A Response from the President

The saga of MPI continues with this bit of correspondence I received last week from the CEO & President Marilyn McLaren. I have also included my response (as yet unmailed) to her lengthy, politically correct message.

Dear Ryan Kinrade,

Thank you for your recent enquiry about the application of driver’s licence accident surcharges. I’m pleased to clarify your concerns.

At the outset, please understand that Manitoba Public Insurance is a not-for-profit organization, and collects only enough premiums to pay for claims costs and operating expenses. The surplus rebate you referred to you your recent email message resulted from stronger than expected investment income, lower claims costs, and profits in the corporation’s competitive line of business. As a result, the corporation was able to refund approximately $58 million to ratepayers, the second such rebate in five years. For policyholders, the rebate represents 10 per cent of the basic premium they paid in the 2004-2005 insurance year.

As to collision responsibility, the corporation considers all the available information about a loss prior to assessing fault. This includes driver and witness statements, police reports, vehicle damage, prior court decisions, and legislation set out in The Highway Traffic Act (HTA). Section 153(1) of the HTA indicates that drivers are responsible for the loss or damage they cause due to the operation of motor vehicles upon highways.

Drivers who cause a collision are more likely to cause another one. To reflect this increased risk, we assess premium surcharges on Manitoba drivers’ licences and/or loss of vehicle insurance premium discounts for at-fault collisions. An at-fault collision is one for which the driver is held 50 per cent or more responsible. Manitobans have consistently told MPI they want drivers who cause collisions to contribute more to the insurance fund than those who don’t. Rewarding good drivers and surcharging those who cause collisions helps to insure this happens.

Drivers who have had one at-fault collision and own and insure at least one vehicle lose their insurance discount, or, if they have at least 6 years of claims-free driving, pay a premium surcharge on their driver’s license, while retaining their insurance discount.

Drivers who don’t own and insure vehicles may still cost the insurance fund by causing collisions. These drivers are at greater risk of causing another collision, but because they pay no vehicle premiums, the increased risk can only be assessed as a premium surcharge on their driver’s licence. It would be unfair to expect Autopac policy holders to fund the entire cost of these collisions.

You expressed a concern about the corporation treating non-vehicle owners unfairly by not allowing them to use merit points to offset financial penalties. To clarify, driver licence merit points benefit both vehicle owners and non-vehicle owners. Each merit point a driver earns reduces the cost of a driver’s licence by $5. As well, merits can be applied toward reducing demerit points assessed for driving infractions at a rate of two to one. Neither vehicle owners nor non-vehicle owners can apply merit points toward the payment of surcharges assessed due to collision responsibility.

Mr. Kinrade, I understand you successfully appealed your surcharge to the Rates Appeal Board (RAB). While the RAB has authority to alter surcharges, its decisions have no bearing on collision responsibility.

I appreciate you taking the time to express your concerns. It’s through communication from Manitobans like you that MPI can continue to improve its products and services.

Yours truly,
Marilyn McLaren
President and Chief Executive Officer

cc: Gord Mackintosh
Office of the Provincial Ombudsman

Mr. Kinrade responds:

Dear Ms. McLaren,

Thank you for your response to my e-mail. I can tell by the tone of your letter that you do not consider my challenge to your policy to be very significant or worthy. Despite the length of the letter it is awash with your corporation’s pseudo-political mumbo-jumbo and the same tired justifications offered in other publicly available literature. I am not at all surprised by this, though I admit I’m a tad disappointed.

Your letter also leads me to believe that any further correspondence will be in vain, but I feel the need to respond to the inaccuracies laid out in your letter.

It is your opinion that your system is fair and represents the best interests of Manitobans, that a premium placed on top of a licence is a reasonable way to guard against the increased risk posed by drivers who have had an accident. Your assertion that drivers who have one accident are more likely to cause another, despite any statistical data you present, is a condemnation against all Manitobans who consistently maintain good driving records. It is highly unfair, and unreasonable to assume imminent guilt based on past actions, most especially in the case of a single incident over a number of years. The justice system gives a first-time offender a chance to rehabilitate, you accuse him of future crimes and assess a penalty towards that end.

You insist that it is unfair to make policy holders pay for the mistakes of others, that an additional premium insures that the perpetrator pays for the crime. It was my understanding that insurance, especially of the public variety, was designed to protect people from accidents, not to act as some kind of judge and jury against innocent citizens who are driving fully insured vehicles. What is the point of paying insurance premiums on a vehicle if they are not meant to fully cover damage incurred in an accident?

Finally, you insist that your merit system is equally fair because no-one may use it to offset the financial penalties. My point was that a vehicle owner has no incentive to cash in his merits because they represent a discount on his insurance; a non-vehicle owner on the other hand can only be the beneficiary of a paltry $5 per point discount on his annual licence premium. In other words, the non-vehicle owner is punished more severely for the same accident as the vehicle owner. For his $200 fine the vehicle owner, with 6 years plus of claims-free driving, gets to keep the merit points and discount; the non-owner, with a similar driving record, pays $200 to retain an almost useless set of merits.

It is obvious that your corporation feels it is answerable to its policy holders more so than leeches like myself who do not own vehicles and yet insist on driving. However because you make every driver pay a basic premium on our provincially granted licence you are responsible for leeches like myself as much as you are to those who own multiple vehicles. My rights are equal to the wealthiest car collector in Manitoba, and no amount of majority opinion about what Manitoban’s consider to be fair can ever trump that reality. If you were a private institution you would be perfectly justified in rescinding my licence and telling me to take my business elsewhere. But as the leader of a Crown corporation you must respect the democratic values our government represents, and seek to treat all “ratepayers” in a manner that approaches equality.

As I have pointed out, your policy concerning additional premiums for first accidents is in fact inherently unfair and undemocratic. It is a shame that you make innocent citizens go before a board to protest their innocence. Instead you should be the ones to take your case before a panel if you feel further damages are warranted. There is nothing in your letter that indicates why it should be incumbent on citizens to fight your policies, rather than have you defend them, and I remain dissatisfied with your justifications.