Manitoba Public Insurance (MPI) announced that it will be completing its previously announced plan to transfer an estimated $65 million worth of funds from its non-compulsory auto insurance extension business into its driver and vehicle licensing line.
According to a statement by the Crown corporation, while Manitobans have benefitted from purchasing their basic auto insurance and securing their driver/vehicle licenses from the same organization since 2004, the “significant cost of driver licensing and vehicle licensing has never been properly funded.”
MPI explained that since it started administering the driver and vehicle licensing line of business, it had been operating in a deficit. The capital transfer is meant not only to make up for these losses, but also to cover “significant investments in technology” – such as online services – required to meet growing consumer demands, MPI added.
The $65 million capital transfer is the second of two transfers of excess funds that MPI had announced last year; the two transfers total $125 million.
Mark Giesbrecht, vice president and chief financial officer for MPI, explained in a statement that the excess funds are coming from MPI’s competitive line of auto insurance extensions, and not its compulsory Basic Autopac line.
“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,” said Giesbrecht.
MPI’s extension line of business offers additional insurance options that are not mandatory for Manitoban drivers. These include additional third-party liability coverage, rental car insurance, and auto loss of use policies. The extension line also allows drivers to buy down their deductible.
