Whole Life Insurance is sometimes called a forced savings plan because of the way it accumulates cash value. Whole Life comes in many forms and it takes on different needs for its policy holders. The two major needs are protection (death benefit) and savings and in a Whole Life policy these two parts are part of the premium. Generally the premium in a Whole Life policy is thought to be divided into two parts: risk and savings.

The Risk portion of the premium in a Whole Life policy is the amount of the premium that is applied to cover the death benefit. This Risk premium portion can be estimated by finding the premium of a 20-30 year Level Term policy for the same death benefit written by the same insurance company. The difference between the cost of the term policy premiums and those of the comparable whole life policy will give a reasonable estimate of the Saving portion of the premium. You could also use the cash value accumulation tables for the Whole Life policy to help you understand how this value changes over time as the cash values accumulate.

The rate of accumulation of cash values in an insurance policy is dependent on a number of things, but the main factor in how much and how fast cash value grows is the type of insurance company. There are basically two types of insurance companies writing Whole Life Insurance; Stock or Mutual companies. Stock companies are operated as would any standard business with the ownership (or stockholders) of the company determining payouts through the action of the management of the company. The stockholders of the insurance company in this case are a separate group of individuals from the insured. In a Mutual company the owners of the company are the policy holders. In Mutual companies there is usually a higher payout and a more rapid increase in cash values than those of Stock insurance companies. While almost all insurance companies invest money from their premiums, the profits from these investments in Mutual companies are usually designated to be returned to the policy holders as “dividends”.

As an investment Whole Life Insurance has a record of unmatched safety and consistency. As an investment vehicle it has historically returned a 3% to 4% annual rate of return (Mutual companies a little more) and have done so throughout some of the worst economic times in history.

For a large part of this country’s history Whole Life Insurance was the predominant investment vehicle of the common man. Due to its nature as it served a forced savings plan assuring that individuals or families would be forced to save as part of a plan to protect against untimely death. As it turned out Whole Life was a safe way to provide the protection of life insurance and a convenient way to have an automatic savings plan. Whole Life Insurance and the investments of its premiums by insurance companies has been the foundation for much of the economic growth and development of this nation.

New research from the Association of British Insurers (ABI) suggests that up to 200,000 homes will face problems in getting insurance when an agreement with the government ends in 2013.

Home insurance problems

ABI analysis has identified the areas with the greatest proportion of homes at flood risk. Boston and Skegness topped the list, followed by the Vale of Clwyd, Folkstone and Hyde and Windsor.

The current agreement between home insurance companies and the government, called the Statement of Principles, guarantees that homes at risk from flood will continue to be insured while the government continues to improve flood defences.

However, the agreement is due to end on 1 July 2013 and there is no commitment at present to extend the protection. The ABI wants the government to take on some responsibility for funding the insurance of those properties most at risk.

Paying for flood defences

Part of the problem is that it is unclear who will pay for improvements to flood defences. The Public Accounts Committee (PAC) has raised the point about uncertainty concerning funding the improvement in flood defences and protection in the future.

Maintaining and improving flood defences in the UK currently costs around £1.1 billion per year, with the total set to rise. An independent report for the government has claimed that this might increase to between £1.5 billion and £3.5 billion per year by the 2020s.

Decisive action needed

Simon Douglas, director of broker AA Insurance, says: ‘Flood protection is a national priority, yet many people in flood-prone areas may find their homes difficult to insure from later this year.

‘People want the government to take decisive action now, to ensure that their homes are protected. But that’s not happening with the Environment Agency’s budget cut by 10%.’

Quebec child-protection officials tell The Canadian Press that case workers didn’t have the full picture of what was going on in the household.

Youth protection is divided by language in Montreal, with one agency handling English complaints and the other handling French ones.

When the French-language agency received a complaint in April 2009, it didn’t know that its English counterpart had investigated an earlier complaint by the Shafia sisters the previous year.

Until recently, there was no provincewide registry to help the different agencies share case information.

