MPI took PUB, which is tasked with setting rates that are fair and reasonable, to court over a directive given by the public utilities board to adopt the basic driver model instead of the current registered owner model. Currently, when a driver in Manitoba pays for vehicle insurance, their price and any discounts are based on the driving history of the registered owner of the vehicle, regardless of who is driving it. PUB wanted MPI to prepare to change its system to a master driver model. This would mean Manitobans would pay their vehicle insurance rates based on the history of the primary driver instead of the registered owner. The change could bring significant savings to mainstream drivers who have a clean driving record in the province and score high on the driver safety rating scale, while the opposite would apply to red drivers. Drivers at the top of MPI’s safety rating scale can save up to 37 per cent on their annual insurance, while those with previous offenses or claims could see no savings. The difference translates into potentially hundreds of dollars in additional vehicle insurance fees.
Account for real drivers: interveners
The Manitoba Coalition of Motorcycle Groups supported the change and intervened in the case arguing that the current system is not fair. “It will never account for the people who are actually driving the vehicle, and the people who are driving the vehicle are the people who are causing accidents on the road,” coalition attorney Charlotte Meek said in an interview. “This is an issue for all raters. Good drivers subsidize bad drivers.” The Freda Steel Court of Appeal rejected the insurer’s request to appeal the PUB’s directive that MPI develop a five-year plan for the final implementation of the basic driver model. “The challenge to PUB’s jurisdiction over the methodology governing the DSR [driver safety rating] system has no reasonable prospect of success,” Steel wrote in an Oct. 19 decision. Steel’s decision said only Manitoba, Saskatchewan and BC assess risk and premiums using the registered owner model, while private North American insurers use the primary driver model.
MPI wasn’t planning an immediate change
Earlier this year, MPI said it planned to continue using the current model and would not make any changes for the next five years. “It considered that any significant change to this model would create a large rate shift and require significant regulatory changes, as well as significant information technology (IT) changes,” Steel’s decision states. The PUB said MPI failed to obey several previous instructions it gave the Crown company. “When the [PUB] issues instructions [MPI] may choose to file a dissent or seek leave to appeal from the Manitoba Court of Appeal. [MPI] it cannot simply refuse or disobey the directive,” PUB said. MPI filed an appeal against the PUB’s directive arguing that it was not merely a search for information, but rather a mandatory order beyond the jurisdiction of the utility board. Steel found that the proposed ground of appeal did not warrant the court’s consideration. He acknowledged that there could be difficulties in implementing the new model, as MPI raised privacy concerns if key drivers’ identities and driving records were required to be obtained. MPI spokeswoman Kristy Rydz said the public insurer would not appeal the decision and provided the information requested by PUB. “Going forward, MPI will continue to work in partnership with PUB on a driver safety rating model that is actuarially sound and provides the greatest value for Manitobans,” he said in an email.
