34
Proposal for 2016-2018 1 INSURANCE CONTRIBUTIONS
Proposal for
2016-2018
22222222222266666688868668668668611111111121221221221221221221221221261661661626212622621262 INSURANCECONTRIBUTIONS
C-5
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INSURANCECONTRIBUTIONS
Proposal for
2016-2018
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Direction des communicationsNovember 2014Legal deposit – 4th quarter 2014Bibliothèque et Archives nationales du Québec
ISBN (printed version) 978-2-550-71978-6ISBN (PDF version) 978-2-550-71979-3
© 2014, Société de l’assurance automobile du Québec
Insurance Contributions – Proposal for
2016-2018
Message from the Chair of the Board of Directors _ _ _ _ _ _ _ _ _ _ _ _ 5Message from the President and Chief Executive Officer _ _ _ _ _ _ _ 7
INTRODUCTION _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ 9
CHAPTER 1 The Automobile Insurance Plan for Quebecers _ _ _ _ _ 10�� The Origins of the Plan 10
�� Its Guiding Principles 11
�� The Model’s Strength 12
�� Its Financial Indicators 12
CHAPTER 2 Changes in the Financial Situation Since 2004 _ _ _ 13�� The Findings in 2004: A Disconcerting Financial Situation 13
�� The Financial Situation as of December 31, 2010 14
�� The Financial Situation as of December 31, 2013 15
�� Projections for 2014-2015 16
�� Funding 16
CHAPTER 3 Insurance Contributions 2016-2018 _ _ _ _ _ _ _ _ _ _ _ _ 17�� Insurance Contributions 2016-2018 19
Passenger Vehicles 19�– Driver’s Licence (Class 5) 19�– Vehicle Registration 19
Motorcycles 20�– Driver’s Licence (Class 6 only) 20�– Driver’s Licence (Classes 5 and 6) 21�– Vehicle Registration 21
Other Vehicles 22�– Vehicle Registration 22
CHAPTER 4 Striking a Fair Balance over the Long Term _ _ _ _ _ _ _ 23
CONCLUSION _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ 27
APPENDICES _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ 29
Tab3
M
5
MMESSAGE from the Chair of the Board of Directors
Over the last year, the analyses conducted by the Société de l’assurance automobile du Québec Board of Directors and the decisions it has made have been based on the management principles that govern the Fonds d’assurance automobile and build on the turnaround process that was initiated in 2004.
The Board is of the opinion that the proposal presented in this discussion document will ensure the sustainability of the public automobile insurance plan.
On behalf of the Board, I hereby submit the draft regulation respecting insurance contributions to the Panel of Experts on automobile insurance contributions and invite you to take part in the public consultations that will be held to discuss the issue.
Your comments and suggestions will be examined carefully.
Guy MorneauChair of the Board of Directors
M
M7
MESSAGE from the President and Chief Executive Officer
Thanks to an unprecedented collective effort, the Société de l’assurance automobile du Québec (SAAQ) is proud to intro-duce the proposed insurance contributions for 2016-2018. Nearly all motorists and vehicle owners will see reductions of up to 35% – which represents annual savings in the order of $394 million – thus driving home the notion that “Être prudent, c’est payant!” [caution pays off!].
Remarkable progress has been made since 2004, when a significant turnaround process was required to ensure the plan’s sustainability. The results have far exceeded our predictions thanks to an ever-improving road safety record, a review of our compensation practices, adjustments to insurance contributions and revenue derived from investments.
In 2011, the initial results began to appear. Notwithstanding the annual indexation, insurance contribution rates have remained unchanged, and some contributors even saw reductions. This enabled us to continue eliminating the plan’s accumulated deficit, which totalled $1.6 billion at the time.
Since then, the financial situation has continued to improve. By December 31, 2013, the accumulated deficit had been completely eliminated, ten years earlier than expected. The plan even recorded an accumulated surplus of $658 million.
The plan’s financial strength has been completely re- established, thereby ensuring that its commitment to traffic accident victims can be met on a long-term and sustainable basis.
I invite you to learn about the insurance contributions proposed by the SAAQ for 2016-2018. They will be subject to public consultations by the Panel of Experts, which will issue its recommendations in late spring 2015.
Our work, however, does not stop there. It is essential that we continue our efforts to improve the road safety record. The SAAQ will continue to innovate and search for new incentives to encourage all road users to adopt safe behaviour.
