Canadian Underwriter

Insurer ordered to plan for switch to primary driver model

November 9, 2022   by Alyssa DiSabatino

A man holding a pen sits in front of a clipboard with an insurance policy and three toy cars lined up atop it.

Print this page Share

Manitoba Public Insurance (MPI) must now develop a five-year plan to switch from its registered driver model to a primary driver model for auto insurance pricing — after previously stating such a switch would create large rate dislocation and require significant regulatory and IT changes. The change comes upon MPI losing a lawsuit against its regulator, the Manitoba Public Utilities Board (PUB). 

Manitoba’s Court of Appeal rejected MPI’s request to appeal PUBs order to develop — and eventually implement — a five-year plan for the transition from its current registered owner model to a primary driver model. 

In recent years, MPI and PUB have discussed whether rates should be based on the risks of a primary driver of the vehicle (i.e., the primary driver model) rather than on those of the vehicle’s registered owner (i.e., the registered owner model).

A primary driver model would require Manitobans pay their auto insurance based on the primary driver’s history, rather than the vehicle’s registered owner.  

MPI said it intends to keep using its registered owner model and won’t consider changes to its model for the next five years. It added any changes to its model would create “large rate dislocation and require significant regulatory changes, as well as significant information technology (IT) changes,” according to the Judge of Appeal’s decision. 

However, PUB ordered a directive for MPI to develop a five-year plan to transition from its current registered owner model to the primary driver model. PUB also said MPI had failed to comply with several previous directives. 

MPI filed a motion seeking to appeal the order on the grounds that PUB exceeded its jurisdiction and cannot direct MPI to disregard its current rate scheme in favour of a new model. MPI argued PUBs directive was “not simply an information-seeking directive but, rather, a mandatory order which goes beyond the jurisdiction of the PUB.” 

MPI also raised a number of objections to the primary driver model, including the possibility of privacy concerns if required to obtain the identities and driving records of the primary drivers. 

However, the court sided with PUB and determined the directive was, in fact, an information-seeking directive rather than a mandatory order. 

“However, even if I were to accept [MPI’s] argument that [the Directive] was not a directive simply seeking information but, rather, a directive requiring MPIC to make the change, I find that it is within the PUB’s jurisdiction to do so. 

“There is no doubt, given the history of this matter, that the PUB strongly favours the change to a primary driver model. But that is not to say that, given the receipt of information it has requested, the change is a foregone conclusion,” the court decided.  

“The directive asks that a plan be developed, and a foundation laid in the event it wishes to consider a potential change at a later time. It does not order the change at this point in time. Given the receipt of the information desired, it may decide not to order the change.” 


Feature image by