After losing a court battle with the Manitoba Public Utilities Board (PUB), Manitoba Public Insurance (MPI) will be switching to a primary driver model for pricing auto insurance.
The PUB ordered MPI to develop a five-year plan for the transition from the current registered owner model to the primary driver model. However, MPI took the PUB to court over the directive, even announcing earlier this year that it planned to continue using the registered owner model and would not be making any changes for the next five years.
But Court of Appeal Justice Freda Steel rejected MPI’s request to appeal the PUB’s directive.
"The challenge to the PUB's jurisdiction over the methodology underlying the DSR [driver safety rating] system has no reasonable prospect of success," Steel said in the October 19 decision.
A primary driver model would mean Manitobans would have to pay their auto insurance based on the history of the primary driver instead of the registered owner of the vehicle. CBC News reported that the change could potentially lead to considerable savings for primary drivers with clean records and high driver safety ratings, while further penalizing those who do not. Safe drivers can save up to 37% on annual insurance fees.
Steel also explained in her decision that only Manitoba, Saskatchewan, and BC assess risk and premiums using the registered owner model. Private insurers across North America, Steel pointed out, utilize the primary driver model. The justice also acknowledged that there may be difficulties in implementing the new model, noting that MPI had raised privacy concerns, particularly if it was required to get the identities and driving records of primary drivers.
MPI spokesperson Kristy Rydz told CBC News that the public insurer would not appeal Steel’s decision, and has provided the information requested by the PUB.
"Going forward, MPI will continue to work collaboratively with the PUB toward a driver safety rating model that is both actuarially sound and provides the greatest value for Manitobans," the representative added.
