December 5, 2017 by The Canadian Press
The Manitoba Public Utilities Board is giving a green light to rate increases for basic compulsory vehicle premiums, and is also recommending the government allow it to regulate non-compulsory auto insurance as well.
The board says in a decision released Monday that Crown-owned Manitoba Public Insurance can hike its overall general rate by 2.6%, effective March 1.
But the board says it’s an overall change and doesn’t mean everyone’s rate will go up.
It says the rates for individual policyholders will still be based on their driving record, the make and model of the vehicle, along with where and what the vehicle is used for.
The record of claims will still be a factor, too.
The board says in the decision that since MPI also has a de facto monopoly over non-compulsory insurance, the government should extend the board’s jurisdiction to give it the same powers over the insurer’s Extension line of business.
Since 2008, the board states, MPI’s non-compulsory Extension coverage has never held less than 95% of the market on competitive lines of automobile insurance business.
“In the case of Basic, regulation is a proxy for competition. In the absence of evidence that there is any real competition to Extension, it necessarily follows that there should be regulation of Extension,” the order states.
In addition to allowing overall compulsory premiums to rise, the board has approved a 1.8% increase to the demerit scale for driver premiums.
Moving up the scale usually results in lower premiums, MPI says on its website, while moving down the scale usually means higher premiums.
“The Board recognizes the importance of providing incentives to improve poor driving behaviour and the need for the public to have confidence that riskier drivers are paying more for their driver premiums than are safe drivers,” the board stated in its decision to allow the increase.
This story was originally published by Canadian Insurance Top Broker.