Information Requests Round 1 Reference: TI.18 (a) Please provide a copy of any materials explaining the fleet rating program typically made available to fleet policyholders. (b) Please explain the rationale for relating the proposed maximum fleet rating rebate to the current maximum vehicle premium discount under the Driver Safety Rating program. (c) Considering that Driver Safety Rating level is affected by both accident and conviction record whereas the fleet rebate is affected only by claims (i.e., like accident record), please comment on why fleet policyholders should potentially benefit from a maximum rebate equivalent to the maximum vehicle premium discount available under the Driver Safety Rating program. RESPONSE: (a) Please see attached Manitoba Public Insurance Fleet Safety pamphlet (attachment A), Manitoba Public Insurance The Autopac Fleet Program (Attachment B) and CAPSC Safety Services Manitoba Corporate Driver Improvement Program pamphlet (attachment C). A fleet brochure is sent to new fleet owners and to existing fleet owners with their vehicle registration/insurance renewal or reassessment notice, and with their annual fleet assessment. The Manitoba Public Insurance material is also available on-line at http://www.mpi.mb.ca The CAPSC Safety Services Manitoba material is also available on-line at www.safetyservicesmanitoba.ca (b) Please see TI.18, Section 7. (c) Underwriting differences exist between fleet customers and individual customers who use the DSR scale. It is important to note per TI.18 section 7, that while these underwriting differences exist, the loss ratio for fleet customers is approximately 80%, which is deemed to be reasonably close to the loss ratio target for Basic products. - 1 -
Information Requests Round 1 Accordingly, the rates charged to fleet customers are actuarially correct. When we contrast the DSR scale to the fleet rebate scale, we observe the following: 1. Fleet customers are charged the standard rate and get their discount on a retrospective basis, while DSR customers get the discounts on a prospective basis. 2. DSR customers who have an accident must be 50% at fault or more to go down the DSR scale while fleet customers accident losses are counted based on percentage at fault plus 100% of any comprehensive claims. 3. Driving behaviour is known to be predictive of accidents and therefore should be taken into account for a prospective program such as DSR. However, since the fleet experience is analyzed on a retrospective basis, it is reasonable to assume that a number of factors, including driving behaviour, has contributed to the loss experience. In addition, fleet owners manage their employees driving behaviour as a means to improve the loss experience. Based on the above, one can argue that the factors considered for the fleet program are more comprehensive than the DSR scale. The burden put on fleet customers to mitigate losses are onerous and the consequences for not doing so are severe. In conclusion, since the rates are actuarially correct and the factors used to determine the rates are onerous, fleet customers should be entitled to the same discounts that DSR customers are. - 2 -
Fleet Safety A Priority for Fleet Owners Definition of fleet Rebates and Surcharges Questions and Answers
Fleet Safety A Priority for Fleet Owners The Autopac fleet program upholds our commitment to a rating structure that rewards safe driving and vehicle maintenance. We encourage fleet owners to share our interest in safety. By doing so, fleet owners will see the results of their safety efforts through a sliding scale of rebates and surcharges. The lower the losses paid by Manitoba Public Insurance, the less fleet owners will have to pay for vehicle insurance.
What is a fleet? n Ten or more vehicles registered (including vehicles under dealer and repairer plates) on the first day of any customer month in the fleet owner s registration period. n Insured for a minimum number of days. If you have 10 or more vehicles registered and are not sure if you qualify for the fleet program, please contact the Fleet Unit for more detailed information. Are there any vehicle classifications which do not qualify for the fleet program? Excluded vehicles are: n Vehicles classified as insurance-exempt vehicles n Taxis n Livery Vehicles n Trailers n Vehicles for which premiums are paid only for Personal Injury Protection Plan coverage n Off-road vehicles n Motorcycles n Mopeds n Mobility vehicles n Vehicles under a Lay-up policy n Vehicles under a Rental Car Insurance policy 1 Fleet Safety
How is a rebate or surcharge determined? Rebates and surcharges are determined by loss experience of the fleet. A loss experience is the ratio between all losses paid by Manitoba Public Insurance and the fleet premiums you ve paid. Except for comprehensive claims, which are fully included in the calculation of the loss ratio, claims are included according to the degree of responsibility. Losses paid and fleet premiums for new and leased car protection coverage are not included in the fleet experience. For example, if you are held 40 per cent responsible for a claim, only 40 per cent of the cost of the claim (including all costs for which the fleet driver is responsible) will be charged to your fleet experience. Currently, the maximum amount used for any one loss is $25,000. Rebates or surcharges will vary, depending on your loss ratio. The maximum rebate is 25 per cent of fleet premiums and the maximum surcharge is 50 per cent of fleet premiums. Fleet assessments may be adjusted based on increases or decreases to claims amounts which were not included in the previous year s fleet assessment. 2 Fleet Safety
