The board of Manitoba Public Insurance will turn over all of its online services to insurance brokers in a deal it didn't want, but felt compelled to take because of the insistence of the provincial government, internal documents show.

A package of documents, emails and presentations show Tory-appointed board members were squeamish about an agreement with insurance brokers that MPI estimated will cost Manitobans an extra $23 million over five years.

The Crown insurer wanted to move some of its simpler transactions — like renewing driver's licences — online. The move, MPI thought, would appease customers and save cash, since it felt insurance brokers weren't necessary in those transactions.

But the corporation and its board members say the government intervened to ensure brokers are involved in every transaction going forward.

Those MPI emails do not match statements from Crown Services Minister Colleen Mayer, who has said repeatedly the government only asked the board of MPI and the Insurance Brokers Association of Manitoba (IBAM) to work together and did not prescribe any specific action.

She maintained that assertion on Tuesday.

Decision was government's: MPI

The internal documents, obtained by the Opposition NDP through freedom of information requests, show MPI will transfer some of its services online in five years, while ensuring that brokers will be part of the move.

The expected compensation to brokers as part of that move to online services will increase by $23 million over five years, above the $84.5 million they already receive. Autopac rates will rise by 0.4 per cent, a memo said.

In an email on March 11, 2019, describing the change, MPI president and CEO Ben Graham wrote "the [government] has made the decision."

The documents also reveal MPI extended the current compensation agreement with brokers until Feb. 28, 2021, "on the advice of government," a letter written last November by former MPI chief administrative officer Ward Keith reads.

A month earlier, Graham wrote to a government official that "MPI does not believe it is appropriate or reasonable to increase broker funding to compensate for unnecessary services currently being provided that do not require the professional expertise of a broker."

A clash between the board and brokers became public in March when the Winnipeg Free Press reported the province was lobbying on behalf of the insurance agents, which prompted MPI's board to seek a legal opinion to determine its rights.

Minister of Crown Services Colleen Mayer repeated on Tuesday that the Progressive Conservative government has not issued a directive to the MPI board of directors regarding online services. (Radio-Canada)

The various emails appear to add credence to the claim the province had a hand in the decision — but the minister responsible for Crown services says the province's involvement doesn't violate legislation intended to reduce government interference since it never got in the way.

The Pallister government introduced legislation in 2017 that compels the province to inform the public within 30 days of issuing a directive to the Crown corporation.

In this case, Mayer maintains the government had no say in MPI's decisions, even though internal emails from MPI staff say they were pressured.

"There was no official directive from Crown Services, the department has been involved in discussions with both organizations on how to deliver services most effectively for Manitoba consumers," Mayer said in an emailed statement.

"Both MPI and [the Insurance Brokers Association of Manitoba] are encouraged to work together to find a way to provide Manitobans with the services that meet their needs, while understanding the value of professional insurance advice provided by brokers."

MPI exposed to 'inconsistent directives'

In a letter to Mayer on Nov. 16, 2018, MPI's then-board chair Brent VanKoughnet expressed frustration with signing a two-year extension with the insurance agents.

"Without a significant change in [the negotiating] process we are destined to relive the many communication challenges, misunderstandings and unmet expectations that regrettably erode trust, damage reputations, stifle innovation, and limit progress."

A month earlier, Graham wrote to Grant Doak, deputy minister of Crown services at that point, saying his words were being manipulated by brokers "aimed at getting their lofty and unquantified financial objectives adhered to by government."

VanKoughnet responded later that night that Graham's address had a "little more edge" than he'd prefer, "but I understand the frustration and agree that we can't just keep exposing ourselves to inconsistent directives."

Manitoba Public Insurance has already spent $2.4 million as it evaluates the move to online service delivery. (Darren Bernhardt/CBC)

VanKoughnet was demoted as chair in February, but remained on the board until May. He was replaced by Michael Sullivan, a dentist from Portage la Prairie, Man., the same city in which Premier Brian Pallister previously made his living in the insurance business.

The plan to transition all online services to brokerage oversight was approved less than a month later, an email indicates.

Manitoba Public Insurance has already spent $2.4 million as it evaluates the move to online service delivery.

The corporation estimated if brokers had been left out of the online services, the impact to the agents would be minimal, since online adoption of the simplest transactions would be low. Based on an estimated 20 per cent adoption rate, broker compensation would drop $40,000 — 0.12 per cent of total compensation.

Should the Crown have eliminated insurance broker compensation outright, MPI would save $473 million, the corporation's documents say.

"Customers' needs are the driving factor in establishing an online service delivery strategy including a broker network that is invaluable in being a key distribution channel for MPI products and services," the Crown corporation said in an email Tuesday.

"We recognize this is a big change and MPI and IBAM will work in collaboration regarding online services and how they meet the changing needs of Manitobans."