been defeated had they not backed the NDP on a plan to require auto insurers to reduce rates by 15% within a year. So far this has not happened since it is not practical and the changes that the Liberals recently made to accident benefits will not be sufficient to support a reduction of that size.

One concern that I have is that the NDP party seems to presently have the upper hand since the Liberals need their support. Even if there was an election called the same situation may continue if the Liberals or the PC party end up in a minority position. When you look at the auto insurance market in the western provinces, BC, Saskatchewan and Manitoba all have government controlled auto insurance plans and private insurers were eliminated in those provinces. In each case it was the platform of socialist parties and the insurance industry lost a large portion of their business in Canada. A very good reason why many large insurers in the United States stay away or leave Canada.

This leads to my current concern about socialist movements in Ontario. Ontario is the business heart of Canada and it was built by private enterprise individuals and corporations. Toronto is the largest city in Canada. The election for the Mayor is this year. Now Olivia Chow has entered the race. She has been very active in the NDP party and just resigned her seat as a Member of Parliament in Ottawa to try to become the next Mayor of Toronto. How will Ontario fair with two high profile people with socialist backgrounds in key positions? How will private auto insurers cope with these changes? I will comment again on this topic in the future. Your comments to this BLOG would be appreciated.



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