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 of 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.

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 one's own vehicle (less a $700 deductible) and provides up to $200,000 in third-party liability coverage.

• SGI Canada operates similar to many insurance companies in the private sector. It competes with private sector companies throughout Saskatchewan (including Lloydminster, Alberta) offering such policies as house insurance and comprehensive automobile insurace. Unlike the Auto Fund, SGI Canada pays dividends to the government's Crown Insurance 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 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 or gender.

In 2003, SGI promoted its automobile insurance 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. In September of that year, the Fraser Institute used the SGI campaign to severely criticize public automobile insurance, asserting that SGI was effectively forcing good drivers to subsidize the cost of accidents caused by high-risk drivers. Critics of privatized automobile insurance counter that charging high premiums on young drivers places an unreasonable burden on those who often can least afford it.