Nathalie Tremblay, FCPA, FCAPresident and Chief Executive Officer
In rINTRODUCTION
9
Financial management of the public automobile insurance plan is carried
out with a long-term perspective1 and is influenced by a combination
of factors, the most significant of which are the road safety record and
economic conditions. The plan must therefore be periodically reviewed to
make sure it remains both stable and fair for traffic accident victims, as
well as vehicle drivers and owners.
In the 2011 review, the SAAQ set contribution levels until December 31,
2015. The purpose of this discussion document is to take stock of the plan’s
financial situation and propose the insurance contributions for 2016-2018.
This document provides an overview of the changes in the plan’s financial
situation since 2004, followed by a presentation of the proposed insurance
contribution rates for 2016-2018 and concludes with an overview of the
work the SAAQ will undertake to go even further in its efforts to improve
the road safety record.
1. The principles set forth in the Sustainable Development Act were taken into consideration in the insurance contribution review.
orINTRODUCTION
1THE ORIGINS OF THE PLAN
The Automobile Insurance Act came into force on March 1, 1978.
The government thereby put an end to the many deficiencies generated
by the automobile insurance situation in Québec:
�� The plan, based on fault, did not compensate all accident victims and was very expensive.
�� Fault was difficult to establish.
�� Claim settlement times were too long.
�� Damages were poorly compensated.
�� Compensation awarded by the courts did not guarantee that accident victims would enjoy a long-term standard of living that was comparable to their situation before the accident.
In addition, 28% of traffic accident victims did not receive any
compensation, because:
�� they could not afford legal proceedings;
�� the guilty driver was insolvent; or
�� the amounts they were awarded only covered their legal fees.
1CHAPTER 1 The Automobile Insurance Plan for Quebecers
INSURANCE CONTRIBUTIONS
2016-2018
11
1In 1977, 25% of drivers were uninsured. In today’s numbers, this would represent 1.2 million people.
The Société de l’assurance automobile du Québec was given the mandate to manage the plan, the advantages of which have greatly outnumbered the disadvantages for over 35 years. As proof, it has often served as a model for other jurisdictions, such as Manitoba, Saskatchewan and Australia.
ITS GUIDING PRINCIPLES
The plan is:
�� Simple: The only criterion to be eligible for compensation is to establish a connection between bodily injuries and a traffic accident.
�� Universal: All Quebecers are eligible, regardless of fault, whether the accident occurred in Québec or elsewhere in the world.
�� Efficient: The SAAQ immediately takes charge of accident victims and remains with them, if need be, throughout their entire life.
�� Cost-effective: Contributions (the equivalent of premiums in private plans) are the lowest in Canada.
The plan makes it possible, through indemnities, to compensate economic loss caused by an accident. Non-economic losses, such a diminished quality of life as a result of an accident, are also compensated. Moreover, the SAAQ takes the necessary measures to contribute to traffic accident victims’ rehabilitation to help them resume their daily activities and return to the labour market. Appendix A presents the main indemnities provided by the automobile insurance plan.
1
12
THE MODEL’S STRENGTH
The SAAQ’s business model is unique. It encompasses prevention, control over access to the road network, control of the transportation of people and goods and compensation to traffic accident victims. This model allows Quebecers to benefit from a very advantageous public insurance plan. According to the Insurance Bureau of Canada, Québec already has the lowest average automobile insurance premium for passenger vehicles in the country2. In addition, Québec has the lowest administrative cost per dollar of compensation paid compared to four other Canadian bodies (see Appendix B).
ITS FINANCIAL INDICATORS
The plan’s financial situation can be assessed on the basis of two indicators:
1. The financing ratio
The financing ratio indicates whether the annual revenue for a given year is sufficient to cover the costs for that same accident year.
2. The funding ratio
The funding ratio indicates whether assets are sufficient to cover the indemnities to be paid out to traffic accident victims in the future, including management costs.
2. Source: Evolution of the Average Written Premium for Private Passenger Automobiles (all types of risk combined, excluding farm-ers, commercial automobiles and all terrain vehicles), prepared by Bernard Marchand, Government Affairs Advisor, IBC-Québec, Ref./No.: 930.09.01, October 2013.
2213
THE FINDINGS IN 2004: A DISCONCERTING FINANCIAL SITUATION
�� The road safety record had been deteriorating since 2000, with an alarming annual average of nearly 700 fatalities, 4,000 serious injuries and 44,000 minor injuries.
