New insurance plan enters year two on a high

SARA MINOGUE

After a better-than-expected performance, the Nunavut Association of Municipalities has renewed the self-insurance program that some viewed as a last resort, but Iqaluit’s Chief Administrative Officer, Ian Fremantle, still has some reservations about the program.

The Nunavut Association of Municipalities insurance exchange, or Namix, was created last year to provide property, liability and auto insurance for municipal governments across Nunavut, in the face of skyrocketing premiums for normal forms of insurance.

At the time, Fremantle felt the program was “doomed to fail.”

Instead, there were few major losses last year, and municipal insurance premiums for 2004 have been almost cut in half.

The GN contributed $2 million to the original fund last year, while NAM members paid $682,000 in premiums. This year, NAM members will only pay $400,000, with new funding from the GN and former years’ surplus taking up the slack.

Only 23 per cent of the original funding went towards claims last year, leaving Namix with a 77 per cent surplus.

Dean Thibaudeau of Willis Canada, the insurance brokerage firm that works with Namix, says this puts the fund eight months ahead of where it was expected to be at this time.

Overall, premiums for the fund rose just 12 per cent. However, without a NAM board decision to contribute $100,000 from former year’s surpluses, NAM member premiums would have risen 24 per cent.

“We don’t have well-trained drivers, we don’t have good equipment, we don’t even have good mechanics and garage equipment, or even a good knowledge base. Unless we do something about our training, our equipment, our knowledge base, our hiring practices and even our driving habits, we’re going to be broke in two years,” Fremantle recalls saying to himself a year ago.

Now, he says, a lot has changed, thanks in part to Nunavut’s Municipal Training Organization, and new equipment.

The Namix technical advisory committee is working to reduce the risk of fires and other property damage. They held their first “loss control” workshop in Rankin Inlet last October, where senior administrative officer met with the Namix board to discuss ways to prevent property damage.

The same committee agreed to put $100,000 into additional training of municipal employees in the communities.

Better equipment and better training for fire departments will help curb losses, but Fremantle calls this a double-edged sword, saying that even with time, money and effort, many of the buildings are “beyond modernizing to today’s regulations.”

He says there is concern among SAOs that some municipal buildings inherited from the NWT were never properly inspected before the transfer.

A reappraisal last year resulted in a 26 per cent increase in insured property values.

The low number of fires last year were partly due to “a bit of luck,” Fremantle says.

Another concern is automobile liability claims.

While property losses and automobile damages were slight last year, auto liability claims cost Namix $805,000, more than twice the money earned in premiums.

Premiums for auto liability have gone up 35 per cent this year. That leaves a lot of work to be done to prevent accidents involving municipal drivers.

“We’ve still got a long way to go to bring our drivers up to speed,” Fremantle says. “We’ve got to change the driving habits, we’ve got to educate the public, we’ve got to get sidewalks, trails have got to separate the traveling public from the pedestrians, and then we’re also talking about putting in skidoo trails this summer.” he said of Iqaluit.

In the meantime, Namix is still the only made-in-Nunavut solution.

At the NAM annual general meeting in Pangnirtung this weekend, NAM president Lootie Toomasie and Minister of Community and Government Services Peter Kilabuk signed an agreement securing $1.5 million of the $4 million the GN will contribute to Namix over the next four years.

Signing the deal was one of Toomasie’s last acts as president of NAM. Coral Harbour mayor and former NAM president Johnny Ningeognan won the presidency by acclamation last Saturday.