The head of youth protection at Montreal’s English-language Batshaw agency says that if case workers had had details of the prior complaint, they might have treated the case differently.

A policy change is already in effect. A new Quebec-wide registry, which allows the sharing of information, was actually launched just one month after the Shafias’ final complaint in 2009.

The Batshaw agency says it followed protocols, and has since conducted a widespread internal investigation into what happened in the Shafia case.

The bodies of Zainab, Sahar, and Geeti Shafia, along with Rona Amir Mohammad, were found in a car at the bottom of the Rideau Canal in Kingston on June 30, 2009. On Sunday, the three fellow members of the Montreal family were found guilty of four counts of first-degree murder.

But it’s an important question. If you don’t, you could leave your family in a difficult financial predicament. On the other hand, if you buy too much, you could end up wasting thousands of dollars on something you don’t really need. When determining how much life insurance to buy, here are some common myths to steer clear of:

1) Everyone needs to have life insurance.

Life insurance has two main functions. The most common is to provide for people who are financially dependent on you like children and perhaps a spouse. The second is to pay estate taxes so that your heirs won’t have to sell property or a business to do so.

If you don’t have dependents or a taxable estate (currently over $5.12 million), you may not need life insurance. Keep in mind that insurance companies collect premiums, invest the money, and then pay their expenses and make a profit with the difference. This means that on average, most people would be better off skipping the insurance and investing the money on their own since the insurance companies pay out less than the total amount that they collect plus the investment returns. On the other hand, your family could be one of the few that really needs the insurance. Like all forms of insurance, the key is to have as much as you need but no more.

One final note on this is that even if you don’t currently need life insurance, you may still want to purchase it now. That’s because if your health deteriorates, it could be a lot more expensive or you may no longer be able to purchase it at all when you need it. So if you anticipate needing life insurance in the future, it might be a good idea to get it while you can.

2) You need life insurance to pay off your debts.

This is a common myth. Many people are concerned about their heirs inheriting their credit card or other debt they may have accumulated. While debts can reduce the inheritance that you leave your heirs, excess debt dies with you unless the debt was joint, community property or had a co-signer/guarantor.

3) Everyone needs life insurance to pay for your funeral and other final expenses.

Purchasing a life insurance policy for this purpose can be the most expensive way to fund it. If your heirs will be inheriting any savings or other liquid assets, they can always use them to pay these costs. But if your debts wipe out your estate, a small final expense policy may make sense to avoid leaving your heirs with this burden.

This is the year that will make or break the health care law. States were supposed to be partners in carrying out the biggest safety net expansion since Medicare and Medicaid, and the White House claims they’re making steady progress.

But an analysis by The Associated Press shows that states are moving in fits and starts. Combined with new insurance coverage estimates from the nonpartisan Urban Institute, it reveals a patchwork nation.

Such uneven progress could have real consequences.

If it continues, it will mean disparities and delays from state to state in carrying out an immense expansion of health insurance scheduled in the law for 2014. That could happen even if the Supreme Court upholds Obama’s law, called the Patient Protection and Affordable Care Act.

“There will be something there, but if it doesn’t mesh with the state’s culture and if the state is not really supporting it, that certainly won’t help it succeed,” said Urban Institute senior researcher Matthew Buettgens.

The 13 states that have adopted a plan are home to only 1 in 4 of the uninsured. An additional 17 states are making headway, but it’s not clear all will succeed. The 20 states lagging behind account for the biggest share of the uninsured, 42 percent.

Among the lagging states are four with arguably the most to gain. Texas, Florida, Georgia and Ohio together would add more than 7 million people to the insurance rolls, according to Urban Institute estimates, reducing the annual burden of charity care by $10.7 billion.

“It’s not that we want something for free, but we want something we can afford,” said Vicki McCuistion of Driftwood, Texas, who works two part-time jobs and is uninsured. With the nation’s highest uninsured rate, her state has made little progress.

