Canada’s largest insurer announced late Tuesday that its brands Intact Insurance and belairdirect will no longer offer optional auto coverage in British Columbia.
“This decision was taken after careful consideration, given the upcoming regulatory changes in the province that will reduce competition and limit choices for consumers,” Intact Financial Corporation said in a press release.
Louis Gagnon, president of Intact Financial Corporation’s Canadian operations, said the insurer believes consumers should have choice and flexibility when it comes to their insurance. “We have been closely assessing the optional automobile insurance market in British Columbia for some time and made the decision to shift focus to our other lines of business and providing enhanced services to consumers.”
Intact says it wants to maintain a strong presence in BC, and will continue to provide personal property, commercial P&C, surety and specialty insurance to individuals and businesses through its brands. Intact Insurance and belairdirect will stop writing new optional auto business Dec. 1 and renewals Jan. 1, 2021.
Intact’s comments about upcoming regulatory changes and optional auto allude to Bill 11, Attorney General Statutes (Vehicle Insurance) Amendment Act, which passed third reading July 15. Earlier that month, the Insurance Bureau of Canada (IBC) published an open letter to B.C. Premier John Horgan, outlining concerns that the bill may “stifle the limited competition that currently exists in BC’s optional auto insurance market.”
Specifically, IBC notes the proposal to create a new mandatory Basic Vehicle Damage coverage, which would only be available through the Insurance Corporation of British Columbia (ICBC).
“This product will provide coverage for vehicle replacement and repair when a driver is not responsible for an accident,” an IBC letter notes. “Today, these repairs can be covered by the third-party liability insurance of the driver responsible for an accident, which is open to choice and competition above ICBC’s basic limits.”
The provincial government, which oversees ICBC, denies that the optional auto market would shrink as a result of the new Basic Vehicle Damage coverage. At the time IBC made its letter public, B.C. Attorney General David Eby said “there will be changes on the optional side without question, including new products that optional insurers will be able to provide British Columbians.” He suggested that private insurers would be able to compete for “products that don’t exist right now, including a wage top-up product,” but didn’t elaborate.