MPI head defends Crown corporation after minister orders external review By: Danielle Da Silva Posted: 7:00 PM CDT Wednesday, Apr. 5, 2023

The head of Manitoba Public Insurance isn’t shying away from an external review of its operations, insisting the Crown corporation is “doing the right things” despite the government’s escalating concerns about how it is being managed.

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Hey there, time traveller!
This article was published 05/04/2023 (932 days ago), so information in it may no longer be current.

Chief executive officer Eric Herbelin expressed no qualms about the organizational review of MPI, in an interview late Tuesday afternoon. It was ordered by Justice Minister Kelvin Goertzen, who is also responsible for the corporation.

“As part of the normal course of its business, MPI is on track doing the right things,” Herbelin said, one day after Goertzen revealed the government would hire a third-party to review the corporation.

As of Tuesday, Herbelin said a government directive had not been received and he could not comment on the scope of the reviews or specific areas of interest, as they had not been communicated to MPI.

“Having said that, MPI has been working with the government and with the department of justice on an ongoing basis,” Herbelin said. “We have almost daily touch points with the department. I personally speak with the minister at least on a biweekly basis.

“We provide all the transparency that is required in the course of affairs and we answer all the questions that the minister and the department may have,” he said.

The publicly owned auto insurer has faced scrutiny over the handling of its technology modernization program, Project Nova, which has nearly tripled in price to $290 million since it was launched. It has also faced criticism for diverting Autopac revenue to cover expenses in other areas of its business and for awarding $12 million in untendered contracts to deliver Nova.

Proposed plans to boost the number of full-time employees and changes to financial projections used by MPI for rate-setting were also flagged by the Public Utilities Board as areas of concern.

The pileup of issues prompted Goertzen to take the significant step of issuing a ministerial directive regarding procurement, to request MPI revise its hiring plans to receive budget approval, and to finally order the review on Monday.

While announcing the review, Goertzen described learning about developments within MPI “in ways that ministers would rather not.”

However, Herbelin insisted lines of communication with the government are wide open.

He repeatedly emphasized there’s a high degree of transparency and a good level of collaboration between the two parties and said business is going well at the corporation.

MIKE DEAL / FREE PRESS FILES
MPI CEO Eric Herbelin insisted lines of communication with the government are wide open. — MIKE DEAL / FREE PRESS FILES

MPI CEO Eric Herbelin insisted lines of communication with the government are wide open.

“We are doing our job. We are doing the right things for Manitobans both in terms of running the business and transforming the corporation to making sure that it continues to perform in the future,” he said.

Herbelin acknowledged questions exist about efforts to modernize MPI, including the cost and rollout of Nova, but insisted the technology project is on time, on budget and that cost increases and delays have been widely documented.

“There are good reasons for that that have been rationally explained but still might be difficult to understand or accept,” he said. “I fully appreciate that and we want to make sure that we can provide the full transparency to all relevant parties, including government, the public, that MPI has done due diligence that was needed in this matter and that this can be confirmed.”

The corporation is also training staff and increasing its capabilities with respect to technology, actuarial practices, finances, claims forecasting and customer service, and is making changes to the business to respond to requests and orders by the PUB, he added. Additional workers are required, at least initially, to follow through, he said.

“We are going through the largest transformation that MPI has ever gone through. MPI was founded 50 years ago and has served its purpose very well,” Herbelin said. “It did not invest a lot throughout those years, and we are at the juncture today where certain investments are absolutely necessary for us to continue to operate in an effective and efficient way.”

Asked how the corporation found itself faced with an external inquiry given the open lines of communication with government, Herbelin said he would need to fully understand the scope of the review to properly comment.

“The board has been extremely supportive of management and very vested in all decisions and discussions we’ve had for the last couple of years.”–Eric Herbelin

“But I can also imagine that government and the minister would like to have an independent party review all the facts and be able to confirm: yes, absolutely the various steps that have been taken were the relevant steps, and we don’t have concerns with that,” he said.

MPI’s board of directors — which is appointed by the government to guide the corporation — did not indicate to him that a change in direction was necessary, Herbelin said.

“On the contrary, the board has been extremely supportive of management and very vested in all decisions and discussions we’ve had for the last couple of years,” he said.

Herbelin said he does not feel pressure to step away from his role as CEO and is confident in MPI’s direction.

Requests for comment from MPI board chair Michael Sullivan were not returned.

On Wednesday, Goertzen said the scope and terms of reference will be finalized within two weeks and its eventual findings will be made public. The external reviewer is expected to be hired by the end of the month.

“There’s been significant issues raised, some of which have been public, some of which have been not as public, many of which have been echoed by the PUB, and the CEO and others would have been aware of that.”–Kelvin Goertzen

He reiterated his concerns with communications and transparency at MPI.

As examples, Goertzen said the department has faced frustration obtaining financial information from MPI; instructions with respect to hiring were not acted on in a timely manner; there are concerns with turnover on the executive; and requests for information about back-to-work policies were not satisfactory.

“There’s been significant issues raised, some of which have been public, some of which have been not as public, many of which have been echoed by the PUB, and the CEO and others would have been aware of that,” Goertzen said.

Goertzen said the goal of the review will be to confirm whether MPI’s financial projections are sound; its hiring plans are good value for ratepayers; and that the executive structure is appropriate.

“If there’s a criticism that I might take on that (it’s) maybe it could have happened a little sooner,” he said.

danielle.dasilva@freepress.mb.ca