The Public Utilities Board (PUB) of Manitoba has ruled that the provincial government had no right to dictate the size of Manitoba Public Insurance’s (MPI) reserve fund.

The independent board said that Premier Brian Pallister’s government did not have the authority to pass regulation earlier this year that raised the required minimum amount in a reserve fund to around $350 million – nearly twice its original size. The government wanted to inflate MPI’s reserve fund to serve as a buffer against unexpected rate shocks.

However, the Consumers’ Association of Canada of Manitoba (CAC) in October argued that the provincial regulation impinged on the independent nature of the rate approval process.

Read more: Consumer group claims government is meddling in MPI’s auto insurance rates

The CAC maintained that by increasing the reserve fund’s size, MPI would be compelled to raise auto rates to meet the new limit.

On Tuesday, PUB ruled that the government’s regulation “circumscribed the rate-setting jurisdiction of the board,” which can only happen through law, hence the regulation is “invalid,” CBC News reported.

The CAC has responded favourably to the ruling.

“It also sends a strong message that government cannot just, you know, bring in a regulation to contravene its own legislation,” said CAC Manitoba executive director Gloria Desorcy.

PUB also stated in the same ruling that it endorsed MPI’s planned 0.6% overall cut in auto insurance premiums next year.

Read more: MPI assures customers that online services will not replace brokers

This is not the first time the Manitoba government has been accused of meddling in MPI’s affairs. When MPI announced it would transition some of its services online, critics accused the government of lobbying on behalf of insurance agents and brokers.