Competition Bureau responds to complaints over insurance premiums

OTTAWA, August 27, 2004 – The Competition Bureau announced today that it has completed its review of complaints regarding insurance premiums in Canada and has found no evidence that any insurance company or group of companies engaged in conduct that violated the Competition Act.

In March 2004, six Members of Parliament complained about increases in car, property and commercial insurance premiums in Canada. They alleged that the insurance industry was abusing its dominant position and not providing Canadians with reasonable and competitive rates. The Bureau also received complaints from several members of the public.

The Bureau examined the allegation using the tests provided in the Competition Act under the abuse of dominance provisions.

Since provinces regulate car and property insurance, the Bureau concluded that each province should be examined separately. In reviewing the complaints, the Bureau obtained and analysed data to determine the shares of insurers in each province. It also contacted participants in the insurance industry.

Car Insurance
In four provinces – British Columbia, Saskatchewan, Manitoba and Quebec – an insurer owned by the provincial government sells all compulsory and, in some cases, most non-compulsory car insurance. In other provinces, many insurance companies compete with each other and none of them are big enough to exert market dominance either individually or jointly. All provinces regulate the prices of compulsory car insurance through either government-owned monopolies or the approval of rates to ensure that they are neither excessive nor insufficient.

Property Insurance
In each province, many insurance companies compete with each other and none of them are big enough to exert market dominance either individually or jointly.

On the basis of obtained information, the Bureau did not identify any company or group of companies that dominated the supply of car and property insurance in any province or that engaged in anti-competitive acts.

While the Bureau realizes Canadians are concerned about rising insurance premiums, price changes in any industry can be the result of a variety of factors, such as increased costs to provide the product, and do not necessarily constitute anti-competitive behaviour.

The Competition Bureau is an independent law enforcement agency that promotes and maintains fair competition so that all Canadians can benefit from competitive prices, product choice and quality service. It oversees the application of the Competition Act, the Consumer Packaging and Labelling Act, the Textile Labelling Act and the Precious Metals Marking Act.

For media enquiries, please contact:
Purvi Radia
Communications Advisor
Communications Branch
(819) 953-8679

For general enquiries, please contact:
Information Centre
Competition Bureau
(819) 997-4282
1-800-348-5358