Manitoba Public Insurance to Issue Rebate Cheques to Policyholders

Manitoba Public Insurance (MPI) is returning up to $110 million to provide financial relief to its policyholders, Crown Services Minister Jeff Wharton announced.

“Many Manitobans have been financially impacted by this crisis,” said Wharton. “MPI is proactively providing relief when it is needed most by issuing rebates to its customers as an alternative to future reduced premiums.”

Rebates will be based on what policyholders paid last year and expected to be around 11 per cent, or between $140 to $160, per average policyholder, the minister noted, adding policyholders can expect a rebate cheque at the end of May to early June.

This surplus is the result of fewer claims during this COVID period, coupled with strong year-end financial results. As a public insurance model, MPI operates on a break-even basis and is required to maintain its reserves at a level set by legislation. Today’s rebate is possible because MPI’s reserves are exceptionally strong, allowing excess capital to be returned to ratepayers while ensuring its reserves are fully funded.

“This money is expected to provide financial assistance to Manitobans during this unprecedented crisis,” said Ben Graham, president and CEO, MPI. “We have made significant improvements in our operations to deliver value to Manitobans resulting in stronger financial results.

“With a healthy reserve fund, MPI is in a strong financial situation to move forward with these rebate cheques to support our customers. This rebate to our customers will not adversely impact the corporation’s financial outcomes moving forward. It feels right to give back to our customers when they need it the most.”

Details of the rebates will be made in the coming weeks and further details will be available at mpi.mb.ca.

In addition to rebating excess capital from the last financial year, MPI notes that as of mid-April, collision claims are down 48 per cent compared to the same month a year ago. MPI estimates that public health orders directing the public to stay at home and for non-essential businesses to cease direct interaction with the public have resulted in approximately $29 million in fewer basic claims being incurred between March 15 and April 15, 2020.

Under existing legislation, MPI is able to return approximately $50 million to its ratepayers and will require the approval of the Public Utilities Board (PUB) for the additional $60 million. MPI will apply to the PUB in the coming days in respect of the incremental $60 million in order to be able to return these amounts to Manitoba ratepayers. If PUB approval is obtained in the next few weeks, the entire $110 million will be returned as part of the rebate cheques mailed to Manitobans.

Based on current projections, MPI is confident that due to the extension of public health orders and the provincial state of emergency extending until May 18, related savings to the corporation will continue into the foreseeable future.

To help Manitobans impacted by COVID-19, we’ll be mailing policyholders’ rebate cheques in May.

Air Canada seeks to raise more than $1B to boost cash position amid COVID 19

MONTREAL _ Air Canada is hoping to raise more than $1 billion in share and debt offerings to bolster its cash position amid the financial devastation of the COVID-19 pandemic.

The airline says it has launched a public offering for about $500 million worth of Class A and Class B voting shares.

It has also started a private placement of unsecured convertible notes _ a debt security that allows the owner to convert it into a shares _ for a total of US$400 million, or about C$550 million.

The stock and debt offerings include an over-allotment allowing the underwriters to buy an additional 15 per cent of the shares or convertible notes.

Air Canada says the net proceeds will bolster its cash position and provide it greater “flexibility” to manage the impact of the health crisis.

The airline said on May 4 that it had $6.5 billion in unrestricted liquidity after drawing about $1 billion in March from its revolving credit facilities.

The carrier lost more than $1 billion last quarter and grounded the vast majority of its fleet as travel demand stays at near rock-bottom levels while fixed costs persist, including aircraft leases, insurance and maintenance and hangar fees.

Completion of the offerings will be subject to various conditions, including approval from the Toronto Stock Exchange.

TD Securities Inc., J.P. Morgan Securities Canada Inc. and Citigroup Glob

What insurers do – and don’t – owe restaurants during COVID-19

The excerpted article was written by Corey Mintz

Buying insurance is placing a bet you’d rather not have to collect on. It’s hoping for the best but planning for the worst. We pay monthly fees to a company just in case something terrible happens. If it does, the company agrees to cover our financial loss. Then COVID-19 hit, and something terrible happened to all of us.

In the past two months, the issue of insurance has come up repeatedly for restaurateurs, who pay for a specific type called business interruption. It can cover closure due to such events as municipal construction, burst water pipes, and riots. I spoke with two restaurateurs who have successfully claimed coverage after broken pipes forced their closure, in one case for five days and in the other for four months (although she is still waiting on a cheque). Neither has attempted to file a claim based on the pandemic. Most believe, or have been told, that the widespread shutdown of restaurants is not covered under interruption insurance.

