Panel recommends approval of SGI overall rate increase, rate rebalancing and one-year surcharge – asks Auto Fund to defer motorcycle rate change
In its newly released report, the Saskatchewan Rate Review Panel is recommending approval of an overall average increase of 2.27% to Saskatchewan Auto Fund rates, effective August 31, 2013.
Rate increase – The Panel approves SGI’s March 14th request for an overall rate increase of 1.03%. Rate capping will mitigate “rate shock” by limiting rate changes to set dollar limits for customers with annual premiums below $1,000. A 15% cap will apply to premiums of more than $1,000.
Surcharge – The Panel also approved the requested 1.23% surcharge to help replenish the Auto Fund’s Rate Stabilization Reserve. While the Auto Fund had requested the surcharge be levied for three years, the Panel recommends a one-year surcharge, citing volatility in several factors affecting the Rate Stabilization Reserve in the future. The Panel also encourages the Auto Fund to show the amount of the surcharge as a separate item on customers’ renewal notices, rather than on a generic insert.
Rebalancing – This will mean some customers will face rate increases greater than the average 2.27%, while others will see a decrease, based on the loss experience for their vehicle class. Rate changes will be capped in order to limit rate shock.
“The Panel worked very hard to achieve a balance of fairness during this review,” said Panel Chair Kathy Weber. “Fairness includes consideration of the Auto Fund’s customers, the Auto Fund itself and the shareholder, which is ultimately the people of Saskatchewan.”
Rebalancing and motorcycles – The Panel approves the proposed rate rebalancing, but recommends the rebalancing affecting motorcycle rates be delayed until the results of the Motorcycle Review Committee are known and any changes are implemented that might achieve greater fairness in motorcycle rates.
Panel terms of reference – The Panel is also recommending that the Panel’s Terms of Reference in future reviews be expanded to include areas of the Auto Fund’s policies and operations that would enable the Panel to do a better job in assessing the fairness and reasonableness of future rate applications.
Weber explained. “Having access to this information would greatly enhance the review process and the search for appropriate and fair rates.”
Weber said the Panel received more than 2,300 emails and more than 500 people attended public meetings in Regina and Saskatoon related to the application. She said reviews currently underway of the Safe Driver
Recognition and Business Recognition programs, and outcomes from the Motorcycle Review Committee, may do much to enhance the rate review process in the future.