The Obama administration says McCuistion and others in the same predicament have nothing to fear. “The fact of states moving at different rates does not create disparities for a particular state’s uninsured population,” said Steve Larsen, director of the Center for Consumer Information and Insurance Oversight at the federal Department of Health and Human Services.

That’s because the law says that if a state isn’t ready, the federal government will step in. Larsen insists the government will be ready, but it’s not as easy as handing out insurance cards.

Someone has to set up health insurance exchanges, new one-stop supermarkets with online and landline capabilities for those who buy coverage individually.

A secure infrastructure must be created to verify income, legal residency and other personal information, and smooth enrollment in private insurance plans or Medicaid. Many middle-class households will be eligible for tax credits to help pay premiums for private coverage. Separate exchanges must be created for small businesses.

“It’s a very heavy lift,” said California’s health secretary, Diana Dooley, whose state was one of the first to approve a plan. “Coverage is certainly important, but it’s not the only part. It is very complex.”

California has nearly 7.5 million residents without coverage, more than half of the 12.7 million uninsured in the states with a plan. An estimated 2.9 million Californians would gain coverage, according to the Urban Institute’s research, funded by the nonpartisan Robert Wood Johnson Foundation.

Democrats who wrote the overhaul law had hoped that most states would be willing partners, putting aside partisan differences to build the exchanges and help cover more than 30 million uninsured nationally. It’s not turning out that way.

Some states, mainly those led by Democrats, are far along. Others, usually led by Republicans, have done little. Separately, about half the states are suing to overturn the law.

Time is running out for states, which must have their plans ready for a federal approval deadline of Jan. 1, 2013. Those not ready risk triggering the default requirement that Washington run their exchange.

Yet in states where Republican repudiation of the health care law has blocked exchanges, there’s little incentive to advance before the Supreme Court rules. A decision is expected this summer, and many state legislatures aren’t scheduled to meet past late spring.

The result if the law is upheld could be greater federal sway over health care in the states, the very outcome conservatives say they want to prevent.

“If you give states the opportunity to decide their own destiny, and some choose to ignore it for partisan reasons, they almost make the case against themselves for more federal intervention,” said Sen. Ben Nelson, D-Neb.

A conservative, Nelson was on the winning side of a heated argument among Democrats over who should run exchanges, the feds or the states. Liberals lost their demand for a federal exchange, insulated from state politics.

“It’s pretty hard to take care of the states when they don’t take care of themselves,” said Nelson, who regrets that the concession he fought for has been dismissed by so many states.

The AP’s analysis divided states into four broad groups: those that have adopted a plan for exchanges, those that made substantial progress, those where the outlook is unclear, and those with no significant progress. AP statehouse reporters were consulted in cases of conflicting information.

Thirteen states, plus the District of Columbia, have adopted a plan.

By contrast, in 20 states either the outlook is unclear or there has been no significant progress. Those states include more than 21 million of the 50 million uninsured Americans.

Four have made no significant progress. They are Arkansas, Florida, Louisiana and New Hampshire. The last three returned planning money to the federal government. In Arkansas, Democratic Gov. Mike Beebe ran into immovable GOP opposition in the Legislature. Beebe acknowledges that the federal government will have to run the exchange, but is exploring a fallback option.

In the other 16 states, the outlook is unclear because of failure to advance legislation or paralyzing political disputes that often pit Republicans fervently trying to stop what they deride as “Obamacare” against fellow Republicans who are more pragmatic.

In Kansas, for example, Insurance Commissioner Sandy Praeger is pushing hard for a state exchange, but Gov. Sam Brownback returned a $31 million federal grant, saying the state would not act before the Supreme Court rules. Both officials are Republicans.

“It’s just presidential politics,” said Praeger, discussing the situation nationally. “It’s less about whether exchanges make sense and more about trying to repeal the whole law.” As a result, outlook is unclear for a state with 361,000 uninsured residents.

There is a bright spot for Obama and backers of the law.

