Manitoba Public Insurance's rate freeze request denied, must drop rates by 5%: utilities board
CBC
Manitoba drivers will pay lower auto insurance premiums next year, under a new ruling by the provincial regulator.
Crown-owned Manitoba Public Insurance, under orders from the former Progressive Conservative government, had asked for a rate freeze for next year.
But the Public Utilities Board has decided on a five per cent rate cut, as of April 1, partly because it expects the cost of claims to be lower in the coming years than Manitoba Public Insurance has forecast.
The board is also criticizing Project Nova, a technology-modernization project at the Crown corporation that has run over-budget.
The latest estimate has the project coming in at up to $290 million — almost triple the original forecast.
The board says it is worried costs may rise further.
"Based on the history of the project and the evidence in this (general rate application), the board does not have confidence in MPI's Project Nova budget. Ultimately, the board is concerned that the amount may far exceed $290 million," read the board decision, released Monday.
Manitoba Public Insurance, which has a monopoly on basic automobile insurance in the province, has been steeped in controversy for a few years.
The former Progressive Conservative government ordered an external review of MPI earlier this year, based on Project Nova's rising costs and a sharp jump in projected expenses and staffing levels.
In the spring, MPI's chief executive officer was dismissed, and it was revealed that another senior executive had been allowed to live in Toronto and have his travel expenses to and from Winnipeg paid for.
The Crown corporation was then hit by a strike in the summer.
After the NDP won the Oct. 3 provincial election, it replaced MPI's board of directors and ordered a new wage offer be presented to workers, who accepted the deal.
The Crown corporation said Monday it welcomed the board's ruling.
"A five per cent overall rate decrease will help provide financial relief to customers across the province who continue to manage high costs of living," read a prepared statement from MPI.
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