Then I spoke with Hemant Bhagwani. The founder of the Amaya restaurant chain, plus a few other dining concepts, he has 29 restaurants in Ontario and more than 600 employees.

Bhagwani is availing himself of the Canada Emergency Wage Subsidy, which covers 75 per cent of payroll and requires employers to take care of the rest. Most of his restaurants are shuttered. A couple are doing takeout. And while he says some of his landlords are being reasonable (and currently exploring the possibility of the Canada Emergency Commercial Rent Assistance for small businesses), the total rent for these properties is about $700,000 a month.

“In 22 years of business, I have not taken a single penny from the insurance companies,” Bhagwani told me on April 24, just as the federal government was announcing the CECRA. “They keep increasing their premiums every year. So this is the time for them to support us a little bit. And they’re just washing their hands.”

“Government is doing so much,” said Bhagwani, as we both paused to listen to the prime minister’s live address. “Landlords are trying their best to help us. The only people who are not coming out are the insurance companies. I feel it’s very wrong. I’m ready to take them to court.”

On May 5, Bhagwani followed through, filing a claim for damages against his insurer, Allianz Global Risk, for $500,000 in combined revenues, $200,000 in punitive damages, and 90-days’ worth of payroll expenses.

“I think he’s wise to bring the action,” says Lawrence Swartz, a professor at Osgoode Hall Law School.

“It’s very rare that people claim insurance. Typically, you pay the premiums, and you don’t make a claim,” says Swartz, who has worked extensively in the financial and insurance sectors. “The reason you buy insurance is to get the coverage for these types of situations. Your typical person who is a restaurateur should think that an interruption includes a pandemic.”

A spokesperson for Allianz told TVO.org via email that the company is “unable to comment on individual claims settlements or pending legal matters” and that, as a result of the pandemic, it “has been notified of a large volume of claims from businesses around the world which we evaluate on a case by case basis to determine coverage.” They added, “We will certainly honor COVID-19-related claims where they are part of our policies and cover is clear. However, many businesses will not have purchased cover that will enable them to claim on their insurance for COVID-19 pandemic losses.”

Swartz can’t speak to the specific merits of Bhagwani’s case without examining his policy. But, in general, he sees the court leaning in favour of the restaurateur.

“If the company wanted to exclude a pandemic, they have to say so in the insurance contract. And if they didn’t, the presumption I think, by the courts, would be that the restaurant should be covered,” he says. “Because courts tend to interpret exclusions narrowly, they give somewhat of a benefit of the doubt to the purchaser of the insurance policy. And they tend to interpret coverage broadly.”

Another factor on Bhagwani’s side, Swartz says, is a legal principle that tends to apply in the case of insurance contracts. Known as contra proferentem, it means that, when the intention is ambiguous, the preferred meaning is the one that works in favour of the party that didn’t draft the contract.

Whatever happens with Bhagwani, Swartz sees this lawsuit as a good example for others in the industry to follow. “Every restaurant should presume that they have coverage,” he says. “This is a situation where they need help. And that’s what insurance is for. It’s for unforeseen disasters.”

Swartz urges owners to contact their lawyer or insurance broker, to look at their contracts to see whether the policy specifically excludes a pandemic, and to ask for claim forms.

“Restaurant owners should be in touch with their insurers and brokers. They should be asserting their rights,” he says. “They should assume that they have coverage, and they should proceed as if they do. It should be on the insurers to explain to them that they don’t if they don’t and to be very specific in why they don’t. Insurance companies shouldn’t be trying to wiggle out of their responsibilities.”

If a court rules in favour of Bhagwani, other suits will likely follow. What would that mean for the insurance industry? The business is predicated on the odds that disasters don’t usually happen every day and to everyone at once. If every restaurant in Canada claims interruption insurance, and the courts support them, could this bankrupt insurers?

“The insurance industry, going into this, was fairly strong,” explains Swartz. Insurance companies are sometimes part of big conglomerates that back them up, and they cede part of their risk to reinsurance companies. “So insurers have insurance themselves.”

However, that doesn’t mean that they’re bulletproof.

“This is a cataclysmic even,” Swartz says. “It wouldn’t be impossible for a number of insurance companies to go bankrupt.”

Corey Mintz is a Toronto-based food writer.