An additional 17 states have made substantial progress, although that’s no guarantee of success. Last week in Wisconsin, GOP Gov. Scott Walker abruptly halted planning and announced he will return $38 million in federal money.

AP defined states making substantial progress as ones where governors or legislatures have made a significant commitment to set up exchanges. Another important factor was state acceptance of a federal exchange establishment grant.

That group accounts for just under one-third of the uninsured, about 16 million people.

It includes populous states such as New York, Illinois, North Carolina and New Jersey, which combined would add more than 3 million people to the insurance rolls.

Several are led by Republican governors, including Virginia and Indiana, which have declared their intent to establish insurance exchanges under certain conditions. Other states that have advanced under Republican governors include Arizona and New Mexico.

For uninsured people living in states that have done little, the situation is demoralizing.

Gov. Rick Perry’s opposition to the law scuttled plans to advance an exchange bill in the Texas Legislature last year, when Perry was contemplating his presidential run. The Legislature doesn’t meet this year, so the situation is unclear.

McCuistion and her husband, Dan, are among the nearly 6.7 million Texans who lack coverage. Dan is self-employed as the owner of a specialty tree service. Vicki works part time for two nonprofit organizations. The McCuistions have been uninsured throughout their 17-year marriage, although their three daughters now have coverage through the Children’s Health Insurance Program. Dan McCuistion has been nursing a bad back for years, and it only seems to get worse.

“For me it almost feels like a ticking time bomb,” his wife said.

Dan McCuistion says he doesn’t believe Americans have a constitutional right to health care, but he would take advantage of affordable coverage if it was offered to him. He’s exasperated with Perry and other Texas politicians. “They give a lot of rhetoric toward families, but their actions don’t meet up with what they are saying,” he said.

Perry’s office says it’s principle, not lack of compassion.

“Gov. Perry believes ‘Obamacare’ is unconstitutional, misguided and unsustainable, and Texas, along with other states, is taking legal action to end this massive government overreach,” said spokeswoman Lucy Nashed. “There are no plans to implement an exchange.”

The Insurance Hall of Fame recognizes industry leaders “who have made a broad, encompassing and lasting contribution to the insurance industry and who are recognized by their peers as successful leaders, innovators and visionaries,” the New York-based IIS said in a statement announcing its choice. The IIS honors committee, which consists of senior insurance executives and academics, selects nominees who are voted on by IIS members.

“Mr. Uno stands out among his peers as a true leader and visionary, not just in Japan but on a global level, and I cannot think of anyone in the business who is more deserving of this prestigious award.” said Bernhard Fink, chairman of the IIS honors committee, in a statement.

“Mr. Uno has led Nippon Life through tumultuous times with a steadfast adherence to sound business principles,” said IIS President and CEO Michael J. Morrissey in the statement,

Mr. Uno will be inducted into the Insurance Hall of Fame at the IIS’ annual seminar in Rio de Janeiro on June 18.

The 2,400-page document and a multiyear and multistep implementation don’t help with the confusion.

Proponents and foes say big pieces of the law have been enacted and have already affected millions of people’s lives.

“It’s complicated, but there are very many benefits affecting millions of people,” said Don Berwick, who served as administrator of the Centers for Medicare and Medicaid Services until the beginning of December. “They will not know it’s the Affordable Care Act, but it is.”

In 2011, the law targeted specific groups of people — mostly the young and senior citizens — while the most argued about pieces won’t come until 2014. Then, assuming the Supreme Court doesn’t rule against the “individual mandate,” the provision that requires most Americans to buy health insurance, millions more people will be affected.

Health insurance exchanges for people who don’t receive insurance through their employers will start working as Medicaid expands through federal funding to include more people who can’t afford insurance. Lower-income Americans will receive help paying their premiums.

“The vast majority of people who will benefit will start receiving benefits in January 2014,” said Ron Pollack, founder of Families USA, a non-profit organization that promotes health care for everyone. “I would say a significant majority will still be confused by what’s in the bill and what’s in it for them — but not the 20-year-olds and not the seniors.”

