Canadian Rental Service

Canadian Rental Association
Surplus to be returned to CRA insurance members

Oct. 5, 2009 – The CRA, HED Insurance and Risk Services have announced the Protected Self-Insurance Program has resulted in a surplus of $660,369 which will be returned to program members.


October 5, 2009
By Administrator

The Canadian Rental Association and HED Insurance and Risk Services are pleased to announce the first three policy years of the “Protected Self-Insurance Program" (PSIP) has resulted in a member-owned surplus of $660,369 which will be returned to program members.

“Protected Self-Insurance” vs. Traditional Insurance:

With traditional insurance, all of your premiums would stay with the insurer who would be responsible for paying all the claims, but would also get to keep all of the leftover premiums, no matter how low claims were during the years.

The “Protected Self-Insurance Program" (PSIP) retains a large portion of the annual premium in a member-owned Loss Pool to pay the first part of any claim up to $500,000.
The remainder of the premium is used to cover expenses and to purchase insurance for losses that exceed $500,000 for any one loss and to coverage any losses that may exceed the loss pool for the term so that there can never be a deficit in the PSIP.

The CRA PSIP program has experienced low levels of claims since it was established on June 1, 2006. The preventative measures that the rental dealers have made has helped keep claims low. The good program results allowed the 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 are not reported (IBNR) until after the end of the term.  The $660,369 surplus above the IBNR reserve is now available to be returned to the members of the PSIP program.

How are premium returns calculated?

Returns are payable to those rental dealers participating in the Program at the time of the premium return, based on the percentage of the total program premiums paid by the dealer in the previous three policy years (but not, dating back past the June 1, 2006 program inception date) compared to the total premium for the period.

This percentage will be applied against the total amount of return premium.
A property that has been in the program since inception will receive a greater amount of returned premium than a new participant.

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A rental dealer that has been a program member since inception will receive a return premium of approximately 10 % of their total premium for three years.

Read all the details in the upcoming December issue!