Province ordered agreement involving brokers in online auto insurance at expected cost of $23M

A month after saying brokers shouldn’t be involved in providing ‘unnecessary service,’ MPI changed tune

Ian Froese · CBC News

The board of Manitoba Public Insurance will turn over all of its online services to insurance brokers in a deal it didn’t want, but felt compelled to take because of the insistence of the provincial government, internal documents show.

A package of documents, emails and presentations show Tory-appointed board members were squeamish about an agreement with insurance brokers that MPI estimated will cost Manitobans an extra $23 million over five years.

The Crown insurer wanted to move some of its simpler transactions — like renewing driver’s licences — online. The move, MPI thought, would appease customers and save cash, since it felt insurance brokers weren’t necessary in those transactions.

But the corporation and its board members say the government intervened to ensure brokers are involved in every transaction going forward.

Those MPI emails do not match statements from Crown Services Minister Colleen Mayer, who has said repeatedly the government only asked the board of MPI and the Insurance Brokers Association of Manitoba (IBAM) to work together and did not prescribe any specific action.

The decision was government’s: MPI

The internal documents, obtained by the Opposition NDP through freedom of information requests, show MPI will transfer some of its services online in five years, while ensuring that brokers will be part of the move.

The expected compensation to brokers as part of that move to online services will increase by $23 million over five years, above the $84.5 million they already receive. Autopac rates will rise by 0.4 per cent, a memo said.

In an email on March 11, 2019, describing the change, MPI president and CEO Ben Graham wrote “the [government] has made the decision.”

The documents also reveal MPI extended the current compensation agreement with brokers until Feb. 28, 2021, “on the advice of government,” a letter written last November by former MPI chief administrative officer Ward Keith reads.

A month earlier, Graham wrote to a government official that “MPI does not believe it is appropriate or reasonable to increase broker funding to compensate for unnecessary services currently being provided that do not require the professional expertise of a broker.”

A clash between the board and brokers became public in March when the Winnipeg Free Press reported the province was lobbying on behalf of the insurance agents, which prompted MPI’s board to seek a legal opinion to determine its rights.

The various emails appear to add credence to the claim the province had a hand in the decision — but the minister responsible for Crown services says the province’s involvement doesn’t violate legislation intended to reduce government interference since it never got in the way.

The Pallister government introduced legislation in 2017 that compels the province to inform the public within 30 days of issuing a directive to the Crown corporation.

In this case, Mayer maintains the government had no say in MPI’s decisions, even though internal emails from MPI staff say they were pressured.

“There was no official directive from Crown Services, the department has been involved in discussions with both organizations on how to deliver services most effectively for Manitoba consumers,” Mayer said in an emailed statement.

“Both MPI and [the Insurance Brokers Association of Manitoba] are encouraged to work together to find a way to provide Manitobans with the services that meet their needs, while understanding the value of professional insurance advice provided by brokers.”

MPI exposed to ‘inconsistent directives’

In a letter to Mayer on Nov. 16, 2018, MPI’s then-board chair Brent VanKoughnet expressed frustration with signing a two-year extension with the insurance agents.

“Without a significant change in [the negotiating] process we are destined to relive the many communication challenges, misunderstandings and unmet expectations that regrettably erode trust, damage reputations, stifle innovation, and limit progress.”

A month earlier, Graham wrote to Grant Doak, deputy minister of Crown services at that point, saying his words were being manipulated by brokers “aimed at getting their lofty and unquantified financial objectives adhered to by government.”

VanKoughnet responded later that night that Graham’s address had a “little more edge” than he’d prefer, “but I understand the frustration and agree that we can’t just keep exposing ourselves to inconsistent directives.”

VanKoughnet was demoted as chair in February, but remained on the board until May. He was replaced by Michael Sullivan, a dentist from Portage la Prairie, Man., the same city in which Premier Brian Pallister previously made his living in the insurance business.

The plan to transition all online services to brokerage oversight was approved less than a month later, an email indicates.

Manitoba Public Insurance has already spent $2.4 million as it evaluates the move to online service delivery.