Rebates If the loss experience of the fleet is (%) Refund will be (%) If the loss experience of the fleet is (%) Refund will be (%) 69...1 56... 14 68...2 55... 15 67...3 54... 16 66...4 53... 17 65...5 52... 18 64...6 51... 19 63...7 50... 20 62...8 49... 21 61...9 48... 22 60... 10 47... 23 59... 11 46... 24 58... 12 45 or less... 25 57... 13 3 Fleet Safety
Surcharges If the loss experience of the fleet is (%) Surcharge will be (%) If the loss experience of the fleet is (%) Surcharge will be (%) 70 79... nil 105... 26 80... 1 106... 27 81... 2 107... 28 82... 3 108... 29 83... 4 109... 30 84... 5 110... 31 85... 6 111... 32 86... 7 112... 33 87... 8 113... 34 88... 9 114... 35 89...10 115... 36 90...11 116... 37 91...12 117... 38 92...13 118... 39 93...14 119... 40 94...15 120... 41 95...16 121... 42 96...17 122... 43 97...18 123... 44 98...19 124... 45 99...20 125... 46 100...21 126... 47 101...22 127... 48 102...23 128... 49 103...24 129 or more.. 50 104...25 For Example: Equals Equals Equals Claims divided Fleet Loss % rate Rebate/Surcharge Incurred by Premiums Ratio of Premium Amount $5,254 $11,759 45% 25% of or rebate premium of $2,939 $11,759 $5,425 $2,495 217% 50% of or premium surcharge of $2,495 $1,247 4 Fleet Safety
Questions & Answers How will I know how my fleet safety program is progressing? To help you manage the losses experienced by your fleet, you will receive a quarterly progress package that includes reports on fleet identification, claims incurred, and fleet loss ratio. You will also get an assessment package annually which includes your fleet assessment notice. This will indicate a rebate or surcharge based on your loss experience for the year. What should I do if I disagree with my surcharge? First, contact the Fleet Unit and request a review of your record. If the result is unchanged, you can appeal through the Rates Appeal Board. Our staff will explain how. Some vehicle classifications don t have coverage through Autopac and others are only eligible for basic Autopac coverage. What can I do to obtain or enhance coverage for these vehicles? Contact your Autopac agent for information about Manitoba Public Insurance s Special Risk Extension (SRE) Department for a policy tailored to fit your needs. For example: n Physical damage excluded under basic Autopac n Increased third party liability limits If you place your extension coverage with SRE, the department has a fleet safety service representative on staff to help you with your safety program. 5 Fleet Safety
Where can I obtain more detailed information on the Manitoba Public Insurance compulsory fleet program? More detailed information can be obtained by writing or calling: Manitoba Public Insurance Fleet Unit P.O. Box 6300, 234 Donald Street Winnipeg, MB R3C 4A4 985-7510 or 985-7501 or 1-800-406-1886 The information contained in this brochure is of a broad, general nature. The Manitoba Public Insurance Corporation Act, The Drivers and Vehicles Act, The Highway Traffic Act and their accompanying Regulations should be consulted for interpretation and application under the Law. Website: www.mpi.mb.ca This publication is also available in large print, audio tape or braille on request. Contains 20% post-consumer waste, which is used paper collected through recycling programs. This brochure can also be recycled. May 2010 FBR0044 6 Fleet Safety
Manitoba Public Insurance > Insurance August 8, 2011 Attachment B Page lof3 orne Slt~ Map Disdalmer Contact U SflJlrr;h: Driver Ucensulg Insurance Fraud Consumer Protection - Sanctions '_"1",,111 Driver Education Driver Ed Challenge In the Community 2011 Manitoba P\lbllc Insurance INSURANCE The Autopac Fleet Program ABCs of Insurance Basic Autopac Optional Autopac Insuring a vehicle New to or Leaving MB Buying or Selling Discounts for fleet owners are handled differently than is the case with individual vehicle owners. The Autopac Fleet Program upholds our commitment to a rating structure that rewards safe driving and vehicle Plan a Trip Fleet Program FAQ A.utopac Fleet Progl'am What is a Fleet What Doesn't Qualify Re bates & Surcharges Questions maintenance. We encourage you to share in our focus on safety. By doing so, you'll see the results of your safety efforts through a sliding scale of rebates and surcharges, The lower the losses we pay, the less you'll have to pay to insure your fleet. What is a fleet? To qualify, you must: Have 10 or more vehicles registered (including vehicles under dealer and repairer plates) on the first day of any customer month in your registration period Meet the required minimum number of insured days