SGI auto insurance rates stand to increase on 55 per cent of Saskatchewan vehicles

REGINA — Auto insurance rates are poised to increase on 55 per cent of Saskatchewan vehicles, as the provincial rate review panel on Tuesday gave the green light to SGI's request for an average 4.2-per-cent hike.

The rate re-balancing still needs the seal of approval from the Saskatchewan Party government before it could take effect Nov. 1.

"This information will go to cabinet at the earliest possible time and then cabinet will review (the panel's) decision and we will come forth with an opinion and make it public," said June Draude, minister responsible for SGI.

Decisions about increases "aren't taken lightly," Draude said, although cabinet typically approves the findings of the rate review panel.

Not everyone would see a rate hike under the proposed change. For about 55 per cent — or 553,000 vehicles — the average rate increase will be $55. About another 13 per cent, or 126,000 Saskatchewan vehicles, will see an average reduction of $21. A further 32 per cent, representing 321,000 vehicles, won't see a rate change.

SGI made the request to the rate review panel in the spring, citing rising claim costs and reduced investment income. The Crown insurer noted with the release of its latest annual report in April that the Saskatchewan Auto Fund lost $42.7 million in 2008 and had to draw down its rate stabilization reserve to $102.5 million.

In its report published online, the rate review panel emphasized that the Auto Fund "operates on a self-sustaining basis over time, and neither receives money from, nor pays dividends to, the Government of Saskatchewan. There is no profit component factored into the premiums that Saskatchewan Auto Fund customers pay for basic insurance coverage in Saskatchewan."

The panel also calls on SGI to submit a rate application on an annual basis, to guard against the possibility of having to make big adjustments. The last rate increase was in 2000.

But news of the pending rate increase almost didn't make it to the local media on Tuesday due to a recent byelection call.

A press release alerting the Leader-Post to the panel's recommendation for an average 4.2 per cent increase was issued Tuesday morning, but was quickly recalled due to a law that severely curtails any public comment from government officials during a byelection period. The restrictions also apply to bodies such as the rate review panel, but not to government ministers.

Byelections are being held Sept. 21 to fill vacancies in Regina Douglas Park and Saskatoon Riversdale.

The law means media outlets based in Saskatoon or Regina won't receive faxed or e-mailed news releases from the government ministries or associated bodies until after the vote. However, ministry releases will still be accessible on the government's website. The government also won't make any announcements in either city for the next four weeks.

Justice Minister Don Morgan said it may be time for an overhaul of that election legislation. While intended to ensure a candidate running for the governing party doesn't have an advantage, he noted the law was drafted prior to the widespread usage of the Internet.



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