Montreal Economic Institute: Price controls “highly detrimental” to the market

A January 2026 report from the Montreal Economic Institute (MEI) confirms that consumer harm results from price controls in insurance.

It states: “Price controls have proven highly detrimental to Alberta’s auto insurance market, sending strong anti-free-market signals to both consumers and insurers. Over time, such interventions undermine the very functioning of the market itself.”

The report notes the long history of the Alberta government “meddling with insurance prices” and describes the impact of intensifying price controls:

• Motorists have less incentive to avoid risk, and more incentive to pursue claims they might otherwise have paid out-of-pocket.
• Insurers become more selective about whom they insure, run stricter claim investigations, and reduce coverage quality.
• Insurers may even stop offering auto insurance and leave the market entirely.

The MEI urges the Albera government to “try something different” by following Europe’s example: letting premiums be determined solely by competition and market forces.

“If the current government continues to impose price controls,” the report concludes, “then both Albertans and their auto insurers can expect to continue to suffer the pernicious effects of those rate caps, never achieving sustainable premiums”

Read the Price Controls and Pernicious Outcomes: Alberta’s Auto Insurance Market report.

Read more about why rate intervention in insurance does not work.