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Scale Models: MPI directed to adopt primary driver rate adjustment model following court appeal

Winnipeg, Manitoba — Good drivers will no longer subsidize bad drivers, according to a Manitoba lawyer following the recent court decision to adjust MPI insurance rates based on a primary driver model, rather than a registered owner model.

“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,” said Charlotte Meek, a lawyer representing the Coalition of Manitoba Motorcycle Groups, on MPI’s previous model of adjusting rates and discounts based on who it is originally registered to, rather than the primary driver of a vehicle.

This decision comes off the heels of a recent court battle between the provincial insurer and the Provincial Utilities Board, the latter of whom directed MPI to adopt the new model following years of pressure from advocates like Meek.

The change aims to reward drivers on the top end of MPI’s driver safety rating scale, who are eligible to save up to 37 percent on their insurance, though it would provide no relief for drivers on the other end of the scale.

MPI attempted to appeal the directive from PUB, suggesting that the body in charge of setting insurance rates in Manitoba had overstepped its jurisdiction.

The insurer claimed in its appeal that “any significant change to this model would create large rate dislocation and require significant regulatory changes, as well as significant information technology (IT) changes.”

On the other hand, the PUB contended that MPI had failed to follow proper procedure if there were concerns about the new model, saying in a statement that “When the [PUB] issues directives, [MPI] may choose to file a request for variance or seek leave to appeal from the Manitoba Court of Appeal. [MPI] may not simply refuse or fail to comply with the directive.”

Court of Appeals Justice Freda Steele ultimately shot down MPI’s appeal and ruled to enforce PUB’s original directive. MPI says it has no plans to appeal this most recent decision.

“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,” said MPI spokesperson, Kristy Rydz, in an email to the CBC

As it stands, Manitoba, Saskatchewan and British Columbia are the only provinces to assess risk and adjust rates based on the registered owner model, while most private North American insurers use the primary driver model.

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