The Competition Bureau announced that an investigation has found no evidence that any insurance company or group of companies has violated the Competition Act in selling auto and P&C insurance.

The competition regulator was responding to complaints regarding insurance premium increases. In March 2004, six MPs complained about increases in car, property and commercial insurance premiums in Canada. They alleged that the insurance industry was abusing its dominant position and not providing Canadians with reasonable and competitive rates. The Bureau also received complaints from several members of the public.

The Bureau reports that it examined the allegation using the tests provided in the Competition Act under the abuse of dominance provisions. And, it did not identify any company or group of companies that dominated the supply of car and property insurance in any province or that engaged in anti-competitive acts.

“While the Bureau realizes Canadians are concerned about rising insurance premiums, price changes in any industry can be the result of a variety of factors, such as increased costs to provide the product, and do not necessarily constitute anti-competitive behaviour,” it said in a news release.

The Bureau says that it examined each province separately, since provinces regulate auto and P&C insurance. In reviewing the complaints, the Bureau obtained and analyzed data to determine the shares of insurers in each province. It also contacted participants in the insurance industry.

It notes that in four provinces — BC, Saskatchewan, Manitoba and Quebec – an insurer owned by the provincial government sells all compulsory and, in some cases, most non-compulsory car insurance. In other provinces, many insurance companies compete with each other and none of them are big enough to exert market dominance either individually or jointly. All provinces regulate the prices of compulsory car insurance through either government-owned monopolies or the approval of rates to ensure that they are neither excessive nor insufficient.

Regarding P&C insurance, it found that in each province, many insurance companies compete with each other and none of them are big enough to exert market dominance either individually or jointly.