The Effects of Rate Regulation on the Volatility of Auto Insurance Prices Evidence from Canada

Previous studies using U.S. data have found that rate regulation reduces competition, availability of coverage and increases volatility of insurance premiums. This article extends the U.S. literature to the Canadian context to examine whether rate regulation increases premium volatility in the province of Ontario. Based on an empirical analysis using data covering six provinces over the 18–year period from 1984 to 2001 we find that rate regulation does make insurance premium more volatile for consumers. This finding is consistent with results from other jurisdictions