The Panel of Experts releases its report and its recommendations on auto insurance contributions
Québec City, June 21, 2006 - Along with the following recommendations, the Panel of
Experts unhesitatingly supports the creation of the Québec Automobile Insurance Fund as an
entity dedicated solely to compensating road accident victims and financing accident
prevention and road safety programs.
The Panel has not issued any recommendations respecting the $2.1 billion that the
government previously removed from the insurance fund. Although the removal sparked
numerous reactions on the part of consultation participants, it is not the Panel’s role to
discuss the reasons for or the consequences of the government’s actions
The following recommendations do not call into question the principle of no-fault
compensation or of sharing the costs between the vehicles involved in an accident.
Issuing of Driver's Licences
Recommendation 1
The Panel recommends that the government
- Rapidly adopt a regulation allowing for annual renewal of driver’s licenses beginning in
2007
- Permit payment by installment, for example, by preauthorized monthly bank withdrawals
Recommendation 2
The Panel recommends that SAAQ
- Provide, if Recommendation 1 is adopted, a mechanism for individuals who renew their
licenses in 2006 to ensure that they pay the required increases in their insurance
contributions, notably through an adjustment upon their anniversary date in 2007
- Piggyback license and vehicle registration renewal dates to simplify procedures, reduce
costs, and provide clearer information to insured motorists about their overall insurance
contributions
Plan Funding
Recommendation 3
The Panel recommends that SAAQ
- Aim to be fully funded by 2011 instead of 2010, in order to spread rate increases over
five years instead of four
- Extend the initial rate-setting period from two years to three, and thereby spread the rate
increases initially slated for a two-year implementation period over three years
Recommendation 4
The Panel recommends that SAAQ
- Start amortizing the accumulated deficit as at December 31, 2005, over a ten-year period
- Also amortize over a ten-year period the deficits caused by underfunding of the plan,
beginning the year after each deficit is recorded (for example, the 2006 deficit will be
recorded in 2007 and amortized beginning in 2008)
Recommendation 5
The Panel of Experts recommends that SAAQ
- Amortize plan deficits until full funding is achieved in 2011—if its recommendation to
this effect is accepted—by imposing a uniform contribution for all road vehicles,
irrespective of vehicle category
- Divide amortization amounts attributed to the passenger vehicle and motorcycle
categories between driver’s license and vehicle registration payments in the same
proportion as the basic insurance contribution
- Readjust the amortization amounts in 2008 and 2009 based on actual deficits recorded in
2006 and 2007
Recommendation 6
The Panel of Experts recommends that SAAQ
- Adopt a long-term funding policy prior to the next rate review. Such a policy would help
insureds understand how SAAQ plans to maintain balanced plan funding and determine
the contributions required for each road vehicle category or subcategory
Insurance Contribution with Driver's License
Recommendation 7
The Panel of Experts recommends that SAAQ
- Maintain the approach already in place respecting the division of insurance contributions
between the driver’s license and vehicle registration
Motorcycle Driver's License
Recommendation 8
The Panel of Experts recommends that SAAQ
- Allow motorists to give up their motorcycle license at no charge whenever they renew
their driver’s license
Motorcycle Registration
Recommendation 9
The Panel of Experts recommends that SAAQ
- Limit the number of motorcycle categories to three—400cc and less, regular motorcycles
of 401cc and over, “sport” motorcycles of 401cc and over
- Annually review the regular and “sport” classification on the basis of the technical
classification criteria in effect to ensure that each model still meets its subcategory
criteria
Indexation of Insurance Contributions
Recommendation 10
The Panel of Experts recommends that SAAQ
- Link any general provision for indexing contributions to the development of a long-term
funding policy
- Index insurance contributions for passenger vehicle registration by 2% a year between
2007and 2009 in order to ensure equal treatment for all categories of road vehicle
Billing of Insurance Contributions
Recommendation 11
The Panel of Experts recommends that SAAQ
- Make changes to the invoices it sends to insureds to clearly indicate the following:
- Insurance contributions deposited in the insurance fund, broken down into contributions
paid with vehicle registration and contributions paid with the driver’s license
- Additional contributions for any demerit points. The Panel of Experts believes that this
information could have a dissuasive effect on careless behavior
- Any other amounts collected in the form of fees or taxes and remitted to the government
or used for other purposes by SAAQ
Sales Tax on Insurance Contributions
Recommendation 12
The Panel of Experts recommends that the government
- Pass the necessary amendments to the Québec Sales Tax Act to exempt insurance
contributions collected by SAAQ from the 9% sales tax
Demerit Points
The Panel of Experts also suggests that SAAQ examine whether imposing an additional
contribution for each demerit point—rather than for groups of points, as is the case now—
could help dissuade careless driver behavior.
With regard to motorcycles, the Panel of Experts suggests that SAAQ conduct studies to
determine the fairest, most appropriate ways to take into account the behavior of
motorcyclists and, where applicable, the demerit points on their driving records.
An Incentive to Drive Safely and Respect the Highway Safety Code
The Panel of Experts suggests that between now and its next request for a rate increase,
SAAQ look into a system for rewarding safe drivers with a driver’s license renewal
“discount” based on how long they have maintained a safe driving record without any
demerit points.
Information: Sonia Corriveau
Optimum Public Relations
(418) 930-0094
Source: Pierre Noël
Communications Coordinator
Panel of Experts on Automobile Insurance Contributions
