MPI told to reduce auto insurance premiums by 8 percent
Manitoba’s Public Utilities Board (PUB) has ordered the provincial auto insurer to reduce overall insurance premiums by eight percent for the 2012-2013 insurance year.
Manitoba Public Insurance’s (MPI) requests to (a) increase drivers’ licence premiums for Driver Safety Rating (DSR) demerit levels -2 to -20 to a maximum of $2,000; (b) ensure there be no change in service, transaction, permit and certificate fees; and, (c) ensure there be changes to the fleet rebate scale where approved by the PUB, but the regulator said it “expresses concern over MPI’s operating cost increases and certain factors that affect the fairness of premiums for Basic ratepayers, seeks more transparency with respect to the Corporation’s overall operations, and directs an increased focus on road safety (calling for a conference to identify and review potential road safety measures).”
In June, MPI proposed a 6.8 percent rate decrease for the 2012-2013 insurance year. In its order, the PUB said “a higher rate decrease than sought by MPI is warranted and, accordingly, will approve an 8% decrease in rates. The Board holds the view that MPI has not demonstrated sufficient cost control measures and, by providing a larger decrease than that sought by MPI, hopes to instil some fiscal discipline in MPI’s operations (which should extend to its planned IT optimization project). The Board also suspects an undue level of “conservatism” may remain within MPI’s actuarial evaluation, further warranting the higher than proposed rate decrease.”
A copy of Order 162/11, published on the regulator’s website on December 2, can be read online. (PDF)
