Manitoba government favours private brokers over MPI in online service talks: NDP

The ongoing effort to resolve how to provide online insurance services for Manitobans — balancing the concerns of the provincial Crown corporation and private brokers — is reaching a boiling point.

The province this week ordered Manitoba Public Insurance (MPI) to find a conciliator to help in the negotiations with the Insurance Brokers Association of Manitoba (IBAM), which have been off-and-on for about eight months now.

"In recent weeks I have reports that there's been better discussion happening but we want to accelerate that process," Premier Brian Pallister said.

"They've arrived at a way of distributing insurance products in other provinces that works for the customers there and we have to do the same thing here. It's time to get it done."

NDP Leader Wab Kinew says the directive from the government essentially handcuffs MPI and favours the private brokers.

"Mr. Pallister has handed the brokers a veto in these negotiations," he said, calling the conciliation order "a bizarre decision" and "bad news for motorists."

MPI is within its rights to simply go around the brokers and move with online sales directly, Kinew says, but the Crown corporation has been working in good faith with IBAM to ensure the transition includes them.

IBAM is worried the shift to an online model — which may allow for basic transactions such as renewing auto insurance to be done online instead of in person with a broker — would exclude the services of insurance agents and result in job losses among the 2,600 people working for Manitoba's brokers.

MPI has estimated that if brokers had been left out of the online services, the impact to agents would be minimal, claiming online adoption of the simplest transactions would be low. Based on an estimated 20 per cent adoption rate, broker compensation would drop $40,000 — just 0.12 per cent of total compensation, according to MPI.

MPI has been trying to work with the brokers but the latest directive now puts IBAM in the driving seat, Kinew says.

"One of the preconditions that Mr. Pallister has now set is that, until there is a conclusion that the brokers agree with, MPI can't move anything online," he said.

"Effectively, what Mr. Pallister has done is he has handed this negotiation over to the insurance brokers and given them complete carte blanche to set whatever terms that they want."

Typically in a negotiation, each side knows they have to compromise but with Pallister's hard stance, MPI can't walk away, Kinew says, adding that as a result, IBAM knows MPI has zero leverage.

The brokers can set whatever terms they want "and know that they'll just be able to wait out MPI," he said.

One of the preconditions that Mr. Pallister has now set is that, until there is a conclusion that the brokers agree with, MPI can't move anything online. Effectively, what Mr. Pallister has done is he has handed this negotiation over to the insurance brokers and given them complete carte blanche to set whatever terms that they want.- NDP Leader Wab Kinew

The is also one-sided in the fact that IBAM is an independent organization and not bound to anything that comes out of conciliation, Kinew says, o IBAM can make all sorts of requirements on MPI but not the other way around. 

"It's very clear that Mr. Pallister and everyone in his government are in the pocket of the insurance brokers at this point," Kinew said.

"Whatever that comes out of this is essentially going to be the brokers setting their own terms and that means rates are going to go up."'

In a statement sent to CBC, MPI steered clear of the controversy.

"The corporation must follow the government's directive and we will continue to keep our customers' best interests at the forefront of any conciliation," the statement said

Crown Services Minister Colleen Mayer also sent a statement to CBC, saying "conciliation gives both parties the opportunity to come together to find a solution that benefits all Manitobans and is in everyone's best interest."

"We hope that an independent, third-party conciliator will be able to bring these parties together and find a resolution to this complex issue that gives Manitobans the options they deserve while respecting small businesses."