Finance Minister Charles Sousa said rates across the province have dropped almost five per cent on average over the last six months and will fall further if the bill passes.
"Now some believe, and will try to tell you, that rates can magically fall. That's impractical," he said.
"To reduce rates in a realistic and practical and lasting way, we must look at the entire picture. The big picture."
The proposed legislation will combat fraud, make it easier to settle disputes, provide better oversight and curb costs, allowing the government to meet its target of an average 15 per cent cut to premiums over two years, Sousa said.
The dispute resolution system for injured drivers would be moved from Ontario's insurance regulator to an existing tribunal run by the Ministry of the Attorney General, which the industry said would eliminate one step in the appeals process.
Moving files from one office to another isn't enough, said Ralph Palumbo of the Insurance Bureau of Canada. The government needs to provide more resources so the "crazy" backlog of about 16,000 cases can be eliminated.
"If it's done well and right and quickly, we think that costs will come down so that premiums will also come down," he said.
The legislation proposes more oversight of the billing practices of health clinics and allow only licensed service providers to be paid directly by insurers.
Insurance agents or adjusters who abuse the system could also see their licences suspended immediately, Sousa said.
There are measures to cut down on the amount of time vehicles can be stored after an accident, so owners and insurers won't be squeezed for more money.
Some disputes over damages for pain and suffering are being needlessly extended in court to inflate interest payments and increase cash settlements, Sousa said. The bill would align the so-called "prejudgment" interest rate with those for other damages so claims can be settle more quickly.
The government is also thinking of striking an anti-fraud squad, which would tackle serious cases, and oversight of the towing industry, Sousa said.
"We're going to help drivers settle disputes faster, we're going to curb abuse in the system that drives costs up, and this in the end is a more comprehensive and practical plan that is resulting in lower rates," he said.
The Progressive Conservatives agreed that tackling fraud in the system is the best way to help lower premiums, but wouldn't tip their hat on whether they'll support the bill.
Sousa can crow about lower premiums, but he should look at what's behind the numbers, said Tory critic Jeff Yurek.
The biggest discounts are coming from three "non-standard" companies that insure bad drivers, he said.
The government has asked insurers to reduce their premiums to meet their target, which is largely dependent on their financial health.
Because those non-standard insurers charge some of the highest premiums to high-risk drivers, they're providing the biggest reductions.
"The bad drivers who are paying higher rates get a higher discount in order to inflate that average, to make it look like rates across the province are coming down," Yurek said.
Good drivers are paying the price while the minority Liberals placate the New Democrats to stay in power, he said.
"The NDP and the Liberals have given an extra discount to the bad drivers, and the good drivers — what I'm hearing from my office — their rates are still going up," he added.