�� The Service aux accidentés had long case processing times, which generated a high volume of complaints and longer disability periods.
�� Although indemnities continued to be indexed to the cost of living every year, insurance contributions had remained unchanged for 20 years.
�� The plan was under-financed, since revenue for a given year was insufficient to cover accident-related expenses for that same year. This annual under-financing of nearly $500 million resulted in a financing ratio of 59%.
�� The plan was under-funded for the first time in its history. The funding ratio had fallen to 92%, which meant that for every dollar paid to accident victims, only 92 cents were available in the Fonds d’assurance automobile.
CHAPTER 2Changes in the Financial Situation Since 2004
14
If no structural actions had been taken, the Fonds would have dried up in 2018 and been faced with a commitment to pay $15 billion in indemnities to traffic accident victims. The plan’s sustainability was threatened – a turnaround was essential.
In 2004, the government made a significant move: it created the Fonds d’assurance automobile du Québec. With the creation of this fund, insurance contributions became a trust patrimony distinct from other government activities. In addition, the SAAQ was required to eliminate under-financing by the end of 2015. It was also required to eliminate any deficit within 15 years, and to submit any amendments to insurance contributions to an independent panel of experts for public consultations.
The strategy that was adopted aimed to end under-financing and
subsequently tackle under-funding by undertaking actions targeting three
main areas:
�� The road safety record, by bringing it back down to 2001 levels (2001 was the best year before 2004).
�� The costs of the plan, by both controlling the increasing costs and improving the quality of service through a review of compensation practices so as to reduce processing times, modulate services to better adapt them to client needs, ensure better management of disability periods and, ultimately, help accident victims return to their pre-accident activities.
�� Insurance contributions, by introducing gradual increases over a three-year period, with annual indexation, while making sure the contributions reflect a direct connection with the results of the road safety record.
THE FINANCIAL SITUATION AS OF DECEMBER 31, 2010
Results of road safety record improvements and the compensation practices review began to emerge as of December 31, 2010. The Fonds d’assurance automobile recorded a financing surplus of $207.1 million, as a result of which the financing ratio climbed to 122%. The under-financing problem was thus settled, well before the 2015 deadline set forth by law.
However, the plan was still underfunded. In 2008, the Fonds d’assurance posted an accumulated deficit of $2.7 billion, for a funding ratio of 69%, as a consequence of the financial crisis.
INSURANCE CONTRIBUTIONS
2016-2018
15
The SAAQ was required to eliminate this deficit by 2023 at the latest. It was therefore decided to use the financing surplus to solve the under-funding problem. A portion of the insurance contribution paid by passenger vehicle owners and driver’s licence holders was therefore assigned to recapitalization efforts in 2013, 2014 and 2015. This explains the drop in the financing ratio starting in 2013.
THE FINANCIAL SITUATION AS OF DECEMBER 31, 2013
As of December 31, 2013, the Fonds d’assurance automobile posted a $1.1 billion dollar surplus. This result, which exceeded expectations, allowed the $2.7 billion dollar accumulated deficit recorded in 2008 to be eliminated 10 years ahead of schedule and to secure an accumulated surplus of $658 million, for a funding ratio of 108%.
Of these gains, $1.2 billion can be attributed to the road safety record, $1 billion to the review of compensation practices for the benefit of accident victims, and $1.2 billion to investment revenue.
Changes in the Financial Situation from 2004 to 2013
59% 60% 63% 68% 87% 104% 122% 139% 139% 131%
92% 95% 99% 97% 69% 72% 82% 89% 95% 108%
50
60
70
80
90
100
110
120
130
140
150
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
0
10,000
20,000
30,000
40,000
50,000
60,000
FINANCINGRATIO
FUNDING RATIO
2005 2006 2007 2008 2009 2010 2011 2012 20130
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
DEATHS
SERIOUS INJURIES
MINOR INJURIES
LICENCEHOLDERS
VEHICLESIN OPERATION
707 720 604 556 503 488 475 421 399
4,000 3,718 2,818 2,315 2,201 2,293 2,020 1,955 1,727
47,455 46,037 44,422 41,128 40,723 41,043 39,402 37,114 35,972
4,777,429 4,841,176 4,909,380 4,973,573 5,027,848 5,105,623 5,156,353 5,194,760 5,241,864
5,306,534 5,402,353 5,539,013 5,665,272 5,778,947 5,913,950 5,985,463 6,082,303 6,191,286
16
PROJECTIONS FOR 2014-2015
Based on a road safety record that upholds 2013 performance levels and predictions from the Caisse de dépôt et placement du Québec, the SAAQ expects the financing and funding ratios to continue to improve, as illustrated below:
2014 2015
Financing ratio 118% 118%
Funding ratio 113% 118%
FUNDING
Since full funding has been achieved, the SAAQ must now determine the funding ratio to maintain in order to ensure the plan’s long-term financial strength. The practice among public insurance companies is to target a funding ratio that exceeds 100% (see Appendix C). The SAAQ has therefore concluded that it would be appropriate to maintain a funding ratio between 100% and 120%.