The corporation estimated if brokers had been left out of the online services, the impact to the agents would be minimal, since online adoption of the simplest transactions would be low. Based on an estimated 20 per cent adoption rate, broker compensation would drop $40,000 — 0.12 per cent of total compensation.

Should the Crown have eliminated insurance broker compensation outright, MPI would save $473 million, the corporation’s documents say.

“Customers’ needs are the driving factor in establishing an online service delivery strategy including a broker network that is invaluable in being a key distribution channel for MPI products and services,” the Crown corporation said in an email Tuesday.

“We recognize this is a big change and MPI and IBAM will work in collaboration regarding online services and how they meet the changing needs of Manitobans.”

CBC News

N.L. moves a step closer to scrapping tax on auto insurance

Rebates to be offered to anyone who renewed their insurance after April 15

CBC News 

The Newfoundland and Labrador government has announced the legislative changes necessary to eliminate the province’s tax on automobile insurance.

Finance Minister Tom Osborne introduced the amendment to the Revenue Administration Act on Tuesday in the House of Assembly.

The amendment has yet to be passed, but Osborne said he expects that will happen hopefully by the end of June.

When passed, that means an end to the 13 per cent tax on auto insurance renewal statements.

“At that particular point the insurance companies can do what they need to do to act as expeditiously as possible in rebating their customers,” Osborne said.

“And once we find out what that dollar figure is from the insurance companies, we’ll rebate the insurance companies.”

Rebate retroactive to April 15

Anyone who paid for their renewal between the amendment’s passing and April 15, the day the Liberal government first announced the end of the tax, will be eligible for the rebate.

However, anyone who renewed their insurance before mid-April won’t see a change in their insurance until their next renewal date.

Osborne said the exact amount that the province will have to pay insurance companies for the rebates is unknown, and will rely on when the amendment passes.

“That’s a moving target, the time that rebates start or that this becomes official, because the moment it becomes official and it’s law, insurance companies can stop charging the tax,” Osborne said.

“But every day there are further renewals … so we haven’t calculated that, but it’s about $57 million on an annual basis that the reduction in automobile sales tax will be for the province.”

Osborne said getting the changes to the bill through will mean there’s more time for all members in the House of Assembly to debate the Liberal budget.

“It takes pressure off of any timelines. We’ve agreed to provide whatever time is necessary to the members of the opposition and the third party and independent members to debate the budget as long as they wish, to whatever extent they wish,” Osborne said.

“This removes any time barriers. This interim supply measure will allow a debate to continue on into July if necessary.”

Automated Vehicles And The Future Of Automobile Insurance İn Ontario

Article by David M. Rogers

A few years ago, I listened to two friends have a long discussion about the relevance of automated vehicles. One friend believed people physically driving vehicles would become a thing of the past over the next 20 years. The other felt automated vehicles would never fully catch on as most humans enjoy driving and being in control of their own vehicle.

I, for one, dislike driving, especially for long stretches on large highways and would welcome a sophisticated computer system to take on that burden. But is this a reality? If so, will it be safe? Most importantly for some, what are the insurance implications?

Well, just maybe the automated vehicle is the long sought after solution to many of the problems found in Ontario’s current automobile insurance regime.

Automated Vehicles are Coming

Most people in the insurance industry know that fully automated vehicles are coming. It is now not a question of if, but rather where, how and for whom.

There are currently six recognized levels of self-automation in vehicles. These range from zero to five, with zero being a fully human operated vehicle and five being a fully automated vehicle with no steering wheel, gas pedal or other manual functions. Currently, partial self-automation is included in most new vehicles, including cruise control, lane departure warnings and automated braking.

Studies suggest there will be 21 million fully automated vehicles on the roads by 2026. The Victoria Transportation Policy Institute predicts that half of all new vehicles sales in Canada will be fully automated by 2040. There are already automated shuttles running in certain North American cities and university campuses.

It is anticipated the next use of this technology will come through ride share programs such as Uber and automated taxi services, possibly followed by automated farm equipment, mining machines and delivery vehicles, including long haul transport trucks. Perhaps we will see the end of most privately owned passenger vehicles, with a small percentage of the population who actually enjoy driving being the exception.