In 2012, Medicare providers will be able to start affordable care organizations to improve quality and cut costs, while the government will implement rules making it easier to use electronic medical records and share data about which treatments work the best and which need improvement. Health and Human Services has designated 32 health care providers as members of the first wave of affordable care organizations that will start Jan. 1 and be eligible for bonus payments from Medicare if they meet savings and care targets.

Here are the five major changes in health care that occurred in 2011 because of the health care law:

A crackdown on fraud

The Justice Department recovered $2.9 billion in health care fraud funds in 2011, according to Vice President Biden. The government was on pace for an 85% increase in health care fraud prosecutions over last year, according to government documents.

In fiscal year 2010, the government prosecuted 731 health fraud cases. In fiscal year 2011, the government prosecuted 1,235 cases, a 69% increase over last year, according to the Transactional Access Records Clearinghouse, a non-profit group that uses government documents to track data. This is the highest number recorded since the group began keeping track 20 years ago.

In September, the government announced it charged 91 people in eight cities with what Attorney General Eric Holder called the biggest takedown in Medicare task force history: Those arrested were accused of trying to steal $295 million from Medicare.

The increase in fraud arrests comes, in part, because the law created longer prison terms for health fraud, increased the number of strike force teams that specialize in health fraud, and provided funding for technology that allows investigators to look for suspicious patterns in claims before the government pays the bills. Beginning in December, the government announced it would no longer automatically pay prescription drug bills, instead withholding money if officials saw evidence of fraud. Grants for Senior Medicare Patrols and health fraud teams have increased in states that deal with the most fraud, such as Florida, California, New York and Michigan.

The new rules have changed how officials fighting Medicare fraud do their jobs, said John Spiegel, director of the Medicare Program Integrity Group. “There are plenty of provisions in the Affordable Care Act to help with fraud fighting,” he said. “We’re consumed with doing that now.”

Conservative opponents of the health care law say fighting fraud helps only at the margins.

“It’s not going to change the structure of these programs,” said Nina Owcharenko, director of the conservative Heritage Foundation’s Center for Health Policy Studies. Fraud, she said, actually “shines a microscope on why they don’t really work.”

Private industry, Owcharenko said, has lower levels of fraud because it confronts it more quickly.

However, private insurers also benefit from the law’s fraud provisions. By sharing data with insurance companies, the government has recovered millions of dollars of fraud money. In January, the FBI investigated 533 people in Puerto Rico who allegedly conspired with doctors to send false accidental injury claims and steal $7 million from American Family Life Insurance.

Relief for those 25 and younger

The law allows young adults ages 19 to 25 to stay on their parents’ health insurance policies. That means, HHS Secretary Kathleen Sebelius said, that they can take entry-level jobs in fields they like, such as technology start-up firms, rather than take jobs just for the benefits. The law also allows young people with pre-existing conditions, such as heart problems or neurological disorders, to maintain health insurance.

Finally, the so-called invincibles have incentive not to decide they can live without insurance because they are young and healthy. That decision could leave them in debt in case of a medical emergency.

The number of young adults who took advantage of this provision: 2.5 million.

The percentage of adults ages 19 to 25 with health insurance rose from 66.7% in September 2010, when the provision took effect, to 71.9% in June, according to the Centers for Disease Control and Prevention’s National Center for Health Statistics. Other age groups either fell or remained stable.

“This is just the beginning of the implementation,” Pollack said. “I’m presuming that with each passing month and year, the proportion will grow significantly.”

In 2014, a provision in the health care law will kick in that makes it illegal to deny coverage to people with pre-existing conditions, meaning these young adults should never be excluded from health insurance.

Pollack said the change is designed to bring costs down for everyone else because a group that’s less likely to become sick will pay into the same insurance pool as older people.

More benefits for senior citizens

Senior citizens have probably benefited the most this year from the law: Prescription drug costs have been reduced by 50% because of drug company discounts. Seniors can receive annual exams and some screenings without paying a co-pay, and they can receive free counseling if they screen positively for obesity to try to decrease heart disease, strokes and diabetes.