This means that a funding ratio below 100% could require an additional insurance contribution to recapitalize the plan, whereas a ratio above 120% could result in lower contributions for vehicle owners and drivers.
3317
The proposed insurance contributions for 2016-2018 take into account the fact that the portion of contributions assigned to recapitalizing the plan will no longer be required as of 2016 for all classes of contributors, as a result of the plan being fully funded.
They were determined as a result of an expert actuarial assessment and
based on the same principles and conditions as the contributions set in
2006 and 2011, namely:
�� Self-financing: rates determined in such a manner as to ensure full financing for each new accident year.
�� Risk: The contribution level for each contributor category is determined on the basis of the risk of being involved in an accident with bodily injury.
�� A call for caution by encouraging good behaviour.
�� Stability: balancing stable insurance contributions with a financially strong Fonds d’assurance.
�� No discrimination on the basis of age, sex and region.
�� Dividing the cost of an accident equally among the vehicles involved.
�� An annual increase limit of 15%.
CHAPTER 3Insurance Contributions 2016-2018
18
The insurance contributions also take into account variations in the frequency and severity of accidents in recent years. Although the frequency of accidents has dropped for all vehicle categories, some have seen an increase in the severity of accidents, which has generated an increase in the average cost of accidents that can be attributed to those categories and, in turn, increased contributions applied to vehicle registration fees.
Furthermore, for motorcyclists, the SAAQ must take into account two new
factors in the determination of contributions:
1. Since the road safety record of motorcycle driver’s licence holders evolves differently than that of passenger vehicle driver’s licence holders, a contribution specific to each class of contributors is proposed.
2. The appearance of new vehicles on our roads must also be considered in the determination of contributions. Electric motorcycles are a new reality to which the SAAQ must adjust. The current classification system for motorcycles includes four classes defined by cylinder capacity in cubic centimetres (cc) for gasoline- powered motors, whereas the power rating of an electric motorcycle is measured in kilowatts (kW). The SAAQ has therefore drafted an equivalency table on the basis of which it proposes to determine insurance contribution rates for electric motorcycles.
kW (nominal) Cylinder Capacity (cc)
Over 35 kW Over 400 cc
12 kW to 35 kW 126 cc to 400 cc
11 kW and under 125 cc or under
INSURANCE CONTRIBUTIONS
2016-2018
19
INSURANCE CONTRIBUTIONS 2016-2018
The proposed insurance contributions for 2016 are presented below. Unless indicated otherwise, contributions for 2017 and 2018 are indexed 2016 contributions.
Passenger Vehicles
Driver’s Licence (Class 5)
The insurance contribution for passenger vehicle driver’s licence holders
would be adjusted as follows:
LICENCE Contribution ($) 2015
Contribution ($)2016
Difference ($)
Number of licence
holders
REGULAR AND PROBATIONARY
With no demerit points 64 55 -9 4,192,100
1 to 3 demerit points 101 90 -11 927,800
4 to 6 demerit points 134 124 -10 255,300
7 to 9 demerit points 179 151 -28 78,100
10 to14 demerit points 205 169 -36 39,100
15 or more demerit points 422 324 -98 8,500
LEARNER DRIVER 23 18 -5 261,300
RESTRICED LICENCE* 120 112 -8 7,700
* Licence that only authorizes driving a vehicle equipped with an alcohol ignition interlock device.
