Following the announcement of the Good Driver rate cap in November 2023, Albertans were expecting the rate relief to apply effective January 1, 2024. However, in accordance with the Ministerial Order, the rate relief only applied once the AIRB approved the changes to the insurer’s rating program and the insurer implemented them, leading to situations where a good driver would see an increase over the announced inflation cap from January 1 until their insurer implemented the Good Driver rate cap.
Given the Good Driver rate cap implementation time, the AIRB issued a Bulletin to all insurers setting forward expectations on communication with policyholders:
“As policyholders will be concerned if their premium increases above the threshold set by government, it is incumbent upon insurers to explain why a premium for a good driver is increasing above the announced 3.7%… In the event a renewal notice has gone out to a policyholder for a 2024 renewal, the AIRB expects follow-up communication be sent to the policyholder providing a detailed explanation of the premium increase.”
The AIRB requested from insurers a sample of the letter sent to policyholders who fit the Good Driver criteria but experienced an increase over the permitted 3.7%
The Communicating the Good Driver Rate Cap report reviews the policyholder letters and makes a recommendation for the AIRB to provide more explicit direction and wording for insurers in the future.
Click here to read the full report.