BC Attorney General David Eby says the new reforms coming to the Insurance Corporation of British Columbia (ICBC) will finally help the struggling public insurer turn a corner and recover from its financial mire.
The British Columbia (B.C.) government to push through its legislation for a $5,000 cap on general damages for minor injury from auto accidents. Earlier this year, the government in B.C. proposed the cap and has now said it will be passed and effective from April 1, 2019.
Eby says the legislation could save the ICBC, which lost $1.3 billion last year, and over $800 million in 2016. Blame for the financial position of the company has been put on raising claims from more collisions, and the costs of claims and repairs. The ICBC is the only standard auto insurance coverage provider in the province, but Eby has previously said introducing private competition is not an option.
Instead, he thinks the new legislation will help ease pressure on the ICBC. “We hope and are advised that this legislation might get ICBC back in the black which means that the savings are in the neighbourhood of $1 billion,” Eby said.
He also said the cap is not the only reform the government will introduce:
“This is not the extent or the end of the work we are doing at ICBC,” he said.
Yesterday, the Insurance Bureau of Canada (IBC) welcomed the decision to push through the legislation:
“A minor injury cap has been used effectively in other provinces to help control costs and limit the rate pressures facing drivers, without limiting their access to the care they need,” said Aaron Sutherland, Vice-President, Pacific, IBC. “Drivers in BC pay more for auto insurance than in any other province in Canada. These reforms are an important first step to limit the rate increases facing drivers in the years ahead.”
“Today’s changes will help relieve the financial pressure facing the Insurance Corporation of British Columbia (ICBC), but are unlikely to reduce rates for BC drivers,” Sutherland continued. “Opening ICBC to competition and giving drivers the ability to shop around for their auto insurance would bring significant savings, and must be part of any long-term solution to the challenges in BC’s auto insurance system.”