Vehicle Registration
The insurance contribution for passenger vehicle owners would be
adjusted as follows:
Contribution ($)2015
Contribution ($)2016
Difference ($) Number of renewals
120 64 -56 4,818,700
-$65
20
MotorcyclesDriver’s Licence (Class 6 only)
The insurance contribution for motorcycle driver’s licence holders
would be adjusted as follows:
LICENCE Contribution ($)2015
Contribution ($)2016
Difference ($)
Number of licence
holders
REGULAR AND PROBATIONARY
With no demerit points 64 62 -2
Fewer than 500
1 to 3 demerit points 101 99 -2
4 to 6 demerit points 134 133 -1
7 to 9 demerit points 179 179 0
10 to 14 demerit points 205 206 0
15 or more demerit points 422 423 +1
LEARNER DRIVER 23 20 -3 38,700
INSURANCE CONTRIBUTIONS
2016-2018
21
Driver’s Licence (Classes 5 and 6)
The insurance contribution for holders of both a motorcycle driver’s licence
and a passenger vehicle driver’s licence would be adjusted as follows:
LICENCE Contribution ($)2015
Contribution ($)2016
Difference ($)
Number of licence
holders
REGULAR AND PROBATIONARY
With no demerit points 128 117 -11 324,600
1 to 3 demerit points 202 189 -13 104,900
4 to 6 demerit points 235 223 -12 34,600
7 to 9 demerit points 280 250 -30 11,300
10 to 14 demerit points 306 268 -38 5,700
15 or more demerit points 523 423 -100 1, 100
Vehicle Registration
A phenomenon has been noted in this vehicle category that reduces the effect of the improved road safety record on insurance contributions: 65% of motorcycle driver’s licence holders do not own a motorcycle. Only 35% do.
Every year, more and more of these drivers who do not own a motorcycle give up Class 6 (motorcycle) and are thus no longer required to pay the corresponding insurance contribution. This increases the financing portion to be covered by licence holders who do own a motorcycle.
The insurance contribution for motorcycle owners would therefore be
adjusted as follows:
CATEGORY Contribution ($)2015
Contribution ($)2016
Difference ($)
Number of renewals
125 cc and under (11 kW and under)
185 179 -6 2,700
126 cc to 400 cc (12 kW to 35 kW)
286 329* +43 12,400
Over 400 cc (over 35 kW)
480 476 -4 166,300
High-risk 1,006 1,154 +148 9,600
Restricted-area use 184 79 -105 3,400
* For motorcycles with a cylinder capacity of 126 cc to 400 cc, the SAAQ applied the 15% increase limit. Therefore, a contribution of $329 would be collected in 2016 and an indexed contribution of $335 would be collected in 2017.
-$15
22
Other VehiclesVehicle Registration
Vehicle category
Classification Contribution ($)
2015
Contribution ($)
2016
Difference ($)
Number of renewals
Bus City bus (ATUQ members)
1,589 1,637 +48 4,000
School bus 174 152 -22 10,900
Other 10,000 kg and under
263 165 -98 3,700
Over 10,000 kg 663 763* +100 1,300
Truck Truck, other than government or government body truck
2 axles 142 103 -39 57,700
3 or 4 axles 236 167 -69 36,100
5 or more axles 376 291 -85 43,900
Government or recognized government body truck; farm vehicle over 3,000 kg
2 axles 118 85 -33 2,500
3 or 4 axles 151 109 -42 2,600
5 or more axles 208 171 -37 1,800
Restricted-area use
Other than a motorcycle
48 30 -18 3,200
Moped/motorized scooter
260 247 -13 35,300
Vehicle operated under a territorial licence
Other than a passenger vehicle
117 75 -42 1,100
Dealer plate 157 125 -32 16,500
Taxi 645 718 +73 9,100
Farm tractor 26 17 -9 144,300
Commercial vehicle (F plate)
Other than a farm vehicle
140 85 -55 518,500
Farm vehicle 3,000 kg and under
130 86 -44 23,330
* For other buses weighing more than 10,000 kg, the SAAQ applied the 15% increase limit. Therefore, a contribution of $763 would be collected in 2016, $877 in 2017 and $1,009 in 2018.
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The analysis conducted by the SAAQ in 2014, based among other things on trends in the insurance industry, both private and public, as well as the recommendations of the Panel of Experts in 2006 and 2011, have led it to confirm that the plan’s management must strike a fair and long-term balance among the road safety record, services provided to accident victims and insurance contribution rates.
PROVIDING SERVICES TO TRAFFIC ACCIDENT VICTIMS
The SAAQ has always been committed to providing high-quality services to its clientele, with the goal of helping accident victims resume their pre-accident activities. It will thus continue to manage claims in accordance with the improvements that have been implemented since 2006 and to further develop the coverage provided by the plan.
