Saskatchewan Rate Review Panel recommends average Auto Fund rate hike of 0.6%

The Saskatchewan Rate Review Panel has recommended an overall average increase of 0.6% to Saskatchewan Auto Fund rates, effective Aug. 4, 2012.

The panel is also recommending a temporary, two-year overall average rate surcharge of 1% to help replenish the Auto Fund’s Rate Stabilization Reserve (RSR).

Saskatchewan Government Insurance’s (SGI) Auto Fund had proposed an overall average rate increase of 3.7%.

“It’s a matter of an appropriate balance,” says panel chair Kathy Weber. “Thorough public consultations, plus detailed study and advice from our technical experts, led us to recommend what we believe is a balance that provides sufficient resources for the company and appropriate rates for consumers.”

The recommendation proposes that the 1% rate surcharge would be applied annually over a two-year period and identified separately on customer billings and in the Auto Fund’s internal accounting. The purpose of the RSR is to protect the Auto Fund’s customers from large rate changes caused by such things as severe weather conditions or adverse financial events.

During its review, the panel learned the level of funds in the reserve is at or near the lower end of its target range. Evidence is strong that it will fall below that level, the panel reported.

It makes several other recommendations, including support for the Auto Fund’s objective to achieve rating fairness through further rate rebalancing in future rate applications.

The panel has submitted its report to the minister responsible for the Crown Investments Corporation, and is making the report available to the public on the panel’s website at: http://bit.ly/saskrr12

The provincial cabinet will make the final decision on the rate application.