New review ordered for ICBC rates
Minister’s decision to halt ongoing probe and approve basic hike slammed as ‘sleazy’ action
The B.C. government has effectively halted an ongoing review of a proposed ICBC rate increase and ordered a new independent review of insurance rates, likely pushing any conclusions back until after the May provincial election.
Transportation Minister Todd Stone said Monday that he has ordered the B.C. Utilities Commission to approve a basic rate hike of no more than 4.9 per cent and directed the Insurance Corp. of B.C. to commission a third-party study focused on how to keep rate increases in line with inflation.
The results of that study are expected by next summer.
“I’ve heard a message loud and clear that people are worried about the increasing cost of living,” Stone told reporters, adding that there is no intention of moving to a privatized vehicle insurance system.
Stone’s announcement comes after projections that ICBC reluctantly released last month, which showed basic rates rising by up to 42 per cent over the next five years. Those numbers were only released on the order of BCUC regulators, who argued that they were necessary context for considering the proposed rate increase.
The independent commission’s review of ICBC’s proposal is still underway, but Stone’s announcement has turned the outcome into a foregone conclusion. He described his directive as simply “shortening the process.”
NDP critic Adrian Dix alleges that the Liberal government wanted to end a review that had uncovered politically damaging information.
“What Mr. Stone is doing is cancelling an independent review and they are so dishonest that they’re cancelling it on the basis of setting up a new review,” Dix said.
“As cynical and sleazy government actions go in the week before Christmas, this one kind of takes the cake.”
Dix pointed out that the province last conducted a review of ICBC just four years ago.
However, Stone said that this third-party review will be a much-broader study of the insurance provider’s operations.
ICBC’s board of directors has already begun drafting the terms of reference for the study, which will examine how to keep rate increases down while the Crown corporation struggles with increasing vehicle damage, injury claims and repair costs.
The government has already announced plans to cut off insurance for some luxury vehicles in an attempt to stop the bleeding at ICBC, but that will only save about $2.3 million of almost $4 billion in claims each year.
ICBC had to take $472 million from its optional business this year to cut a projected 15-per-cent basic rate increase.
At the same time, the province has siphoned $1.2 billion in profits from the optional insurance side of ICBC since 2010.
The government has promised not to touch those dividends for the next three years.