CHAPTER 4 Striking a Fair Balance over the Long Term
24
CONTINUING TO IMPROVE THE ROAD SAFETY RECORD
For over 35 years, the government of Québec, the SAAQ and all road safety partners have acted upon three levers to urge road users to adopt safe behaviour: raising awareness, legislation and monitoring.
From 2005 to 2013, all parties intensified their efforts through innovative awareness-raising campaigns, more severe legislative measures and increased monitoring on our roads. As a result of these actions, Québec’s road safety record for 2013 was the best it had been in 68 years.
Road Safety Record 2005-2013
59% 60% 63% 68% 87% 104% 122% 139% 139% 131%
92% 95% 99% 97% 69% 72% 82% 89% 95% 108%
50
60
70
80
90
100
110
120
130
140
150
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
0
10,000
20,000
30,000
40,000
50,000
60,000
FINANCINGRATIO
FUNDING RATIO
2005 2006 2007 2008 2009 2010 2011 2012 20130
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
DEATHS
SERIOUS INJURIES
MINOR INJURIES
LICENCEHOLDERS
VEHICLESIN OPERATION
707 720 604 556 503 488 475 421 399
4,000 3,718 2,818 2,315 2,201 2,293 2,020 1,955 1,727
47,455 46,037 44,422 41,128 40,723 41,043 39,402 37,114 35,972
4,777,429 4,841,176 4,909,380 4,973,573 5,027,848 5,105,623 5,156,353 5,194,760 5,241,864
5,306,534 5,402,353 5,539,013 5,665,272 5,778,947 5,913,950 5,985,463 6,082,303 6,191,286
INSURANCE CONTRIBUTIONS
2016-2018
25
There is no doubt that road safety has become a societal issue. Significant gains have been achieved. However, countries such as Sweden, Great Britain and the Netherlands post better performances than Québec (see Appendix D). Further efforts are therefore required to reduce the number and severity of accidents on our roads.
Insurance Contributions: A Fourth Lever to Promote Road Safety
With a view to using insurance contributions as a fourth lever, the SAAQ intends to move closer to industry practices in both the public and private sectors to determine insurance contributions. It will therefore focus its efforts on finding ways to further recognize good driver behaviour in the calculation of insurance contributions.
The current demerit point system aims to penalize unsafe behaviour. The SAAQ requires offending drivers to pay an additional insurance contribution determined on the basis of the risk that corresponds to the number of demerit points entered in their driver’s record. The SAAQ will therefore examine the possibility of reviewing the demerit point system in order to recognize good behaviour while continuing to penalize bad behaviour.
In addition, property damage insurers take into account, among other things, a safety rating issued by the Commission des transports du Québec to set rates for heavy vehicle fleets. The SAAQ will therefore evaluate the possibility of considering this rating in the determination of insurance contributions for heavy vehicle owners and operators.
Assessing the Potential of Telematic Technology
The use of telematics is increasingly widespread in the insurance market across North America. By providing drivers with a periodic report on their driving habits, this new technology gives them the tools they need to target their at-risk behaviours and make the necessary adjustments to reduce the risk of accidents.
The SAAQ also recognizes this technology’s potential for road safety and has already taken preliminary steps to implement a pilot project, as of 2016, to test telematics with road users on a voluntary basis. The terms and conditions for this project will be known in 2015.
This is another step forward toward meeting the SAAQ’s goal of providing ways to reduce the frequency and severity of accidents. The results of this project will reveal whether the anticipated effect will have materialized. The SAAQ will subsequently determine the appropriate course of action.
c luoncCONCLUSION
27
The SAAQ has conducted a comprehensive examination of the financial
situation of Québec’s public automobile insurance plan, which is fully
financed and funded.
The course it has charted and the insurance contributions it proposes as a
fourth lever to urge road users to adopt safe behaviour should lead to further
improvements in the road safety record and ensure the plan’s sustainability.
The contributions are a source of financing that is directly related to the
performance of the road safety record and intended to cover the costs of the
automobile insurance policy for bodily injury for all Quebecers.
