New broker agreement supports plan to improve efficiency and convenience: MPIC

September 23 , 2008 – Independent brokers and Manitoba Public Insurance have entered into a historic accord for a new compensation model that will support a more convenient renewal process and new product offerings for customers in the future.

President and Chief Executive Officer Marilyn McLaren said the new compensation plan accommodates future business changes, while ensuring a strong and viable future for the 300-plus insurance brokers distributing products and services on its behalf.

“Since 2006, we’ve made significant changes to the way we deliver service, most notably the move to offer driver’s licence renewal services through all Manitoba brokers,” McLaren said.

Both Insurance Brokers Association of Manitoba (IBAM) CEO Dave Schioler and McLaren agree that, “More improvements are on the horizon, and as always, brokers will play an integral role. To make the most of these changes, we need a compensation model that equally supports the needs of brokers and customers.”

The Insurance Brokers Association of Manitoba (IBAM) worked with Manitoba Public Insurance to jointly arrive at a new compensation model.

“It was a groundbreaking moment in our relationship,” said Schioler. IBAM President Wade Garriock added that, “Never before have we as independent brokers had such direct involvement in shaping the way we work with Manitoba Public Insurance. As a result, we’ve arrived at a system that works better for everyone, including our customers.”

Manitoba Public Insurance plans to pass on any savings directly to motorists in future applications for Basic Autopac rates to the Public Utilities Board.

Schioler said brokers are happy with the new arrangement because it offers them a number of advantages:

  • The gradual decrease in commissions for Basic Autopac sales will be offset by an immediate increase in commissions for sales of optional coverage, retroactive to June.
  • Flat fees paid to brokers for other types of transactions will increase, and all flat fees will be indexed to the Consumer Price Index. A flat fee on new driver’s licence applications will be paid until 2013.
  • Compensation for driver’s licence insurance will be based on a percentage of written premium, rather than a flat fee.

The new model was ratified by IBAM members this summer and recently approved by the Manitoba government.

“I’m pleased to see such great co-operation with independent insurance brokers,” said Dave Chomiak, justice minister and minister responsible for Manitoba Public Insurance. “Independent insurance brokers play an essential role in the delivery of public auto insurance and driver licensing services. Without their partnership, it would not be possible to provide all Manitobans with such convenient access to service and sound advice.”

McLaren said the new compensation model was partly necessitated by plans to streamline the renewal process for driver’s licences and auto insurance. In the fall of 2009, Manitoba Public Insurance will introduce a new system that will require customers to visit a broker only once every five years, provided they are paying through automatic debits from their credit cards or chequing accounts.

“Customers will still be able to seek advice from a broker as often as they choose � but if they are making time payments and aren’t making any changes to their coverage, they won’t have to visit a broker every year. They can just let their payments continue.”

The compensation model also accommodates new product and service offerings � including Manitoba’s new Enhanced Identity Card, a passport alternative for driving to the U.S., which Manitoba Public Insurance plans to launch later this year.

“Today we have a stronger plan in place to support these improvements and the viability of the broker network,” McLaren said.

Manitoba Public Insurance is a non-profit Crown Corporation that has provided basic automobile coverage since 1971. Our services are available throughout Manitoba in claim centres and Customer Service centres.