Saskatchewan Government Insurance (SGI) is passing on about $350 million of its earnings back to customers in the form of a one-time rebate and improving injury benefits.
The province announced the news on Friday, saying all registered vehicle owners who have paid auto fund premiums in the past three years and are residents of Saskatchewan will receive about $285 per vehicle.
“The Saskatchewan Auto Fund Rate Stabilization Reserve is in a very strong financial position due to very strong investment returns and – to a smaller degree – fewer collision claims due to the COVID-19 pandemic,” Minister Responsible for SGI Don Morgan said.
“As a result, SGI will pass on these earnings to the people of Saskatchewan by issuing rebates to all registered vehicle owners and by improving injury benefits.”
The province says $285 million of the $350 million will be used for the one-time rebate.
The amount given to each customer will vary and will be calculated based on a proportion of vehicle premiums paid over the past three years – about 26 per cent of an average annual premium in the province.
Every Saskatchewan vehicle owner pays into the auto fund, which maintains the rate stabilization reserve (RSR).
The province says the RSR protects customers against sudden rate fluctuations due to unexpected cost pressures and is a reason why its customers, on average, have the lowest rates for basic auto insurance in the country.
The RSR is highly impacted by how well its investment portfolio is performing.
“After losses last March, in the early days of the COVID-19 pandemic, the RSR experienced strong investment earnings over the past fiscal year, especially in the last quarter,” the province said in a press release on Friday.
“This allows SGI to absorb the one-time cost associated with issuing rebates, while remaining in a position to protect customers from significant rate hikes going forward. Even with issuing the rebate, the RSR will meet industry standards to protect against unexpected cost fluctuations.”
Official Opposition critic for SGI Aleana Young says she welcomes the rebate “with so many families and businesses stretched and struggling to make ends meet.”
The province says rebate checks will be sent to customers by mail in May.
SGI enhancing benefits for 'most seriously injured customers'
The province says the rest of the $350 million will be used to improve injury benefits for its “most seriously injured customers.”
SGI is implementing two significant enhancements for those receiving long-term injury benefits as a result of being injured in a vehicle collision.
- Customers who require assistance with daily tasks (i.e. dressing, bathing, cooking, cleaning and yard care) will see the maximum payments for those services increase to better reflect current market rates. This is expected to benefit more than 1,100 SGI customers.
- SGI customers who receive income replacement benefits from SGI and Canada Pension Plan (CPP) will no longer have income benefits from SGI reduced by their CPP payment. It is standard industry practice to reduce insurance benefits by the CPP payment. SGI is leading the industry by eliminating this practice, to the added benefit of our most seriously injured customers. It is estimated that this will benefit approximately 200 people.
Further information can be found on the SGI website.