B.C. Attorney General David Eby says “major reforms” are needed to address “systemic underlying issues” at the Insurance Corporation of B.C. should the government hope to avoid premium rate hikes upwards of $400.
In calling ICBC a “financial dumpster fire” Monday at a news conference, Eby pointed the finger at the former BC Liberal government for concealing the true nature of the Crown corporation’s debt.
By the end of this financial year (March 31), ICBC will have incurred $1.3 billion in debt, far higher than the nearly $300 million in losses that were projected prior to a review ordered by Eby.
Eby said former Minister of Transportation Todd Stone “scrubbed” an independent report from 2014 that outlined significant financial concerns, while suggesting politically unpopular reforms.
Eby's ICBC review found costly, yet-to-be-paid personal injury claims — that are taking a long time to get through the court system — are more of a liability than previously thought. For instance, ICBC said it experienced an “unprecedented” 80 per cent growth in large loss claims which have an average cost of $450,000 per claim.
“On top of that, the costs of those claims are ballooning. After only breaking through the $2 billion threshold as recently as 2014, our injury claims costs are now closer to $3 billion a year. This is not to mention the increasing cost of vehicle repairs and the emergence of additional, major pressures,” noted ICBC in a statement Sunday.
The Liberals also took a reported $1.2 billion from ICBC, between 2010 and 2016, as dividends, to balance their budgets — something Eby said would stop under the NDP government.
Richmond-Steveston Liberal MLA John Yap countered Eby on Monday by saying Eby was doing everything he accused the Liberals of doing — delaying reforms.
"The threat posed by rising claims and payouts is well-known and the previous government took steps to deal with the issue," said Yap.
One such step included no longer granting insurance to vehicles valued over $150,000.
Now, Eby said further reforms will be coming to ICBC practices and its insurance products. Almost immediately, Eby said more full-time red-light cameras will be installed and more road safety and distracted driver education will be rolled out.
Furthermore, “we’re doing long term fixes to get the system under control.”
One fix may be a cap on minor injury claims, although Eby wasn’t forthcoming on when this may happen. With few details, he said he will also target deductibles, rising auto body costs and management of repair vendors.
As well, “we’re trying to encourage ICBC to settle as many claims as quickly as possible,” said Eby.
He confirmed his NDP government is not looking at no-fault insurance. He said he believes in a person’s right to have the courts determine compensation for an accident. He also dismissed the idea of a mixed system, whereby people can choose no-fault insurance.
Still, Eby provided no assurances that insurance rates won’t go up significantly.
There will be no easy fix, he said.
“If this was easy, the previous government would have taken these steps. They wouldn’t have been hiding, appearing to be cutting out the pages of consulting reports that make these kinds of awkward or politically uncomfortable recommendations,” said Eby.
IntegrityBC, a non-profit organization that analyzes political contributions, noted the BC Liberals accepted about $420,000 from insurance brokers, about $305,000 from auto industry associations, about $163,000 from personal injury law firms, and about $937,000 from law firms that handle ICBC cases.
The News has asked Stone to reply to Eby’s allegations but he has not responded.
