SUBSIDY SCANDAL
The Insurance Bureau of Canada (IBC) reports that Alberta’s ‘good’ drivers are being forced to pay auto insurance premiums to subsidize high-risk drivers. Using data from a Deloitte LLP report, the IBC has said that it discovered that the province’s worst drivers have been offered subsidized insurance rates for 20 years.
Notably, the agency says that under Alberta’s grid rating system, high-risk drivers are offered a cap on the amount of premiums they would be required to pay.
To collect its data, Deloitte LLP’s report looked at seven medium to large-sized insurers that make up approximately 80 percent of the private passenger vehicle auto-insurance market in Alberta and then investigated the demographic profiles of drivers capped by grid premiums. The IBC then analyzed the cost subsidy these drivers receive and the difference between an insurer’s premium and the grid premium when the latter was the lesser of the two. As a result, the Deloitte LLP report found that ‘safe’ drivers are charged $180 million in auto insurance premiums—or $65 per person—to subsidize the premiums of high-risk drivers.
The report also found that Alberta’s worst drivers are being offered average annual subsidies of $9,859. The IBC suggests that the grid system, first put in place in 2004 to help new drivers access affordable premiums, should be removed or “substantially reformed” to help reduce the number of drivers who the system was not designed to help.
COLLISION KINGS SETS SALE
Alberta-based multi-shop operator (MSO) Collision Kings has launched a sale and investment solicitation process after the company sought and obtained protection under the Companies’ Creditors Arrangement Act (CCAA) pursuant to an order granted by the Court of King’s Bench of Alberta. FTI Consulting Canada was appointed as Monitor for the CCAA proceedings, which will see the Collision Kings Group sell all or part of its business, property, assets and undertakings.
The Collision Kings Group operates 10 collision repair facilities and two CARSTAR branded intake centres and mechanical shops. The collision facilities are: CARSTAR Calgary Royal Oak, CARSTAR Calgary Sunridge, CARSTAR Calgary East Lake, CARSTAR Calgary Burnsland, CARSTAR Calgary Downtown, CARSTAR Lloydminster City Centre Auto Body, CARSTAR Grand Prairie Don Golden, Nick’s Collision and Glass Repair and Bunzy’s Auto Body; and the two intake centres and mechanical shops are: CARSTAR Calgary Inglewood Appraisal Centre and CARSTAR Calgary Foothills.
The sale and investment solicitation process will include an initial bid—a stalking horse bid—for certain assets of the Group to set a low-price limit for prospective bidders and ensure continuity of operations through the process. The deadline to submit a binding offer to purchase was March 8, 2024.
Collision Kings launches sale and investment solicitation process to sell all or part of Alberta-based MSO
