Despite B.C. transport minister Todd Stone promising that he would see that Insurance Corporation of British Columbia’s (ICBC) auto insurance rates would not increase more than 4%, lawmakers have decried the proposition of even allowing the insurer to hike its prices—regardless of how much ICBC intends to raise its rates—accusing the minister of turning ICBC into a government “slush fund.”
In an interview on Radio NL Wednesday, Stone mentioned that ICBC can request an increase of 4% to 7% to basic insurance rates, which is within the rate-smoothing framework.
“We’re going to do everything that we possibly can to apply as much downward pressure on rates so that we’re closer to four per cent versus a higher number,” Stone said in the interview. “But look, the pressures on rates at ICBC is significant.”
ICBC is set to submit its application for a basic insurance rate increase to the B.C. Utilities Commission by Aug. 31. Until then, the insurer does not have to disclose how much it would change its rates.
Any approved rate increases take effect on Nov. 1.
During the latest Question Period this week, the Opposition attacked Stone’s approval of a possible increase, accusing the minister of using ICBC’s cash for his own ends.
“We’re at a time where life is more and more unaffordable for families. The minister of transportation is making this worse. He is funnelling the cash from ICBC to his colleague (the finance minister) to pad the government’s bottom line,” said Carole James of the NDP.
According to Stone, the profits are generated on the optional insurance side and invested in other areas, such as healthcare and education. He also said that the rate increase is due to the growing complexity, frequency, and severity of bodily injury claims, as well as higher vehicle repair costs.
Vancouver Sun reported that, in the last five years, there has only been one instance of ICBC transferring its projected amount of excess capital to the government.
Stone told lawmakers that his ministry will work “very closely” with ICBC on a number of programs, such as better fraud detection, looking into executive compensation, and hiring more claims staff. He also said that he is confident that such efforts will make sure that rates will stay at the lower end of the allowable range for as long as possible.
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