MPI requesting 1.2 per cent decrease, $335M rebate to customers
Manitoba Public Insurance (MPI) is requesting a 1.2 per cent rate decrease and $335 million rebate for customers at its general rate application hearing before the Public Utilities Board (PUB) on Tuesday. However, one consumer group says it doesn’t mean people will be paying less for their car insurance.
MPI said that in its general rate application it removed the capital release provision, which had previously translated into a five per cent discount as part of the overall rate. To replace this discount, MPI said it has separately applied to the PUB to give back excess capital to ratepayers through a rebate.
The Crown corporation said it has updated its rebate application and formalized its rebate request to $335 million, According to MPI, if this is approved, it will be the second largest rebate in its history.
“MPI continues to demonstrate strong financial performance, which has resulted in its applying for a third consecutive rate decrease, and in time, applying for a third consecutive customer rebate,” said Crown Services Minister Jeff Wharton in a news release.
“The COVID-19 pandemic has been challenging for all Manitobans. I am pleased that Manitoba Public Insurance will once again be in a position to provide its policyholders with much needed financial relief early in the New Year.”
The Consumers’ Association of Canada (CAC) said that MPI over-collected premiums and the rebate should be higher. Instead, it said, MPI wants to transfer some of the surplus to cover costs that are the government’s responsibility.
The CAC noted that with MPI’s proposal to remove the five per cent discount, combined with its rate request of a 1.2 per cent decrease, it actually results in a 3.8 per cent increase.
If MPI’s general rate application is approved, the proposed rate would be effective April 1, 2022. However, because renewal dates are staggered, some vehicle owners won’t pay their new rates until March 31, 2023.
The rebate cheques will be mailed out in the winter of 2022. MPI will announce the average cheque amount and how many cheques will be mailed in the coming months.
The PUB hearing began on Tuesday and is scheduled for three weeks. The board is expected to announce its ruling in December.