ICBC in "financial dumpster fire" - Minister - Woodmar.ca

ICBC in “financial dumpster fire” – Minister

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ICBC in “financial dumpster fire” – Minister

Businessman looking down at the falling red arrow destroying a concrete barrier. Collapse and drop. Fall and depreciation. Regression and deterioration. Crisis.

by Laura Kane

Major reforms are on the way to extinguish a “financial dumpster fire” at British Columbia’s public auto insurer, which projects a $1.3-billion net loss this fiscal year, the province’s attorney general said Monday.

David Eby blamed the crisis at the Insurance Corporation of British Columbia on years of “reckless decisions” by the previous Liberal government, including taking more than $1 billion from the insurer and transferring it to government coffers.

He also said the government ignored warnings and recommendations made in a 2014 report by independent consultants Ernst & Young, and appears to have scrubbed the recommendations from a version of the report presented to the public.

“They knew the dumpster was on fire, but they pushed it behind the building instead of trying to put the fire out,” he said at a news conference, adding that before last spring’s election, the Liberals projected ICBC’s losses to be $11 million.

“British Columbians were not told the truth about the state of ICBC. They were told the problem was not serious _ a loss of about 100 times less than was actually the case. Now British Columbians are facing the full consequences of the previous government’s decision to bury the truth.”

The insurance corporation has already posted a net loss of $935 million for the first nine months of the 2017-18 fiscal year. It said the “sizable and significant loss” is due to a rapid increase in the number of collisions in the province, as well as the rising costs of those claims.

Eby, who is also minister responsible for the insurance corporation, said it’s yet to be determined how rates for drivers will be affected, but he intends to keep them affordable, with high-risk drivers paying more while low-risk drivers pay less.

He said the government will announce measures to address the crisis in the coming weeks. He said it was seriously looking at a number of different initiatives, including caps on financial awards for minor injuries, changes to deductibles and other reforms aimed at lowering legal and auto body costs.

The government is not considering no-fault insurance, he said, as it wants to protect the right to sue and recover damages from the court system.

Eby did not provide a copy of the draft Ernst & Young report he accused the Liberals of redacting. But former finance minister Mike de Jong told The Province newspaper that the government removed at least one of the recommendations, around minor-injury caps, because it wasn’t prepared to consider it.

Liberal legislator John Yap said the threat posed by rising claims and payouts is well-known and the previous government took steps to deal with the issue. As well, a third-party review of ICBC was ordered by the B.C. Liberals and delivered on July 10, so it was waiting on the desk of the new minister, he said.

“Instead of taking the immediate actions the report called for, David Eby has done nothing for seven months except order another review,” said Yap.

“It is clear the B.C. NDP made promises they can’t deliver on and so are looking to lay blame instead of accepting responsibility for that. David Eby has a blueprint for moving forward at ICBC but keeps delaying any action and is allowing the problem to grow even worse under his watch.”

Eby said the situation at ICBC would have “implications” for the provincial budget, but he referred questions to Finance Minister Carole James, who did not immediately respond to a request for comment.

Asked whether he would rule out privatizing the public insurance corporation, he said ICBC provides many important services to the public, including driver licensing, and Ontario’s privatized regime has not delivered lower costs to ratepayers.

“It’s not simply a matter of who owns the insurer. It’s a matter of management. It’s our intention to get management under control at ICBC.”

The Canadian Press

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