16 insurance companies fined more than $1.5 million for overcharging Alberta motorists

Alberta's superintendent of insurance issued more than $1.5 million in fines against 16 auto insurance companies for overcharging motorists for coverage, but what hasn't been revealed is how much extra money drivers had to pay. 

The Insurance Bureau of Canada and several of the penalized companies say the money has already been refunded to drivers.

The TD Bank Group, which includes Primmum Insurance, Security National Insurance Company and TD Home and Auto Insurance, received $885,000 in fines, the highest amount among all of the companies that were penalized.

The TD Bank Group issued a statement to CBC News saying the overcharges were the result of a system error that affected some customers' policies. The company says the error was disclosed to the superintendent of insurance and "all impacted current and past customers" were reimbursed with interest. 

"We regret the inconvenience this may have caused some of our customers and have taken all measures to correct our system to ensure customers have the right coverage that fits their specific needs and circumstances," said the statement.

Intact Insurance was fined $165,000 over the four-year period, the second highest among the penalized companies. Economical Insurance and its affiliate Sonnet Insurance were fined the same amount. The company said the error was the result of a technical issue and anyone who was overcharged was given a refund.

"This related to a technical error, which until early 2019 impacted a small number of our customers through both overcharges and undercharges on their premium," said Paul MacDonald, an executive vice-president with Economical Insurance.

"As soon as we became aware of the error, we fully refunded any overcharged amounts to customers, self-reported the situation to the superintendent of insurance in Alberta, and enhanced testing with a view to preventing this type of error from happening again," said MacDonald.

Intact Insurance also provided a statement to the CBC News.

"From time to time, during our rigorous audit processes, we discover errors that unintentionally result in an insurance rate being higher or lower than the rate that is filed with our various regulators."

"We take these issues very seriously and upon discovery we work to make it right. This includes reporting discrepancies to the regulators where necessary and providing our customers with a refund of any amounts overcharged plus interest."

The office of the superintendent of insurance, which falls under the provincial department of Treasury Board and Finance, issued a total of 29 penalties against those 16 companies. The actual violation under the Insurance Act reads, in part, "charging private passenger automobile insurance premiums in excess of approved rates."

"Alberta's government is serious about protecting Albertans and continues to maintain a regulatory environment that supports the fair treatment of consumers and integrity of the industry," read a statement to the CBC from Treasury Board and Finance.

Money refunded

A spokesperson for the Insurance Bureau of Canada says any driver who was overcharged has been refunded. 

"If they were overcharged, they would have been provided that money back," said Celyeste Power, the bureau's vice-president for Western Canada.

What's unclear is how much motorists were overcharged.

"In some cases, it could be as little as a couple of dollars. In other cases, it might be different."

"They would all have to rectified," Power said.

"Because that's what the superintendent of insurance is there to do, is to make sure that these anomalies are rectified and that consumers are protected," she said.

The department of Treasury Board and Finance added: 

"In these cases, where an overcharge occurs, it is always repaid to Albertans with interest."

Issue of trust

A group that is often critical of the insurance industry says the number of charges and the amount of fines against insurance companies will further tarnish the industry's reputation.

"It tells us that there's a concerning pattern of behaviour happening in the insurance market. primarily in auto," said Keith McLaughlin, a spokesperson for FAIR Alberta, a group that was formed to fight a cap on minor injury insurance claims stemming from motor vehicle collisions.

McLaughlin says Albertans should be given more information about how much drivers were overcharged to determine whether the fines against the industry were sufficient.

"Are they functioning as a deterrent? Or are these fines just a slap on the wrist?"

The Insurance Bureau of Canada suggests the amount of the fines should not be used to speculate on the amount drivers were overcharged.

"I suspect that those numbers are nothing alike. The fines are set based on which part of the act was not followed, and not based on how much was overcharged or undercharged or what rule was involved," said Power.

The Alberta government has launched a review of auto insurance in the province, saying it wants to ensure the industry can remain viable and that drivers can get affordable coverage.

A spokesperson for the government says the advisory committee has completed its work and a report has been given to the finance minister. It's expected to be made public "soon."

Bryan Labby is an enterprise reporter with CBC Calgary. If you have a good story idea or tip, you can reach him at bryan.labby@cbc.ca or on Twitter at @CBCBryan.