The Manitoba Government and General Employees Union

Background: Why Manitobans have a Public Insurance System

In the late 1960s, the Manitoba government decided the private sector had failed to provide Manitobans with adequate, affordable auto insurance. At that time, at least 10 percent of vehicles on the road carried no insurance, insurance companies were denying people coverage, and there were huge gaps in coverage.

For example, "voluntary, unpaid" passengers who were injured in an accident caused by their driver received no compensation unless they could prove gross negligence or willful and wanton misconduct on the part of their driver.

Rates charged in Manitoba had as much to do with the cost of claims in the rest of Canada as with the cost of claims here in Manitoba. As well, the rating system was complex and confusing, with many opportunities for manipulation by private insurers.
Based on the findings of the Manitoba Automobile Insurance Committee, a number of recommendations were made to create a more equitable auto insurance environment for Manitobans.

The big change was that the plan would be compulsory, guaranteeing basic coverage to all Manitobans, and it would be administered by one government agency for greater efficiency. It also included an insurance plan designed to ensure that, for every $1 collected in premiums, at least 85 cents was returned to policy holders in the form of claim payments or benefits. This contrasted with the private sector at the time, which returned about 67 cents of every $1 in premiums.

The Manitoba Public Insurance Corporation was created in 1971 as a non-profit Crown Corporation to provide basic auto coverage. The public system reduced the number of uninsured vehicles on the road and it kept administrative costs and customer inconvenience low, since it combined the compulsory insurance, that was required to legally operate a vehicle on the roadway, with other optional coverage.