Manitoba Public Insurance (MPI) has announced that it is returning up to $110 million to provide financial relief to its policyholders.
“Many Manitobans have been financially impacted by this crisis,” said Crown Services Minister Jeff Wharton. “MPI is proactively providing relief when it is needed most by issuing rebates to its customers as an alternative to future reduced premiums.”
Rebates will be based on what policyholders paid last year and expected to be around 11 per cent, or between $140 to $160, per average policyholder, the minister noted, adding policyholders can expect a rebate cheque at the end of May to early June.
This surplus is the result of fewer claims during this COVID period, coupled with strong year-end financial results. As a public insurance model, MPI operates on a break-even basis and is required to maintain its reserves at a level set by legislation. This rebate is possible because MPI’s reserves are exceptionally strong, allowing excess capital to be returned to ratepayers while ensuring its reserves are fully funded.
“This money is expected to provide financial assistance to Manitobans during this unprecedented crisis,” said Ben Graham, president and CEO, MPI. “We have made significant improvements in our operations to deliver value to Manitobans resulting in stronger financial results.
“With a healthy reserve fund, MPI is in a strong financial situation to move forward with these rebate cheques to support our customers. This rebate to our customers will not adversely impact the corporation’s financial outcomes moving forward. It feels right to give back to our customers when they need it the most.”
Details of the rebates will be made in the coming weeks and further details will be available at www.mpi.mb.ca/Pages/Home.aspx.
In addition to rebating excess capital from the last financial year, MPI notes that as of mid-April, collision claims are down 48 per cent compared to the same month a year ago. MPI estimates that public health orders directing the public to stay at home and for non-essential businesses to cease direct interaction with the public have resulted in approximately $29 million in fewer basic claims being incurred between March 15 and April 15, 2020.
Under existing legislation, MPI is able to return approximately $50 million to its ratepayers and will require the approval of the Public Utilities Board (PUB) for the additional $60 million. MPI will apply to the PUB in the coming days in respect of the incremental $60 million in order to be able to return these amounts to Manitoba ratepayers. If PUB approval is obtained in the next few weeks, the entire $110 million will be returned as part of the rebate cheques mailed to Manitobans.
Based on current projections, MPI is confident that due to the extension of public health orders and the provincial state of emergency extending until May 18, related savings to the corporation will continue into the foreseeable future.