Canadian Rental Service

Canadian Rental Association
CRA insurance reports 2012 surplus

March 11, 2013 - The Canadian Rental Association and Group Insurance Solutions have announced that the CRA Insurance Program has continued to perform well, resulting in another member-owned surplus. In April 2013, $712,732 will be returned to the participants of the CRA Insurance Program. This follows $1,616,319 of returns which have taken place since 2009.


March 11, 2013
By Caandian Rental Association

March 11, 2013 – The Canadian Rental Association and Group Insurance Solutions have announced
that the CRA Insurance Program has continued to perform well, resulting in another member-owned surplus. In April 2013, $712,732 will be returned to the participants of the CRA Insurance
Program. This follows $1,616,319 of returns which have taken place since 2009.

In a traditional insurance program, all participants’ premiums would stay with the insurer
that would be responsible for paying all claims. The insurers would also keep all of the remaining
premiums, regardless of how low claims were during the years. Under the CRA Insurance Program’s
PSI model, when claims are low, there is an opportunity for a return of premium.

The CRA’s PSI retains a large portion of all the premiums paid each year. Low levels of claims have
been experienced since the PSI structure was established on June 1, 2006. The preventative
measures that the rental dealers have made to reduce losses have helped keep claims low. The positive program results allowed members to establish the required $1,000,000 member-owned reserve that
may be needed to pay potentially large claims that may have occurred but have not been reported
until after the end of the term. (Note: Third party claimants have two years after an incident to report
a claim.)

The $1,000,000 reserve is maintained to ensure that the program has enough funds to pay for two
$500,000 claims (pool deductible) that may have been incurred but were not reported (IBNR). This
$1,000,000 IBNR reserve is only needed once. The $712,732 surplus is above the IBNR reserve and is
now available to be returned to the members of the PSIP.

Calculating the premium returns is simple. Returns are payable to those properties participating in the program at
the time of the premium return, based on the percentage of the total continuous program premiums
paid by the property in the previous three policy years compared to the total premium for the period.
This percentage is applied against the total amount of return premium.

Essentially, the longer a property has participated on the program, the greater its percentage of
entitled premium return. A rental dealer that has been a CRA Insurance program member
since June 1, 2009 will receive a premium return of approximately 21 per cent of annual premiums.

Cheques will be distributed during the first week of April to qualified members. Additional amounts will be returned in the future to then-qualifying properties as future surpluses are
accumulated.

Related links

www.crarental.org 

www.westernfgis.ca