The SAAQ believes that its proposal is fair and reasonable. It remains,
however, open to a reworking of the proposal and new ideas. In that spirit,
all interested members of the public are encouraged to take part in the public
consultations that will soon be held by the Panel of Experts on automobile
insurance contributions.
luncCONCLUSION
A
APPENDICESA29
A. Main Indemnities Provided by the Public Automobile Insurance Plan
B. Administrative Cost per Compensation Dollar Paid – Comparison with Comparable Canadian Bodies
C. Funding Ratios Targeted by Public Insurance Plans for Bodily Injury
D. Comparison of the Death Rate per 100,000 Inhabitants
30
APPENDIX A
Main Indemnities Provided by the Public Automobile Insurance PlanIndemnities for Accidents that Occurred Between January 1, 2014 and December 31, 2014
Indemnities Amounts
Income replacement indemnity (1) 90% of net income, calculated on the basis of a gross annual income not exceeding $69,000
Indemnity for care expenses Weekly maximums:
$414 for 1 person
$464 for 2 people
$513 for 3 people
$564 for 4 or more people
Lump-sum indemnity for students (2) $4,957 per school year lost at the elementary level
$9,096 per school year lost at the high school level
$9,096 per term lost at the post-secondary level, up to $18,192 per year
Lump-sum indemnity for after-effects such as loss of enjoyment of life, mental suffering and pain
Maximum of $231,956
(1) When an accident victim who already receives an income replacement indemnity reaches the age of 65, the indemnity is reduced by 25% on that day, by 50% on the 66th birthday, by 75% on the 67th birthday and ceases being paid altogether on the 68th birthday.
(2) Starting on the scheduled date of completion of studies, students may be entitled to receive an indemnity based on $41,810, which corresponds to the average earnings of Québec workers for the year in progress.
INSURANCE CONTRIBUTIONS
2016-2018
31
Types of expenses Amounts
Care expenses Weekly maximums:
$125 for 1 person
$165 for 2 people
$210 for 3 people
$249 for 4 or more people
Personal home assistance A weekly maximum of $828 for an accident victim whose state of health requires continuous care
Availability allowance $35 maximum for availability of 4 hours or less
$70 maximum for availability of more than 4 hours
Clothing $400 maximum for cleaning, repair or replacement
$1,000 maximum for leather clothing or a helmet worn in a motorcycle accident
Contact lenses $110 for replacement
$300 maximum for purchase
Eyeglasses $100 for the frames and the actual cost of lenses
Medical reports $25 maximum for a Physician’s Report (3)
$25 maximum for an Initial Medical Report (4)
$70 maximum for a Medical Assessment Report (4)
$70 maximum for a Medical Progress Report (4)
$65 maximum for a Medical After-Effects Report (4)
Professional fees $36 maximum per prescribed treatment for physiotherapy and occupational therapy
$31 maximum per prescribed treatment for chiropractic care
$26 maximum per prescribed treatment by acupuncture
$86.60 maximum per prescribed treatment for psychotherapy
For fees of other professionals, contact our call centre.
Substitute labour costs for a family business Weekly maximum of $826 with supporting documents for the first 180 days after the accident
Medication To be determined on presentation of invoices or receipts
Prostheses, orthoses, etc. To be determined on presentation of invoices or receipts, in accordance with the maximum amounts prescribed by regulation
(3) The SAAQ stopped requesting the Physician’s Report (Schedule 1) on May 20, 2010.
(4) This report has been used by the SAAQ since May 20, 2010.
32
APPENDIX B
Administrative Cost per Compensation Dollar Paid - Comparison with Comparable Canadian Bodies
Year SAAQ Average of comparable
bodies
SAAQ ranking
2012 15% 23% 1st/5
2011 13% 24% 1st/5
2010 13% 29% 1st/5
APPENDIX C
Funding Ratios Targeted by Public Insurance Plans for Bodily Injury1
Jurisdiction Targeted funding ratio
Alberta Between 114% and 128%
British Columbia Between 105% and 133%
Manitoba Between 112% and 132%
Newfoundland and Labrador Between 100% and 120%
Northwest Territories Between 108% and 120%
Prince Edward Island Between 120% and 130%
Saskatchewan Between 138% and 153%
Yukon Between 122% and 128%
1. Since the other Canadian public automobile insurance plans cover both bodily injury and property damage, the SAAQ used the public plans that cover workplace accidents as comparables.
APPENDIX D
Comparison of the Death Rate per 100,000 Inhabitants*
Great Britain 2.8
Sweden 3.0
Netherlands 3.9
Québec 5.2
* Data from 2012.
Note: The rate for Québec was 4.9 in 2013.
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