Automated vehicles will most certainly create safer roads for the people of Ontario. The U.S. National Highway Traffic Safety Administration states that human error is the cause of 90 percent of motor vehicle collisions in that country.

Reliance on cameras, sensors and computer systems removes the problem of human error and significantly increases the ability of a vehicle to avoid a collision.

This technology will continue to advance and improve, which should significantly reduce the number of motor vehicle accidents that occur, and in turn, the number of people being injured.

Impact on Motor Vehicle Litigation

However, collisions will still occur. There will always be accidents between non-automated vehicles, but also between automated and non-automated vehicles and even between fully automated vehicles.

An important question then is: who is at fault? Is it the driver? Is it the owner? Is it the manufacturer, or is it the designer of the technology itself?

One can envision a scenario where apportioning fault for a motor vehicle accident turns into an overly complicated product liability dispute between multitudes of large sophisticated parties. There may be fewer claims, but those claims that do come forward will be significantly more complicated and expensive.

Take for example a straightforward rear-end collision involving an automated vehicle, where a person sustains a whiplash injury. Litigation over that person’s entitlement to damages would require a determination of fault, and whether there were failures in components of the automated vehicle, and if so, which ones.

For instance, was there a failure in the vehicle’s software or was the software not updated properly? Was it caused by a faulty sensor? Was there a manufacturer defect with a key component, or was it some tiny sub-component that failed? How difficult, and expensive, would it be for an injured plaintiff to prove fault in this scenario?

Solutions and the Future of Motor Vehicle Insurance

In order to avoid this problem, consideration should be given to a regulatory framework where a single party, such as the vehicle manufacturer, is deemed responsible for any defect with the vehicle, and a claim is resolved with the injured person on that basis. That party can in turn claim over against any of the other potentially liable parties.

There could even be some type of an agreement between vehicle manufacturers, dealers and software developers in order to apportion the risk between them, and avoid the extensive costs of litigating these types of disputes.

This framework is consistent with a recent recommendation made by the Insurance Bureau of Canada (“IBC”) in an attempt to update insurance coverage in light of the rise of automated vehicles.

The IBC has recommended the establishment of a single insurance policy covering both driver negligence and a vehicle’s automated technology in order to better facilitate these type of liability claims.

A single insurance policy such as this would require the insurer to provide coverage for compensation to a person injured in a collision involving an automated vehicle, regardless of why the collision occurred.

Thereafter, that insurer would be able to take a further step, and recover some or all of that payment from the vehicle manufacturer, the technology provider or some other responsible party.

This second step could proceed through a streamlined dispute resolution process, and the IBC has also recommended establishing a legislated data sharing arrangement between automated vehicle manufacturers, vehicle owners and insurers to help with this process.

Automated vehicles are coming to Ontario, and with them comes great potential. The ideas outlined above, and insurers with forward thinking and innovated approaches to these types of coverages, could perhaps be the solution to some of the insurance problems that have plagued successive governments in Ontario for decades. This very well could be the future of Ontario automobile insurance.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

ICBC’s top tips to help keep kids safe on summer break

With B.C. school children and teens starting their summer break from school this week, ICBC is asking drivers to be especially alert this season, particularly near playgrounds and around youth walking or riding their bikes.

Every year in B.C., five pedestrians aged five to 18 die and 250 are injured in crashes involving a vehicle. A young cyclist dies every year in B.C. and another 120 young cyclists are injured in crashes involving a vehicle.*

Tips for drivers:

  • Playground speed limits are year-round: With longer summer days, drivers should remember that the 30km/hr speed limit is from dawn to dusk, every day.

  • Summer school speed limits are in effect: For schools that hold summer classes, the school zone speed limit of 30 km/hr is in effect from 8 a.m. to 5 p.m. on school days. School zone signs will indicate if a school is holding summer sessions.

