Attorney General David Eby says that the province has a “broken automotive insurance system”.
Eby addressed the media Monday (January 29) about the massive losses at ICBC, projected to amount to $1.3 billion for the current fiscal year, to lay out a path to fix the car insurer.
Describing the situation as a “financial dumpster fire”, Eby said that the B.C. NDP government will introduce measures in the spring legislation to put the provincial Crown corporation back on its feet.
“We won’t be doing short-term fixes,” Eby said.
Eby also announced that he will release in two weeks a report by auditing and consulting firm PwC Canada on ICBC.
“There are initiatives that they’ve outlined there that will bring the process of bringing down costs for ICBC,” Eby said.
According to Eby, the province is looking at measures that include putting a cap on awards for minor injuries, and controlling costs by auto repair shops.
He also said that executive compensation is another area that the province is reviewing.
“The direction from the beginning has been very clear to everybody involved, including the third-party reviewer [PwC]: if you have recommendations about where we can save money starting now, let’s do it,” the attorney general said.
One action that will not be expected from the B.C. NDP government is the adoption of a no-fault insurance system.
Most provinces in Canada have no-fault insurance, which makes it easy to get claims paid without going through litigation.
But as Eby said: “I’m interested as much as possible in protecting the rights of British Columbians to sue and to recover damages through the court system.”
In a media release Sunday (January 28), ICBC noted that for the first nine months of the fiscal year ending March 31, 2018, net claim costs have totalled $4.25 billion.
“Simply put, the amount of premiums we are collecting from customers is not covering the ever-increasing amounts we are paying out in claims costs,” ICBC stated in the release. “This is not sustainable.”
The attorney general also rejected privatizing ICBC, saying this does not lead to lower premiums.
Eby acknowledged that fixing ICBC is not going to be easy.
“There is no silver bullet for this issue,” Eby said.
Eby also blamed the previous B.C. Liberal government for leaving ICBC in a mess, a line echoed by the union representing employees at the insurer.
“We hear from our members about the problems at ICBC and they want to make sure that injured people are looked after and services are maintained, but a sustainable solution needs to be found and we cannot allow the system to be abused by excessive legal and repair costs among other things,” MoveUP president David Black said in a media release.