Source: tvo.org

 

IBC Collaboration with York Regional Police Leads to Charges

TORONTOMay 26, 2020 /CNW/ – Today, investigators with the York Regional Police Organized Crime and Intelligence Services laid charges related to organized-crime for violent  property damage, fraud and drug trafficking, as part of an ongoing joint-forces investigation into the tow truck industry, known as Project Platinum.  Insurance Bureau of Canada (IBC) is proud to assist and support this ongoing investigation.

“IBC applauds the efforts of all partners involved in this joint-forces investigation, Project Platinum, that resulted in criminal charges being laid,” said Bryan Gast, National Director, Investigative Services, IBC. “Insurance fraud is a safety issue for consumers.  Lives can be put at risk as a result of these criminal actions. Insurance fraud costs Canadians in added insurance premiums, and strains our already burdened health care, emergency services and court systems.”

This ongoing investigation has identified several organized crime groups working within the towing industry who have used violence and property damage to gain control and territory within the industry. A number of towing companies have been involved in defrauding insurance companies, using vehicles involved in collisions and staged collisions. These towing companies partnered with auto repair shops, physiotherapy clinics, as well as car and truck rental companies, to carry out this fraud.

Insurance companies, through the auto insurance industry’s dedicated Investigation Coordination and Support Service (consisting of nine Insurer Lead Investigators, each from an IBC member company), worked to mitigate the costs of this fraud, including additional costs to the consumer, and actively pursued legal action against various towing companies.

For more information on the investigation, visit York Regional Police.

IBC and its members work tirelessly to mitigate the risk and cost of insurance fraud. Insurance companies pursue legal action against towing companies that are committing fraud.

IBC wants to help consumers avoid falling victim to insurance fraud. The more people report fraud, the more fraudsters we can bring to justice.

Know Your Tow

If you’ve been in a collision:

  1. Call your insurance representative as soon as possible to report the collision. They can provide helpful, on-the-spot advice on towing options, as well as recommendations of repair and car rental companies.
  2. You have the right to decide who can tow your vehicle and to what location (unless otherwise directed by police).
  3. A permission-to-tow form must be signed, and the towing company must provide an itemized invoice before receiving payment and towing your vehicle.
  4. You are entitled to a receipt for towing services rendered, and you have the option to pay with a debit or credit card.
  5. Decline offers to store your vehicle in a compound yard unless directed by your insurance representative to do so.

Never sign a blank contract or take referrals from towing companies.

For more information, visit Know Your Tow.

If You Suspect Insurance Fraud

In addition to contacting your insurer, you may also:

About Insurance Bureau of Canada
Insurance Bureau of Canada (IBC) is the national industry association representing Canada’s private home, auto and business insurers. Its member companies make up 90% of the property and casualty (P&C) insurance market in Canada. For more than 50 years, IBC has worked with governments across the country to help make affordable home, auto and business insurance available for all Canadians. IBC supports the vision of consumers and governments trusting, valuing and supporting the private P&C insurance industry. It champions key issues and helps educate consumers on how best to protect their homes, cars, businesses and properties.

P&C insurance touches the lives of nearly every Canadian and plays a critical role in keeping businesses safe and the Canadian economy strong. It employs more than 128,000 Canadians, pays over $9 billion in taxes and has a total premium base of $59.6 billion.

For media releases and more information, visit IBC’s Media Centre at www.ibc.ca. Follow us on Twitter @IBC_Ontario or like us on Facebook. If you have a question about home, auto or business insurance, contact IBC’s Consumer Information Centre at 1-844-2ask-IBC.

SOURCE Insurance Bureau of Canada

www.ibc.ca

Airlines are searching for ways to get Canadians travelling again

Melissa Lopez-Martinez CTVNews.ca 

TORONTO — As lockdown restrictions are slowly lifted around the world, the travel industry is looking at ways to get Canadians back on board.

While airlines, hotels and cruise ships are eager to open their doors, experts say convincing Canadians to travel again will be a tough sell.

Incentives are being introduced by airlines, resorts and hotels as a way to bring aboard new passengers, according to Allison Wallace, vice-president of communications at Flight Centre Canada.

“We should see better pricing and if not better pricing better value and that can be a room upgrade, it could be resort credits, it could be on board credits for cruise ships,” Wallace told CTV News.

Air Canada recently announced revisions to their goodwill policy that will allow customers of cancelled flights due to COVID-19 the option to receive either a travel voucher with no expiry date or bonus Aeroplan miles.

