PUB ruling means $58 million rebate plus lower rates for most
For the second time in five years, Manitobans will receive an Autopac rebate after the Public Utilities Board ordered a one-time dividend equalling 10 per cent of the premium they paid last year.
In its decision today, PUB ruled that Manitoba Public Insurance will rebate $58 million or $75 to $80 for the average passenger vehicle owner. In 2001, Manitoba Public Insurance paid out a 16.6 per cent rebate providing Manitoba vehicle owners with a cash payout of $80 million.
�While most insurance companies continue to levy rate increases, Manitoba Public Insurance has provided nearly a decade of rate stability and about $140 million in direct payments to Manitoba vehicle owners in the form of dividend payments,� said Marilyn McLaren, President and Chief Executive Officer of Manitoba Public Insurance.
For three out of five Manitobans, today�s ruling will provide a double bonus. As early as March 2006, all current vehicle owners will receive a refund cheque in the mail. Then, when Manitobans renew their insurance throughout the 2006/07 year, 58 per cent will pay less under the rates approved by the PUB.
Overall, 526,815 vehicle owners or 62 per cent will see their premiums decrease or stay the same starting March 1, 2006. Because of staggered renewal dates, some vehicle owners will not pay the new rates until February 2007. The PUB ruled:
Premiums will go down for 57.55 per cent of vehicle owners (490,303 vehicles).
Premiums will remain unchanged for 4.3 per cent of vehicle owners (36,512 vehicles).
Premiums will increase for 38 per cent of vehicle owners (325,084 vehicles). For about 87 per cent or 283,115 of these vehicle owners, the increase will be less than $50.
Strong investment income, lower claims costs and strength in the corporation�s competitive lines of business paved the way for the one-time dividend, McLaren said.
�This payment to Manitobans can be made without putting the corporation�s financial strength at risk because our investment strategy has been so successful,� McLaren said. �The corporation has consistently had better returns than most Property and Casualty insurers in the country.
�One of the real benefits of the public insurance model is that premium payers directly benefit from investment income in the form of lower rates and in this case dividends.�
The rebate will be funded by the corporation�s Rate Stabilization Reserve, which is designed to cushion Autopac rates from unexpected cost fluctuations, and will therefore have no impact on the corporation�s future revenues.
Motorcycle rate increases have been held to an average of five per cent, compared to the 12.7 per cent average rate increase requested by the corporation.
The PUB ruling endorses current corporate initiatives such as the anti-theft immobilizer incentive program, the merger of driver and vehicle licencing functions and a number of operational reviews now underway.
�We pleased to see this validation of where the corporation is heading,� McLaren said.�
About MPIC: Manitoba Public Insurance is a nonprofit Crown Corporation that has provided basic automobile coverage since 1971. More information at http://www.mpi.mb.ca.