  • Wait at crosswalks: Parents and their young children may need more time when crossing the street. Don’t pass any car waiting at a crosswalk as they may be stopped for those crossing the street. Wait for pedestrians to get to the other side of the street before resuming your travel.

  • Slow down on residential streets: Expect the unexpected when children are at play, including the possibility of a teen running to catch an errant ball or a child running out from between parked cars. Slow down and be prepared to stop suddenly.

  • Be patient with younger cyclists: Leave plenty of room between your car and young cyclists, in particular. Shoulder check for cyclists before turning right and watch for oncoming cyclists before turning left.

  • Distracted walkers: Be aware of pedestrians around you, especially for teens who are wearing headphones or using their cell phones while walking, as they not be paying close attention to the road.

Tips for parents:

  • Review safety rules: Review road safety rules with your children and practice how to use crosswalks safely. Set limits to where they can walk alone and where they must be accompanied by an adult.

  • Accompany young children: Children under 10 should always be accompanied by an adult when crossing a street or walking close to the road.

  • Safe outdoor play areas: Establish safe play areas around your home for younger children, such as your backyard. Supervise your children or assign an older child to be in charge. Teach your child that the road is never a safe place to play, even if their toy rolls into the street or a driveway.

  • Demonstrate good walking habits: Practice good walking habits that keep you and your family safe. Teach your child to stand a few steps from the curb while waiting at a crosswalk. Instruct your child to always use a crosswalk, and that jaywalking is never OK.

  • Distracted walking: Remind your teen to be aware of their surroundings when walking. Looking at their cell phone or wearing headphones can prevent them from noticing oncoming cars and other hazards.

  • Cycling safety: Teach safe cycling behaviour to your children such as cycling in a straight line, performing hand signals and shoulder checking. Outfit their bike with a bell, lights and reflective materials. Children should wear bright, reflective clothing so they can be seen in the dark.
  • Head safety: Make wearing a helmet a rule for your child if they want to use their bike, skateboard or rollerblades.

Additional statistics:

Youth pedestrians:

  • Every year, 180 children are injured in crashes in the Lower Mainland.

  • Every year, 33 children are injured in crashes in the Vancouver Island.

  • Every year, 25 children are injured in crashes in the Southern Interior.

  • Every year, 10 children are injured in crashes in the North Central region.

Youth cyclists:

  • Every year, 73 children are injured in crashes in the Lower Mainland.

  • Every year, 22 children are injured in crashes each year on Vancouver Island.

  • Every year, 18 children are injured in crashes in the Southern Interior.

  • Every year, six children are injured in crashes in the North Central region.

*Notes: ICBC crash and injury data used (2011 to 2015). Annual average province-wide. Youth defined as aged five to 18.

** ICBC crash and injury data used (2011to 2015). Annual average per region. Youth defined as aged five to 18.

The fast & the furious: Escalating commuter stress compounding GTA’s road safety crisis

RSA Canada’s TruceTO survey reveals GTA residents feel increasingly unsafe on Toronto’s streets

  • 85 per cent of everyone who walks, cycles or drives agree that road rage continues to be a serious problem (up two per cent from 2018)
  • 51 per cent of cyclists (up three per cent from 2018), 20 per cent of drivers and 19 per cent of pedestrians feel unsafe on the streets of the GTA. Even more telling among cyclists age 18 and older, 57 percent feel unsafe (up 9 per cent from 2018)
  • 36 per cent of drivers, cyclists and pedestrians believe that the city needs to invest more in driver, pedestrian and cyclist education to make our streets safer
  • 56 per cent of GTA residents admit that they are simply not familiar enough with what the city is doing to prioritize road safety

TORONTO, June 5, 2019 /CNW/ – In the city of Toronto, road rage continues to worsen at an unprecedented rate. According to a recent TruceTO survey commissioned by RSA Canada, over 85 per cent of GTA road users who walk, drive or cycle all agree that it’s a serious problem – that’s only getting worse – which is causing a great deal of stress among citizens.