“Millions of senior citizens have now received preventive care benefits at no cost,” Pollack said.

By the end of November, more than 24 million seniors had gone in for annual exams or screenings, meaning they went in before something started to bother them.

These benefits aren’t really “free,” because they’re paid for by the taxpayers who fund Medicare, says the Heritage Foundation and the Cato Institute, a libertarian think tank.

The idea of the screenings is to allow physicians to detect problems, such as diabetes and heart disease, before they worsen enough to send patients to the hospital, which could cost more money in the long run.

Seniors benefited from a 50% discount on prescription drugs to help close the “donut hole,” the gap between traditional and catastrophic coverage in the Part D drug benefit program. The law required drug companies to offer the discount to participate in the program.

Through the end of October, more than 2.65 million Medicare recipients saved a total of $1.5 billion on their prescriptions. That’s an average of $569 per patient.

“Lots of seniors have found their medications are much more affordable,” Berwick said. “The donut hole is finally starting to close.”

HHS announced in August that, as benefits have gone up for seniors, Medicare prescription drug plan premiums would go down an average of 76 cents in 2012 from 2011.

Preventive care services for the privately insured

Insurance companies sent out notices last fall that their consumers could go in for annual exams, immunizations and screenings without paying a co-pay, deductible or co-insurance. This came as a requirement of the law for anyone who receives insurance through his employer or who is in a personal plan created after March 2010.

This meant they could be screened for diabetes, have their cholesterol levels checked or receive a mammogram without paying a co-pay or deductible. They could also receive counseling on smoking cessation, losing weight or managing depression.

Many plans already offered these services, so it has been hard to tell what effect this would have on premiums. The debate continues about whether catching problems early will ultimately save money later.

Edmund Haislmaier, senior research fellow at Heritage, said preventive health services, such as breast cancer screening, are “written as recommendations.” He cited this year’s controversy over whether a woman should start screening at 40 or at 50 as an example of why he says there’s not enough research to offer preventive services without costs to the consumer.

HHS Assistant Secretary of Health Howard Koh told senators in October that immunizing children saves $10 for every $1 spent. He said yearly costs for smokers are $2,000; for people who are obese, they are $1,400; and for people who have diabetes, they are $6,600 higher than for people without the disease. Koh said managing heart disease better could save $76 billion by 2023. Managing the seven leading chronic diseases could save $1 trillion by 2023.

Insurance for those with pre-existing conditions

This year, U.S. citizens denied access to insurance policies because they had pre-existing conditions could join the government’s Pre-existing Condition Insurance Plan, found at PCIP.gov. The program is available to people who have not had insurance for at least six months.

This year, HHS worked to make it easier for people to join by cutting premiums in some states by up to 40%. In Florida, the average monthly payment for a person older than 55 was $390. In July, it dropped to $234 a month.

The agency killed the requirement that people needed a letter from an insurance company denying them coverage. They need a letter from a doctor stating that they have a medical condition. The provision is meant as a bridge to 2014, when insurance agencies will not be able to deny coverage to anyone based on a medical condition.

Enrollment has been slow. By the end of October, about 41,500 people had enrolled.

Americans will see several more changes in 2012: Insurance companies must pay rebates to consumers when they spend more than 80% of deductibles on anything besides health care. Providers will form Affordable Care Organizations based around keeping patients healthy, rather than being paid by how many tests or surgeries they perform. And hospitals will be required to publicly release quality data that show how they do with heart attacks, heart failure, pneumonia, surgical care, health-care-associated infections and patient surveys.

Owcharenko said there’s nothing she likes about the law and “nothing that wouldn’t argue for its full repeal.” She and other Republicans have argued that it should be replaced “piecemeal” with provisions they like.

Berwick said that people would change their ideas about the law if they understood it better and that it’s “frustrating” that people don’t understand the good it’s doing. “I wish people were realizing now how much this is helping,” he said. “If it were to go away, they’ll lose this stuff right away.”

