Press releases

Maintaining equity
THE PANEL OF EXPERTS MAKES PUBLIC ITS REPORT ON THE AUTOMOBILE INSURANCE CONTRIBUTIONS PROPOSED BY THE SAAQ

Québec, December 9, 2011. – Today, the Panel of Experts on automobile insurance contributions made public its report on amendments to insurance contributions proposed by the Société de l’assurance automobile du Québec (SAAQ). In its report submitted to the SAAQ Board of Directors, the Panel of Experts delivers a very simple message: after successfully taking on the problem of financing the public automobile insurance plan over the last several years, the SAAQ now needs to ensure that equity is maintained.

The Panel of Experts consists of three members who are representative of the actuarial and insurance sectors, and these experts must render an opinion on the amendments to automobile insurance contributions proposed by the SAAQ for 2011 through 2015. These amendments were published in August 2011 in a discussion document entitled On the Right Path for a Sustainable and Equitable Plan.

In its 54-page report, the Panel of Experts first indicated that it fully concurred with the SAAQ’s three main objectives for the coming years, that is: targeting full funding of the plan without raising insurance contributions for the vast majority of contributors; reviewing insurance contributions; and introducing a review of the financial situation of the Fonds d’assurance automobile du Québec every three years.

With respect to the amendments to insurance contributions, the Panel of Experts emphasized the importance of respecting the principle of equity. “For the Panel of Experts, equity is an objective to strive for at all times,” said Mr. Michel Sanschagrin, actuary and Chair of the Panel of Experts. “In the context of insurance,” he explained, “equity requires each category of contributors to pay the costs attributed to them.” He added, “For the most part, the rates the SAAQ is proposing follow that logic, with two exceptions.”
 

• First, the SAAQ proposes to recognize motorcyclists’ greater vulnerability. Based on that recognition, the SAAQ proposes to reduce the insurance contributions required of motorcyclists by about six million dollars per year, an amount that must be financed by all plan contributors. The Panel of Experts cannot concur with this measure, which contravenes the fundamental principle of equity.
   
• Second, the SAAQ proposes a cap at less than the real cost of insurance contributions required for sport motorcycle registration. This reduction of contributions must be financed by all other motorcyclists. According to the Panel of Experts, this type of cap constitutes an arbitrary limit that also contravenes the principle of equity.

“These two measures make a breach in the principle of equity that is the basis of the public automobile insurance plan,” commented Mr. Sanschagrin. “Therefore, we are warning the SAAQ against future consequences if such measures are adopted. With this fundamental concern in mind, we are recommending maintaining plan equity for all.”

In its report, the Panel of Experts makes fourteen recommendations, nine of which deal with insurance contributions for motorcycles. One recommendation establishes the general principle of equity on which insurance contributions must be based. The other recommendations deal with insurance contributions for buses, transparency on payment notices, sales tax on insurance contributions and the recent funding policy adopted by the SAAQ. The recommendations are listed in a separate press release.

The Panel of Experts is made up of Mr. Michel Sanschagrin, actuary and Chair of the Panel, Ms. Louise Dagnault, chartered accountant, and Mr. Henri Renault, lawyer. Eight submissions were made and the Panel of Experts held public hearings in October 2011. The mandate, approach and composition of the Panel of Experts are explained in a separate press release.

The report is available on the Panel of Experts Web site (www.conseilexpert.aauto.ca) as well as on the SAAQ Web site (www.saaq.gouv.qc.ca). Paper copies of the report are available by contacting the Direction des communications at the SAAQ.


Information
Jacques Carrière
Communications Coordinator
Conseil d’experts sur les contributions d’assurance automobile
Telephone: 418 643-1890; 1 855 622-4077 (toll free)
Email: email@conseilexpert.aauto.ca