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TORONTO — Ontario drivers may have overpaid billions of dollars in insurance because a profit benchmark for the industry is set way too high by Ontario’s regulator, a new study has found.

Consumers likely overpaid by $3 to $4 billion between 2001 and 2013 — $840 million in 2013 alone — according to the Schulich School of Business study commissioned by the Ontario Trial Lawyers Association.

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The study pointed to the profit benchmark set by the Financial Services Commission of Ontario at 11 per cent return on equity as being too high.

Premiums have been too high, and consumers in Ontario have been paying too much for auto insurance

“Consequently, premiums have been too high, and consumers in Ontario have been paying too much for auto insurance,” the study authors wrote.

“There is significant room to reduce rates. The combination of a return on equity cap of 5.8 per cent, the 10-year rolling average for 2013, and a lower operating cost assumption could reduce auto insurance premiums by at least 7.9 per cent based on 2013 data.”