Manitoba Public Insurance confirmed today that it will be completing the previously announced transfer of funds from its non-compulsory Extension line of business to Driver and Vehicle Licensing to ensure the adequate funding of this line of business. Manitobans have enjoyed the convenience of one-stop shopping for their insurance and licensing needs since 2004. But the significant cost of driver licensing and vehicle licensing have never been properly funded. Today’s transfer is an estimated total amount of $65 million.
The Driver and Vehicle Licensing line of business has been operating in a deficit since it has been administered by MPI. Additional funds are required for this reason but also to cover for significant investments in technology that are needed to continue to meet growing customer demands, including the provision of online services, and to create greater operational efficiencies.
This is the second of two transfers of excess funds that MPI announced last year, totalling $125 million. These funds were drawn from profits exceeding MPI’s target capital requirements in the non-compulsory Extension line of business, which exists to provide Manitobans more insurance options, including buying down their deductible, or purchasing additional Third Party Liability coverage, Rental Car insurance or Auto Loss of Use policies.
“These funds are coming from the Corporation’s competitive line, not its compulsory Basic Autopac line,” said Mark Giesbrecht, Vice President & Chief Financial Officer, Manitoba Public Insurance. “The transfer is in full compliance with all applicable statutes and regulations and Manitobans can be assured that the Corporation will remain financially strong across all of its lines of business in its delivery of services.”
MPI is mandated to provide affordable rates for Manitobans while ensuring the financial health of the Corporation across all of its lines of business. In a reflection of its continued prudent financial management, MPI has provided nearly $500 million in rebates to its policy holders over the past two years ─ $110 million in May 2020, $69 million in December 2020 and $312 million in February 2022.
While maintaining its commitment to fulfilling its mandate, this latest transfer will continue to help the organization accomplish its financial goals and was necessary to cover financial deficits in the Driver and Vehicle Licensing line.
“Without these internal allocations, the Corporation would face a significant underfunding of the Driver and Vehicle Licensing line and technology projects aimed at modernizing and streamlining our business delivery to customers. This decision was the most financially responsible option,” said Giesbrecht. “This is not the first time that MPI has needed to transfer excess funds from Extension to Driver and Vehicle Licensing. This line of business has operated in a historic deficit. Between 2005 and 2014, a cumulative $134 million was transferred from Extension to cover the operational deficit of the Driver and Vehicle Licensing line of business.”
“The Corporation is committed to providing transparency to the public about its financial operations, including additional details in our annual reporting, as well as our future direction in enhancing delivery to customers and working with the Province on a long-term framework for the self-sufficiency of the Driver and Vehicle Licensing line,” explained Giesbrecht.