Region's Lawyers React to Insurance Industry Record Profits

February 22, 2005
Press Release from APTLA President, Bob Creamer

Region's Lawyers React to Insurance Industry Record Profits

SAINT JOHN - Plaintiff lawyers throughout Atlantic Canada are reacting with outrage to last week's announcement by the Insurance Bureau of Canada that the nation's home and auto insurance industry made a record 4.2 billion dollars in profit in 2004.

Robert Creamer, President of the Atlantic Provinces Trial Lawyers Association, says about the announcement: "The Insurance Bureau of Canada can spin it anyway they want but the fact of the matter is: $4.2 billion in profits for the insurance industry is a staggering amount of money; premiums for consumers are higher than they have ever been; and car accident victims' rights have all but been expunged due to the arbitrary capping of injury damages."

The Insurance Bureau of Canada is the lobby group for the insurance industry. Its members provide 90% of the private insurance sold in Canada. In 2002 the IBC began pressuring the governments of the various Atlantic Provinces to limit the ability of automobile accident victims to recover compensation for their injuries.

Mr. Creamer comments on this public relations campaign by the IBC, saying "Consumer advocate groups saw this coming a mile off. There is no question consumers were taken advantage of by the IBC. Governments in Atlantic Canada have been hood winked by scare tactics driven down their throats by the hugely profitable Insurance Companies. Consumers feel that there has been a breach of public trust by both the Insurance Industry and the Provinces of New Brunswick, Nova Scotia, and Prince Edward Island."

The Province of New Brunswick was the first government in the region to respond to the IBC's lobbying, capping personal injury damage awards at $2,500.00 for innocent accident victims in July, 2003. Nova Scotia and Prince Edward Island followed suit in the following months. Mr. Creamer calls these governments' actions "a senseless exercise". He explains "There was no time for the caps to even take effect before the IBC was already announcing record profits." Mr. Creamer is referring to the fact that, shortly after New Brunswick introduced its caps on damage awards in July, 2003, the insurance industry announced that it had made more than $1 billion dollar profit for the first 6 months of 2003.

Mr. Creamer feels that the Government's handling of this issue has been alarming. He states "Where is the leadership? Our politicians have failed miserably with this Insurance debacle. The respective governments of the Atlantic Provinces, naively, without thorough research, responded to the Insurance Industry Crying Wolf". The IBC's massive public relations campaign was launched for the sole purpose of jacking up insurance premiums for consumers, blaming the needed increase in premiums on exorbitant personal injury claims. The governments of Atlantic Canada fell for it.

Mr. Creamer fears one thing is clear, we can no longer count on Government to protect the rights of individual consumers when it comes to insurance issues. The Government is no match for the Insurance Industry. Consumer groups tried to influence the Government to not capitulate to the so called woes of the insurance industry. The provinces did not listen to their constituents. The result speaks for itself.

Mr. Creamer elaborated on the result of the IBC campaign, stating ?we have seen not one shred of evidence that the current record profits are driven by the arbitrary caps on damages. The premiums drove the profits. Consumers have paid dearly. Consumers gave up their legal rights and, at the same time, are paying record high premiums.? This continues to be a hefty cost for consumers and injury victims to pay to help the ?poor? insurance industry.

Mr. Creamer says that plaintiff lawyers are concerned for the consumers and accident victims, claiming ?consumers are battered; they cannot afford premiums, are driving without insurance, are paying for the cost of their own repairs, are not reporting accidents and will not take advantage of Section B (no fault) as they are afraid of driving up insurance premiums even further. When they are injured, they are deprived of fair compensation for those injuries.

As President of APTLA, he believes that there is a consensus among the Association's membership that the whole process has been a waste. He states ?there is not even a remote possibility the premiums will even come close to what they were before the IBC's Public Relations Campaign in 2002-2003.

In response to IBC?s claim that consumers will save $1.4-billion this year as the stronger financial results allow companies to lower premiums, Mr. Creamer says "It does not matter what IBC says about it, the rates will simply not come back to those pre-2002 levels."

Consumers may be battered but they are not yet beaten. APTLA feels that it and its members can do something about the erosion of legal rights. Mr. Creamer our membership is focusing on preserving innocent victims? rights to tort recovery. Lawyers are challenging the Insurance Industry by suing for innocent victims and ensuring that the Industry pays the benefits that people are entitled to.? Mr. Creamer is emphatic, APTLA is not intimidated by the Insurance Industry.

Currently, in Nova Scotia, APTLA is helping a consumer group by providing pro bono legal counsel and litigation support to challenge the arbitrary caps on damage awards. The law is being attacked on Constitutional and Charter grounds. A notice of intended action has been filed against the Attorney General for the Province of Nova Scotia.

Mr. Creamer is proud of the challenge in Nova Scotia, stating that it shows what plaintiff lawyers are truly made of.  If the Government will not stand up for the rights of its constituents ? we will, and in fact we are. Enough is Enough.

Robert M. Creamer, President
Atlantic Provinces Trial Lawyers Association