The airline also promised to reduce airfare for domestic flights as it introduced its new summer schedule including domestic and international flights. However, the airline is on a long road to recovery as it has been down 97 flights from the 220 it had the previous year amid the pandemic.

Tamer Hanna is among the many Canadians who had a flight cancelled because of the novel coronavirus. Hanna’s $5,000 Italian trip was put on hold and he received a credit for the flight but said he wants a refund.

“The travel situation is not going to be the same and its really about the safety of myself and my family at this point,” Hanna said in an interview with CTV News.

Many airlines are also catering to the post-pandemic world by introducing new cleaning measures and reconfigured seating. While these measures can help ensure safer travel, McGill University business professor Karl Moore said they will likely cost more for businesses to stay afloat.

“When you take away the middle seat at best you can get the planes maybe 70 per cent full, but at 70 per cent the planes can’t make money and that’s not a viable business model for them,” Moore in an interview with CTV News.

Travel experts say the new travel incentives are enticing, but the risk remains high. With COVID-19 now a known risk, companies are no longer offering travel insurance to cover the cost if Canadians become ill abroad.

President of Travel Secure Inc. Martin Firestone told CTV News that with no coverage, travellers risk incurring high hospital costs if they catch the virus while travelling.

“Quite frankly if you’re away and that second bout or third bout they talk about hits, you have the dilemma of having no coverage and being stuck in an emergency room in a hospital and you’re paying the tab,” Firestone said.

Industry leaders said travel interest is slowly picking up again, with most Canadians interested in domestic trips.

CTV News 

 

Guns, drugs, cash seized in organized crime probe of Toronto area tow truck industry

By Liam Casey

THE CANADIAN PRESS

VAUGHAN, Ont. _ Four alleged organized criminal organizations that operated as rival tow truck companies involved in a violent battle for territory in the Toronto area have been dismantled, police said Tuesday.

York regional police said the alleged crimes involved real collisions with jacked-up fees to drivers, staged collisions and extensive insurance fraud.

The turf war on two lucrative highways has led to murders, attempted murders, assaults, arsons and property damage, said Supt. Mike Slack of the force’s organized crime and intelligence services.

“Organized crime begins with an opportunity to make money and a level of greed that leads to criminality and violence,” Slack said in a video statement.

“The towing industry and its lack of regulations have bred exactly that environment.”

York police worked with their Toronto counterparts, Ontario Provincial Police and the Canada Revenue Agency on the investigation, dubbed Project Platinum, that began in February.

After raids and the execution of numerous search warrants, police arrested 20 people who collectively face dozens of counts, including criminal organization related charges, drug-trafficking charges and firearm offences among others.

During the raids, police seized 40 guns, including handguns, shotguns, rifles and a machine gun. Police also seized five kilograms of the deadly opioid fentanyl, 1.5 kilograms of cocaine, 1.25 kilograms of crystal methamphetamine and 1.5 kilograms of cannabis.

Police also seized more than $500,000 cash.

The investigative team also worked with the force’s homicide squad that laid murder charges in March against two men with ties to the towing industry for the death of a man who worked in the same industry.

Slack said the alleged criminal organizations are relatively new and have earned millions of dollars in illicit income.

“And when these profits were not enough, they staged collisions using drivers they recruited they deliberately caused collisions in roadways and parking lots across the GTA,” Slack said.

Police allege Paramount Towing along with other towing companies have been defrauding insurance companies with vehicles involved in collisions and staged collisions.

Slack said the companies would grossly inflate towing bills, move cars from lot to lot to increase storage fees, inflate repair bills and involve physiotherapists, much of it in an effort to defraud insurance companies.

Body shops and car rental companies were in on the schemes, Slack said, and would receive  “profitable cuts for themselves.”

Insurance companies grew wise to the alleged frauds, Slack said, which then hired Carr Law, a firm in Vaughan, Ont., to investigate.

“It too became the target of violence, threats and extortion,” Slack said.

Last fall an employee was threatened by an armed man and shortly thereafter someone fired bullets into the firm’s office, police said.

Slack said investigators also found a cache of computer records that will aid in the prosecution of those charged.

He alleges Paramount Towing, which is owned and operated by Alexander Vinogradsky, controlled a vast territory that included Highways 401, 404 and 400.

Slack said police have made recommendations to the province to implement regulations in the towing industry, including contract towing.

“York regional police has yearly contracts that we sign that we identify trucks we can use at our collisions,” he said. “We do think that has a great effect and something we recommend in all jurisdictions.”

This report by The Canadian Press was first published May 26, 2020.

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