More than 73 per cent of all working adults aged 20 to 64 admit to experiencing stress, and a key source of that stress is commuting. With long commutes come traffic, higher levels of anxiety and less time for other activities. Stress and bad road behaviour are forming a vicious cycle, perpetuating less and less civility on our streets. Road safety is now larger than just a city or infrastructure problem: it’s also a public health issue.

In 2018, the city of Toronto experienced its worst year in terms of the number of injuries and fatalities on the streets: 42 pedestrians and 5 cyclists were killed or seriously injured in a collision with a motor vehicle and 13 drivers were killed or seriously injured due to aggressive or distracted driving.

While there is important work underway at the municipal level with Vision Zero 2.0, a majority of GTA residents admit they are simply not familiar enough with what the city is doing to prioritize road safety. In fact, 51 per cent of cyclists (up three per cent from 2018), 20 per cent of drivers and 19 per cent of pedestrians still feel unsafe on the streets of the GTA. Even more telling among cyclists age 18 and older, 57 percent feel unsafe (up 9 per cent from 2018).

“The street safety issue in our city is not getting any better – it has gotten much worse. The grim numbers in 2019 to-date have proved that,” says Donna Ince, Senior Vice President for Personal Insurance at RSA Canada. “We must all take accountability for the role we’ve played in the deteriorating climate of our streets – and our communities. It’s on all of us to commit to reducing the rage on the streets and put an end to this crisis once and for all.”

Less anxiety and stress on the road helps to support ongoing efforts to make Toronto’s streets safer and enables road users to react in a timely, informed and calm manner. Improvements in road safety overall constitute an important aspect of making our cities healthier.

TruceTO’s goal is to amplify understanding of the important work being carried out by the city, by independent organizations, and at the federal level, and encourage GTA residents to make a personal commitment to change, to play their part in making our streets safer and more civil for all.

Overall, year over year it’s clear – the increasing rate of road rage, lack of education and empathy, and low awareness on the roads remains at the core of the issue.

Additional findings from the TruceTO survey include:

  • Breaking the rules:
    • Drivers (75 per cent), pedestrians (67 per cent) and cyclists (72 per cent) in the GTA all agree that drivers not following the rules constitute one of the greatest causes of distress on the road
  • Whose right of way is it?
    • 53 per cent (up three per cent from 2018) of pedestrians, 49 per cent of drivers, and 40 per cent of cyclists don’t always know when cyclists have the right of way
    • Only 60 per cent of cyclists use hand signals consistently
  • Too close for comfort:
    • 45 per cent of drivers, 44 per cent of pedestrians and 63 per cent of cyclists have been in a collision or know someone who has

The survey also revealed that 84 per cent of respondents claim to have made a major behavioural change in the past few years such as drinking more water (30 per cent) or changing their sleep patterns (25 per cent), but only four per cent indicated a desire to change their road behaviour, even though the latter is a clearly identified source of stress.

“People are willing to change for better physical health but are less likely to feel motivated to change when it comes to improving safety in their community,” adds Ince. “We need to change this mindset, because road safety is closely linked to improvements in overall physical and mental health. As providers of auto insurance, we have a vested interest in the wellbeing of our customers on and off the road.”

Here are a few solutions to help make our streets safer for all:

  • Education
  • Empathy
    • Human error is inevitable, but responding with empathy can prevent unnecessary escalation and perpetuation of bad road behaviour
    • Slowing down, staying focused and keeping emotions in check can all help reduce the number of deaths and serious injuries on GTA’s streets
  • Embracing change
    • Ultimately, there is no doubt that our streets need to be redesigned to properly accommodate drivers, cyclists and pedestrians equally
    • Some of this work is underway, with reduced speed limits, crosswalks and red lights
  • Ease your stress
    • High stress only makes us slower to respond: each of us needs to take action to help improve our overall physical and mental health
    • Just as we hydrate and strive for more sleep, we need to improve our overall health by addressing the stress we feel when commuting – through education and empathy

To learn more about TruceTO, test your road safety knowledge and take the pledge to be a better road user, visit www.truceto.com. TruceTO aligns with RSA’s ambition of Making Life Better Together and supports its Corporate Responsibility Safe, Secure World pillar, which focuses on safeguarding their customers from everyday risks. To learn more about RSA Canada’s corporate social responsibility, visit https://www.rsagroup.ca/about-us/corporate-responsibility/our-corporate-responsibility-journey.

