Bill 47 in Alberta, the province’s Automobile Insurance Act, was given Royal Assent in the Alberta legislature on May 15.
The “care-first” model is being described as the most ambitious transformation of the auto insurance system in provincial history by the Insurance Bureau of Canada (IBC). The Act, however, is enabling legislation, meaning rules and regulations still need to be developed in time for the privately-delivered, care-first system to begin on Jan. 1, 2027.
“The government must now move urgently to finalize regulatory details of the new model to have it in place by January 2027. For the system to be successful and deliver savings to Alberta drivers, the government will need to strike a balance between the benefits provided to those injured in collisions and the amount of litigation that remains in the system,” says the IBC’s vice president, Aaron Sutherland.
The IBC says today insurers are paying out $1.17 in claims and expenses for every $1 earned in premiums in the province. “As Alberta designs its new auto insurance system, it must work to attract auto insurers back to the province by leaving rate-setting to insurers, cutting red tape and letting the competitive market create the conditions for lasting affordability.”
Alberta says further regulations to implement the changes outlined in the Act could be introduced in the fall of 2025.
Among the key changes, Alberta says the Act will establish when benefits will be payable and will direct insurers to pay compensation, regardless of who is at fault. The Act also sets out what insurers will need to pay or reimburse for medical rehabilitation and other benefits, establishes an income replacement benefit and a permanent impairment benefit and restricts, in most cases, the ability to sue an at-fault driver. “Exceptions to litigation will include if the at-fault driver is convicted of certain driving offenses,” they write, “or if losses exceed the amounts provided by the insurance policy, such as lost income.”
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