The drive for car insurance equality.

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Author: Sillars, Les

Section: THE LAW

THE DRIVE FOR CAR INSURANCE EQUALITY

The AHRC will take its war on premium discrimination to the Supreme Court

In its seemingly insatiable drive for equality, the Alberta Human Rights Commission (AHRC) wants young men and women to pay the same for car insurance. The AHRC is so convinced that the insurance industry needs repair that, after losing the latest round of a five-year legal battle, it announced last month that it would pursue the matter to the Supreme Court of Canada. Nonplussed industry spokesman retort that the whole rationale for insurance seems lost on the AHRC ideologues.

The test case began in 1988 when Adrian Watters, then 19, filed a complaint with the AHRC. The Co-operators General Insurance Company had quoted him a car insurance rate of $1,187, twice as much as his 17-year-old girlfriend would have paid even though he had the better driving record. This, Mr. Watters contended, constituted sex-based discrimination contrary to the provincial Individual's Rights Protection Act (IRPA). The AHRC ruled in his favour, as did the Alberta Court of Queen's Bench in Co-operators' subsequent appeal.

However, in early November a three-judge panel of the Alberta Court of Appeal unanimously overturned that finding. Discrimination against males aged 16 to 24 was "reasonable and justifiable" and therefore permissible under section 11.1 of the IRPA, wrote Court of Appeal Justice J.A. Stratton. Young males account for 40% of all road accidents resulting in death or injury, Mr. Justice Stratton noted, and are "seriously over-represented in traffic crashes of any severity compared to females." Consequently, it would be wrong to give young males an "undeserved break" by making young females pay between 24% and 29% more, as estimated by independent testimony, for their car insurance under a non-discriminatory insurance system. Young males would pay around 15% less.

At a November 26 meeting, the AHRC decided in favour of an appeal to the Supreme Court of Canada. In a press release, AHRC chief commissioner Jack O'Neill complained that the acceptance of discriminatory treatment "leads to unacceptable consequences inside and outside of auto insurance." Women, while beneficiaries in car insurance, would suffer elsewhere from "gender ratings," paying more for services like annuities and health and disability insurance. The ruling opens the door to similar statistically based discrimination on the grounds of race, the commissioner also warned.

Insurance representatives, noting that statistically based differentiation is the very underpinning of their industry, are mystified by Mr. O'Neill's entire lament. Co-operators Insurance regional vice-president Graham Mehain says the higher rates for young males for car insurance have nothing whatsoever to do with unreasonable prejudice. "We operate on statistics," he says, "and charge accordingly." Alan Wood of the Insurance Bureau of Canada adds that statistics "are the best means that we have of evaluating risk."

Regarding the AHRC contention that the appeal court ruling may trigger the spread of sex-based discrimination into other aspects of financial and insurance services, Mr. Mehain notes it already exists there. Women get different rates than men when purchasing annuities or life insurance, for example, simply because statistics show that women live longer.

The AHRC argued before the Court of Appeal that other, unbiased premium systems exist. Indeed, the provincially owned Insurance Corporation of British Columbia has not considered the sex of car insurance applicants since 1980. "We could deal with it," agrees Mr. Mehain. The catch, though, is that other groups will have to pay more to compensate for the reduced premiums of high-risk drivers. "The only thing it will change is that other people will have to contribute more to the pot."

PHOTO: Insurance executive Mehain: We operate in statistics.

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By Les Sillars

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