Bill 71 2012

An Act to amend the Insurance Act to provide for lower insurance rates for new drivers

Note:  This Act amends the Insurance Act.  For the legislative history of the Act, see the Table of Consolidated Public Statutes – Detailed Legislative History at www.e-Laws.gov.on.ca.

Her Majesty, by and with the advice and consent of the Legislative Assembly of the Province of Ontario, enacts as follows:

   1.  Subsection 121 (1) of the Insurance Act is amended by adding the following paragraph:

36.3 prescribing circumstances for the purposes of subsection 417.0.2 (5);

   2.  The Act is amended by adding the following section:

Risk classification systems, new drivers

   417.0.2  (1)  No insurer shall use a risk classification system in determining rates for each coverage and category of automobile insurance unless the system provides for lower rates for new drivers in accordance with this section and the regulations.

Credited driving experience

   (2)  Subject to subsections (4) and (5), in fixing rates for new drivers under a risk classification system, an insurer shall credit new drivers with additional years of driving experience.

Same

   (3)  For the purposes of subsection (2), the total number of years with which a new driver shall be credited shall be at least,

  (a)  six years, if the driver,

           (i)  has completed a Ministry-approved driver education course at a driving school that is licensed under the Highway Traffic Act, or

          (ii)  has completed a driver education course at a licensed driving school in North America that is substantially similar to a Ministry-approved driver education course; and

  (b)  three years in all other cases.

Disqualifications

   (4)  A new driver is disqualified from receiving credit for additional years of driving experience under subsection (2),

  (a)  if he or she has been found to be more than 25 per cent at fault in a claim arising out of a motor vehicle accident;

  (b)  if, subject to clause (6) (a), his or her licence has been suspended for non-payment of a fine for an offence relating to the use or operation of a motor vehicle; or

   (c)  if, subject to clause (6) (b), he or she has been convicted of,

           (i)  a provincial offence in relation to the use or operation of a motor vehicle,

          (ii)  an offence under the Criminal Code (Canada) in relation to the use or operation of a motor vehicle, or

         (iii)  an offence under the laws of another jurisdiction in North America that is substantially similar to an offence described in subclause (i) or (ii).

Further prescribed disqualifications

   (5)  A new driver is disqualified from receiving credit for additional years of driving experience under subsection (2) in the circumstances prescribed by regulation.

Exception for parking offences

   (6)  A new driver is not disqualified,

  (a)  under clause (4) (b) as a result of a suspension of his or her driver's licence for non-payment of a fine that is solely related to the unlawful parking of a motor vehicle; or

  (b)  under clause (4) (c) as a result of a conviction for an offence that is solely related to the unlawful parking of a motor vehicle.

Definitions

   (7)  In this section,

"Ministry-approved" means approved by the Ministry of Transportation under the Highway Traffic Act; ("approuvé par le ministère")

"motor vehicle" has the same meaning as in subsection 1 (1) of the Highway Traffic Act; ("véhicule automobile")

"new driver" means a driver with less than six years driving experience. ("nouveau conducteur")

Commencement

   3.  This Act comes into force on January 1, 2013.

Short title

   4.  The short title of this Act is the New Drivers' Insurance Rate Reduction Act, 2012.

EXPLANATORY NOTE

The Bill requires a risk classification system used by an insurer to determine rates for automobile insurance to provide for lower rates for new drivers by crediting new drivers with additional years of driving experience.

A new driver is disqualified from receiving additional years of credit in a number of circumstances, including if the driver has been convicted of certain driving offences or has had his or her driver's licence suspended for non-payment of certain fines.