MPI ordered to cut rates by 5%

MPI ordered to cut rates by 5% | Insurance Business Canada

Insurance News

MPI ordered to cut rates by 5%

Crown corporation says it welcomes board’s ruling

Insurance News

By
Mika Pangilinan

The rate freeze sought by Manitoba Public Insurance (MPI) for next year has been rejected by the Public Utilities Board.

Instead of a freeze, the board has ordered MPI to cut rates by 5% starting April 1, citing projections that claims costs in the following years will be lower than what the Crown-owned insurer is anticipating.

Project Nova was originally budgeted at $86 million, but it is now estimated to cost roughly three times that amount.

The board said that it “does not have confidence” that the cost of the project will stay within budget, especially since MPI has had to revise its cost estimates before.

“Ultimately, [we are] concerned that the amount may far exceed $290 million,” read the note from the board, which was released Monday.

“A 5% overall rate decrease will help provide financial relief to customers across the province who continue to manage high costs of living,” a statement from the Crown corporation read.

MPI also addressed the board’s concerns about the ballooning budget of its IT modernization initiative, stating that it has “entered into a new agreement … to provide governance oversight to Project Nova.”

As part of this move, MPI said it appointed a new chief information and technology officer who will offer “executive leadership” to the project, as well as other IT initiatives.

More challenges came as MPI’s workers went on a two-month strike that began in late August.