It’s no silver bullet, but insurers in British Columbia have agreed to end a practice that helped contribute to skyrocketing condo insurance rates.

The practice known as ‘best terms pricing’ will end by January 1st. That is a practice where multiple insurers all agree to submit their own bid to carry a portion of the total risk relating to insuring a strata property – but the final premium paid by strata owners would usually be based on the highest of those bids even if the majority of quotes were lower.

“While removing best terms pricing will help alleviate some of the pressure on premiums it’s not going to be the sole sort of core reason to lower overall premiums and claims costs need to be reduced and show signs of sustained reduction,” Frank Chong, the Vice President of Regulation for the BC Financial Services Authority, said on the NL Noon Report.

“A sample of one full month of properties that purchased strata insurance, about 94-per cent of those properties were impacted. And from the data sample overall premiums were 27-per cent higher than if the bid was placed in a different method.”

Chong says a final report on condo insurance rates should be completed by the new year.

“There is certainly more that needs to be done and we are hopeful that as part of our final report that we can shed more light as to what are some of the areas that can be addressed as part of addressing the foundations of strata insurance,” she said.

Newly appointed Finance Minister Selina Robinson calls the move is a positive step.

Robinson was Housing Minister when she introduced legislation to change the Strata Property Act and the Financial Institutions Act in June to bring more transparency to the insurance market.

“This is a very complex issue with many factors contributing to rising premiums, and I look forward to receiving BCFSA’s final report and reviewing its findings so that we can continue to work towards viable solutions to this problem impacting many residents in British Columbia,” she said, in a statement.