Contact the Fleet Unit at (204) 985-7501, (204) 985-7510 or 1-800-406-1886 if you're not sure whether your fleet qualifies. Are there any vehicle classifications which do not q ualify for the Fleet Program? Excluded vehicles are: Vehicles classified as insurance-exempt vehicles Taxis Livery vehicles Trailers Vehicles for which premiums are paid only for Personal Injury Protection Plan coverage Off-road vehicles Motorcycles Mopeds Mobility vehicles Vehicles under a Lay-up policy Vehicles under a Rental Car Insurance policy How are rebates and surcharges calculated? Rebates and surcharges are determined by the loss experience of your fleet, A loss experience is the ratio between all the losses we paid on your behalf and the fteet premiums you paid to us, Claims are included according to the degree of responsibility, except for comprehensive claims, which are fully included in the calculation of the loss ratio. Losses paid and fleet premiums for new and leased car protection coverage are not included in the fleet experience. For example, if you are held 40% responsible for a claim, then only 40% of the cost of the claim (including all costs for which the fleet driver is responsible) will be charged to your fteet experience. r:llrrpntlv. thp m<'lximllm <'lmnllnt IIc;prl fnr i=lnv nnp Inc;c; ic; <t;]s.ooo. Rph<'ltpc; <'lnn c;lirrh<'lrnpc; will http://www.mpi.mb,cal engli shlinsurancel autopac fleet_program, hlml 7/19/2011
Manitoba Public Insurance> Insurance August 8, 2011 Attachment B Page 2 of3 ~;~y :'d~t~r~in~d- 'b 'y' Y~~r-I~~-s-~~ t~~ -ih~- 'm-~~'i~~;;' ' ~~b~te ~;';';u-n-t' j~"i-5-oio-~ffi~et-p;~'~i~~s' ~' ~d the maximum surcharge amount is 50% of fleet premiums. Rebates If the loss your refund w ill be If the loss your refund will be experience of your (% ) experience of your (%) fleet is (% ) fleet is COlo) 69 1 56 14 68 I 2 II 55 I 15 67 3 I 54 I 16 66 4 I 53 17 65 5 I 52 18 64 6 I 51 19 63 7 50 I 20 I 62 8 49 21 I 61 I 9 48 22 60 10 47 23 59 11 46 24 58 12 45 or less 25 57 13 Surcharges If the loss your surcharge w ill If t he loss your surcharge will experience of your be (%) experience of your be COlo) fleet is (%) fleet is (%) 70-79 I Nil I 105 I 26 80 1 106 II 27 I 81 2 107 II 28 I 82 I 3 108 II 29 I 83 I 4 109 I 30 I 84 ~ 5 110 31 85 6 111 32 86 I 7 112 33 87 I 8 113 34 I 88 9 I 114 35 89 10 I 115 36 90 11 116 37 91 12 117 38 92 13 118 39 93 14 119 40 94 15 120 41 I I 95 I 16 II 121 42 96 I 17 II 122 43 97 18 I 123 44 98 19 124 45 99 20 125 46 100 21 I 126 I 47 101 22 127 48 102 23 128 49 103 24 I 129 or more II 50 I http://www.mpi.mb.caiengiishiinsurance/autopac._fleet_program.htmi 7119/2011
Manitoba Public Insurance> Insurance August 8, 2011 Attachment B Page 3 of3 104 25 For example claims incurred div id.d by II fleet Equals los$ ratio equals /0 rate of equals premiums premi"m rebate/surcharge amount L:JDL:Jc:J 25% ~Dc:Jc:J of or a rebate of premium $2,939 $11,759 50% of or a surcharge premium of $1,247 $2,495 How will I know my Fleet Safety Program is working? We'll help you manage the loss experience of your fieet by providing a quarterly progress package that includes reports on fleet identification, claims incurred, and fleet loss ratio. A final fleet assessment package is sent annually with a statement of account. This will indicate your rebate or surcharge, based on the fleet results for the year, What if I disagree w ith my surcharge? You're entitled to appeal your surcharge, and can have your surcharge reviewed by the Fleet Unit. If the record is correct and you wish to appeal, you will be advised on how to appeal to the Rates Appeal Board, ABCs of Insurance I Basic Autopac! Optional Autopac! Insuring a Vehicle! New to or leaving Manitoba! Buying or Selling I Planning a Trip! Autopac Fleet f>rogram! FAQ BACK TO TOP http://www.mpi.mb.calenglish/insurance/autopac_fleet_program.html 7/19/2011
Q&A Are the courses different from season to season? The courses are the same regardless of the season. With our new state of the art skid car we are able to simulate winter driving conditions even during the hottest day of the year. Are there group or corporate discounts? Yes. Each group is assessed individually and the discount is determined by the amount of services purchased. Join our Impressive list of clients who use these programs to develop and enhance the skills of their employees. Safety Services Manitoba courses can be customized to meet your specific corporate or business needs. Whether it's a classroom session or on-site at our training track, our professional instructors can help you. & CAPSC Safety Services MANITOBA Our simple proven three step system improves driver safety. performance and morale. 1. Driver Evaluations 2. Defensive Driving 3. Winter/All Season Driving August 8, 2011 Attachment C Manitoba Hydro Sheriff's Department Rossbrook House City of Winnipeg G4S Phone: Winnipeg 949-1085 Other areas toll tree 1-800-661-3321 Online: www.safetyservicesmanitoba.ca Safety Services Manitoba 3-1680 Notre Dome Avenue Winnipeg, MB R3H 1 H6 GO-TO www.safetyservicesmanitoba.ca CAPSC Safety Services MANITOBA GO-TO www.safetyservicesmanitoba.ca
Attachment C