About the 2019 TruceTO survey:
TripleScoop Premium Market Research is an independent full-service research agency with deep roots in the pioneering development of online research methods. An online survey of 1,305 Canadians who are 16 years or older, live and/or work in the Greater Toronto Area and regularly use the city streets as pedestrians, cyclists and/or drivers, was completed between May 3-15, 2019, using AskingCanadians’ online panel. AskingCanadians’ online panel has more than one million members nationally, the leading online data collection firm in Canada, and the first one to implement TrueSample for powerful identity validation, de-duplication and engagement modeling that ensures survey respondents are real, unique and engaged. A probability sample of the same size would yield a margin of error of +/- 2.7%, 19 times out of 20.

About RSA:
With a 300-year heritage, RSA is a multinational quoted insurance group. Focusing on general insurance, RSA’s core markets are the UK & Ireland, Scandinavia and Canada, with the capability to write insurance business across the globe.  RSA’s core businesses have approximately 13,500 employees with net written premiums of £6.3bn in 2016.

About RSA Canada:
The RSA Canada group of companies includes Roins Financial Services Limited, Royal & Sun Alliance Insurance Company of Canada, Quebec Assurance Company, Johnson Inc., Unifund Assurance Company, Western Assurance Company, Ascentus Insurance Ltd., Canadian Northern Shield Insurance Company and RSA Travel Insurance Inc. (collectively, “RSA Canada”) and is part of a group of companies headed by RSA Insurance Group Plc. RSA Canada employs more than 3,000 people across Canada and is one of the oldest insurance companies in the country with roots dating back to 1833.
©2016 Royal & Sun Alliance Insurance Company of Canada. All rights reserved. RSA, RSA & Design and related words and logos are trademarks and the property of RSA Insurance Group plc, licensed for use by Royal & Sun Alliance Insurance Company of Canada. RSA is a trade name of Royal & Sun Alliance Insurance Company of Canada.

SOURCE RSA Canada

Ignoring Your Own Safety #DriveSmartBC

 

SeatbeltWhen I learned to drive more than 4 decades ago, seatbelts were becoming standard equipment on all vehicles. Fast forward to today and we have seatbelts, multiple airbags and a host of automatic systems designed to either avoid a crash or minimize the damage to us if we are in one. Why then do some of us ignore the systems that are there for our protection?

A decade ago seatbelt use rates were about 97% for drivers of cars or light trucks in B.C. according to Transport Canada. That said, one does not have to sit for very long today watching traffic pass in urban areas to find drivers who do not buckle up. Why ignore what is probably the simplest and most effective device in your vehicle that helps you avoid injury?

Have you read your vehicle’s owners manual to learn about airbags and how they protect you in a collision? If you have you will realize that you must wear your seatbelt to avoid injury caused by being out of place if it deploys. You must also sit upright in your seat when the vehicle is being driven.

Yesterday I was filling my fuel tank and watching the passenger in the vehicle beside me. She had her feet up on the dash and remained that way when her friend finished fueling and drove away. I shudder to think of what would happen to her if that airbag deployed.

If you buy a new vehicle today you will find that it can be equipped with many safety systems such as automatic emergency braking and lane departure warning. Remember that owners manual? There will be some study required to learn how they work, how you should use them and when they cannot protect you.

The sensors for these systems require regular maintenance by the driver to keep them functional. Be sure to read your owners manual or at least have the dealership demonstrate what needs to be done before you drive off the lot.

Vehicle computers store data about faults. If fault codes are stored for malfunctioning safety systems it is conceivable that you could bear some responsibility for injuries sustained in a crash. Ignoring these new safety systems could also place you in a bad position post-collision.

Ignoring your own safety as a driver today may have many unintended consequences that can also extend to your passengers. RTFM (Refer to Factory Manual) might be the smartest (and safest) thing that you can do!

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