A typical case is allotted an hour for argument, but the court scheduled five and a half hours for the health-care case, reflecting how novel some of the questions are and the importance of a dispute that could define the limits of federal power for decades to come.

The main part will take place on Tuesday, March 27, with a two-hour argument over the minimum-coverage provision, which starting in 2014 will require most Americans to carry health insurance or pay a penalty. Challengers argue that Congress lacks the power to impose such a requirement, while the Obama administration maintains that it does under its constitutional authority to regulate interstate commerce, levy taxes and enact any “necessary and proper” laws.

At the March 28 morning session, the court will hear a 90-minute morning argument over which portions of the Patient Protection and Affordable Care Act, as the health law is titled, can survive if the individual-insurance mandate is struck down. The 11th U.S. Circuit Court of Appeals in Atlanta—the only one of four federal appeals courts to find any portion of the Affordable Care Act unconstitutional—held that the balance of the law can stand.

The government, however, argues that if the individual mandate falls, so too must the requirement that insurance companies take all comers and the ban on surcharges for pre-existing conditions. Those two provisions, the government says, are only feasible if the insurance pool is expanded to include younger, healthier people whose premiums will balance the costs.

The challengers, including 26 Republican-controlled states, contend that if the individual mandate goes, the entire Affordable Care Act must also be thrown out.

In his role, Easley will be involved in product development for the fixed annuity carrier.

Easley has thirty years’ experience in the design, pricing and management of annuity and life products.

Previously, Easley served as senior vice president for product manufacturing and underwriting at Allstate Financial.

Liberty Life head of retail Chris Grady said that Matt is an innovator and nimble leader who has guided product through a time of unprecedented challenge for our industry. Product leadership is central to our growth strategy, and we welcome him to the team.

South Carolina-based Liberty Life Insurance provides retirement income solutions that help Americans prepare for the future.

Auto insurance fraud cost the industry about $1.3 billion a year in Ontario, but the province “does not have significant measures in place to combat fraud,” McCarter warned in his annual report.

The number of people killed or injured in auto accidents in Ontario fell 25 per cent in a decade, but the government still guarantees insurers a “reasonable rate of return” of 12 per cent. That figure was last adjusted in 1996, when the long-term bond rate it was based on was 10 per cent.

“The long-term bond rate now is about two or three per cent and they’re still being allowed to earn 12 per cent,” McCarter told reporters. “We think that rate should be reviewed, but on the other hand, because of the very high claim costs in Ontario, they’re paying out a lot more claims.”

Finance Minister Dwight Duncan said the Ontario government would look at McCarter’s recommendation to lower the 12 per cent guaranteed rate of return for insurers, but made no promises to cut the rate.

From 2005 to 2010, the total cost of injury claims rose 150 per cent, even though the number of injury claims in the same period increased only 30 per cent. The number of personal injury claims in 2009 was 20 per cent higher than the number of people who reported having been injured in an automobile accident that year.

“The commission that oversees the auto insurance sector does not know whether insurers are handling claims judiciously and paying out the proper amounts, and it needs better information on the impact of fraud on claim costs,” McCarter wrote.

New Democrats said the province must do a better job over overseeing auto insurance providers.

“We’ve been saying for some time that insurance rates are over the top, unaffordable,” said NDP Leader Andrea Horwath. “This report simply reinforces the fact that the auto insurance industry needs to be overhauled.”

Agencies ignored in Samsung deal

McCarter also found the Liberal government has restricted the Ontario Energy Board’s ability to protect consumers from higher prices because the agency now has no say over charges that comprise half of a hydro bill.

He also said the province allowed green energy projects to proceed without the usual planning, regulation and oversight and complained two key agencies were ignored when the Liberals signed a $7-billion green energy deal with Korean giant Samsung.

“On the Korean-Samsung arrangements, the Ontario Energy Board and the Ontario Power Authority were not in the loop and that did surprise us,” McCarter said.