September 30, 2020

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Answers needed over MPI meddling

Editorial

Hey there, time traveller!
This article was published 27/6/2019 (460 days ago), so information in it may no longer be current.

It isn’t particularly helpful, in the pursuit of political clarity, if an answer to a question only prompts more questions.

Such was the case Wednesday when Premier Brian Pallister granted a couple of media interviews in an apparent effort to contain the damage caused by reports that the provincial government had directly meddled in the affairs of Manitoba Public Insurance (MPI) by ordering the public insurer to cede control of its online transactions to independent insurance brokers.

In the course of dismissing reports that he or members of his government ordered MPI officials to abandon their effort to reduce the involvement of brokers in online transactions involving simple renewals of insurance or driver’s licences — a move MPI says would save nearly $240 million (the equivalent of a 4.4 per cent basic auto insurance rate reduction) over five years if all online transactions went through MPI directly, with brokers continuing to handle the majority of in-person sales — Mr. Pallister opted to adopt a posture of incredulity rather than issue a straightforward denial.

"I’m not going to deny that I have a lot of respect for small-business people," said Mr. Pallister, who is part owner of an insurance business in Portage la Prairie currently being run by a business partner. "But... allegations of cronyism? Come on, man."

“I’m not going to deny that I have a lot of respect for small-business people,” said Pallister, who is part owner of an insurance business in Portage la Prairie currently being run by a business partner. “But... allegations of cronyism? Come on, man.” (Mike Deal / Winnipeg Free Press files)</p>

“I’m not going to deny that I have a lot of respect for small-business people,” said Pallister, who is part owner of an insurance business in Portage la Prairie currently being run by a business partner. “But... allegations of cronyism? Come on, man.” (Mike Deal / Winnipeg Free Press files)

Mr. Pallister also told the Free Press he doesn’t think "there is a fair argument to be made" that there is an implicit agreement to give the brokers what they want in their ongoing relationship with MPI. The premier said that while Crown Services Minister Colleen Mayer has advised MPI, she has never directed the public insurer to do anything and is not advocating for independent brokers.

The statements run directly counter to information contained in documents obtained via freedom-of-information requests. Those documents — including emails, letters, briefing notes and presentations — show the provincial government intervened on the brokers’ behalf and directed MPI to extend its contract with brokers until 2021, at a remuneration rate MPI executives viewed as excessive.

An August 2018 briefing note by now-retired MPI vice-president Ward Keith stated the corporation did not intend to enter a new minimum-compensation agreement with the Insurance Brokers Association of Manitoba, because it "would equate to paying broker compensation for work not done" and could not be justified from a ratepayer perspective.

And at a time when the Pallister agenda has included imposing wage freezes across the public sector, the government-directed contract extension called for rate-of-inflation increases in the amounts collected by brokers ($83 million in 2018) for handling MPI-related transactions.

"If Mr. Pallister’s intention with Wednesday’s media availability was to put an end to questions and concerns about his government’s intrusion into dealings between the Crown insurer and the province’s independent brokers, he must surely be disappointed by the outcome. The questions remain. "

MPI’s board, appointed by the current Progressive Conservative government, was sufficiently concerned about intrusions into its business that it sought a legal opinion earlier this year to clarify the board’s role and responsibilities.

If Mr. Pallister’s intention with Wednesday’s media availability was to put an end to questions and concerns about his government’s intrusion into dealings between the Crown insurer and the province’s independent brokers, he must surely be disappointed by the outcome. The questions remain.

And the notion that government interference might affect MPI’s bottom line enough to force it to raise the rates it charges Manitobans for auto insurance is sure to be a conversation-starter on the campaign trail.

More definitive answers — from the premier, his ministers and MPI officials — are required regarding the government’s role in this insurance-industry intrigue.

Could Mr. Pallister seriously have thought Wednesday’s deflections amounted to a satisfactory explanation? Come on, man.

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