New Brunswick drivers facing sudden increases in auto insurance premiums may be experiencing the unintended consequences of the province’s outdated regulatory system, according to an analysis by the Insurance Bureau of Canada (IBC).
The province’s rate approval process, intended to protect consumers, may actually contribute to the large, unpredictable rate spikes that have become common over the past decade, Graham Little, director of government relations for IBC’s Atlantic region, wrote in a commentary published Thursday.
The issue stems from how the provincial regulator handles rate changes. When insurers seek increases exceeding 3% annually, they must undergo a hearing process that typically takes more than 10 months to complete, according to the IBC. The lengthy timeline means that by the time insurers receive approval for annual rates, they often need to file again.
“The time and costs required to obtain rate approval are ultimately passed along to New Brunswick drivers,” Little wrote. “With costs that can be in the hundreds of thousands of dollars and time frames that frequently exceed 10 months, the approval process encourages insurers to wait until rates become unsustainable to justify the expense and time of applying for any increase beyond 3%.”
The regulatory framework includes multiple consumer protections. The New Brunswick Insurance Board reviews proposed rates to ensure they are fair and reasonable. The Financial and Consumer Services Commission oversees regulatory compliance and licensing. The Consumer Advocate for Insurance, a legislative office—the only such position in Canada—handles consumer education and complaints.
Despite these safeguards, the system’s design encourages insurers to delay rate adjustments, resulting in larger increases every few years rather than smaller, incremental changes.
Several factors have increased pressure on insurance costs across the industry. Vehicle repair and replacement expenses have risen, while weather-related damage has become more frequent and severe nationwide. Auto theft poses a particular challenge in New Brunswick, which leads the Atlantic region in vehicle theft, recording 788 claims costing more than $16 million in 2024, according to IBC data.
Little noted that other provinces have addressed similar issues by allowing minor, periodic rate adjustments through streamlined processes that maintain regulatory oversight while reducing delays.
He said New Brunswick’s auto insurance legislation has not seen consumer-focused updates in more than a decade, despite advances in vehicle technology and changing consumer expectations. The current regulatory environment has made it difficult to introduce innovations such as ride-sharing services and usage-based insurance, which require flexible pricing structures.
Modernizing the Insurance Act could help make rates more predictable for New Brunswick drivers and allow for more competitive pricing and innovative insurance products, according to the IBC analysis.
The New Brunswick Insurance Board conducts reviews of rate filings on a company-by-company basis, analysing data and requesting additional information to ensure proposed increases are justified.
Recent industry outlooks show that insurers in Canada are facing pressure to adapt to structural challenges. The Insurance Bureau of Canada has identified auto insurance reform, exposure to catastrophic risks, and rising compliance costs as top agenda items for 2026, with reforms underway in provinces such as Alberta and Ontario aimed at delivering value to drivers and modernizing regulatory frameworks.
