Saskatchewan Government Insurance

Saskatchewan Government Insurance or SGI is a crown corporation owned and operated by the Government of Saskatchewan.

The company was founded in 1945 by the newly-formed Co-operative Commonwealth Federation government under Premier Tommy Douglas. It was created to allow the CCF government to nationalize the province's automobile insurance industry. Since its inception, SGI has held a monopoly on basic automobile insurance coverage in Saskatchewan.

In the early 1990s, the Progressive Conservative government under Premier Grant Devine proposed privatizing SGI. The plan met with fierce opposition, however, and the Tories were not able to carry out the proposal prior to defeat in the 1991 general election by the New Democrats under Roy Romanow. The privatization of SGI was an issue once again during the 2003 general election campaign.

Under Romanow, SGI switched to a no fault claims system, which was perceived as an unfair system by some. These critics were further infuriated when SGI used what they perceived as taxpayers' money to run a series advertisements promoting no fault insurance. In 2003, however, SGI went to some length to appease its detractors by allowing policy holders to opt out of the no fault system. Those who have opted out are back under the traditional tort system.

As of 2004, the company is divided into three distinct operations:

• The Saskatchewan Auto Fund is the financial backing for the province's compulsory automobile insurance program. It is supposed to operate on a break-even basis over time and does not pay dividends to the provincial government. SGI's basic automobile insurance policy insures the policy holder's own vehicle (less a $700 deductible) and provides up to $200,000 in third-party liability coverage.

• SGI Canada operates in a manner similar to many insurance companies in the private sector. It competes with private sector companies throughout Saskatchewan (including Lloydminster, Alberta). Unlike the Auto Fund, SGI Canada pays dividends to the government's Crown Investment Corporation (CIC), which passes the funds on to the General Revenue Fund.

• SGI Canada Insurance Services Ltd. (SCISL) offers policies similar to those offered by SGI Canada outside Saskatchewan. It currently operates in Manitoba, Ontario and Prince Edward Island and pays dividends to the CIC.

SGI also operates 20 claims centres and five vehicle salvage operations in Saksatchewan.

Perhaps more significantly, SGI also administers driving examinations and issues Saskatchewan driver's licences, vehicle registrations and licence plates. In fact, the vehicle registration, licence plate and basic insurance policy are sold as one package and once registered, the vehicle can be driven by anyone with a valid licence without compromising the insurance coverage. A poor driving record will not affect the cost of the vehicle registration or basic insurace - instead, SGI will charge a higher premium for the driver's licence, which must be renewed annually. The cost of the licence is not affected by the driver's age, gender or driving experience.

In 2003, SGI promoted its automobile insurance system with advertisements contrasting the cost for a young driver to purchase its basic insurance policy compared with similar policies purchased in Calgary, Toronto and Vancouver. The campaign was attacked by some critics as thinly veiled, taxpayer-funded NDP advertising on the eve of an election campaign. (After the writ was dropped, the NDP paid for a separate series of ads that specifically and aggressively criticized Alberta's privatized automobile insurance system.)

In addition, the Fraser Institute used the SGI campaign to severely criticize SGI and public automobile insurance in general, asserting that SGI was effectively forcing good drivers to subsidize the cost of accidents caused by high-risk drivers. Critics of the privatized system counter that charging high premiums on young drivers places an unreasonable burden on those who often can least afford it.

External link

• Saskatchewan Government Insurance (http://www.sgi.sk.ca)