A ‘dumpster fire’: AG addresses ICBC losses, as bigger rate hike becomes likely

VANCOUVER (NEWS 1130) – ICBC’s money problems mean drivers across the province will likely face a bigger rate hike this spring. That’s the fallout of losses expected to hit $1.3 billion by April.

Attorney General David Eby calls the situation a “financial dumpster fire.”

“British Columbians deserve the truth, no matter how brutal the news is,” says Eby, who is now considering capping payouts in order to stop the financial bleeding he blames on mismanagement by the former Liberal government.

He’s standing by a promise he made last year to reject any calls for “no fault” insurance and changes already made won’t be enough to erase the debt.

As for how high rates might have to go up, Eby is not putting out any numbers, saying that will likely be part of the budget now being put together by Finance Minister Carole James.

Eby adds two reviews continue into auto body shops accused of overbilling ICBC for more than a decade.

Eby promises to announce changes in the upcoming budget, but won’t release any further details. He says without immediate intervention, drivers in BC could face premium hikes of $400.

He says it’s clear there was political interference in operations by the former BC Liberal government, “siphoning” money out of the Crown corporation. “Years of reckless decisions by the former government have undermined ICBC’s ability to deliver low-cost insurance to British Columbians.”

Eby says the previous government ignored expert recommendations given three years ago about how to prevent ICBC’s impending, massive losses.

“Not only did they reject these recommendations, it seems they scrubbed those recommendations and warnings from a 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.”

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The province is pointing to improvements that it says are already on the way, including stronger safety measures for new drivers, higher distracted driving fines, and higher rates for people with bad driving records.

In regards to cost savings through executive pay, Eby says that is also under review and “to say the least, bonuses are not appropriate.”

The insurance corporation says, according to its own numbers, it’s posted a net loss of $935 million for the first nine months of the fiscal year, which ran from Apr. 1st to Dec. 31, 2017.

“This is obviously a sizeable and significant loss, and is further evidence of the growing financial pressures we are under from the rapid increase in the number of crashes occurring across BC,” says ICBC in a statement.

It blames the numbers on a surge in claims and the growth in the costs of those cases. “Our projected net loss for our full 12-month, fiscal year (ending Mar. 31, 2018) now stands at almost $1.3 billion.”

Last year, NEWS 1130 exclusively reported on body shops inflating repair costs and that was a factor in the numbers.

BC Liberals claim NDP is slow to act on ICBC fixes

John Yap, the BC Liberals’ ICBC critic, is countering Eby’s comments by claiming Eby already has has the tools needed to fix the Crown corporation for some time, and has merely been slow to act.

“The BC NDP are trying to distract from the fact they are not taking action on the challenges ICBC is facing,” Yap says in a statement.

“A third-party review of ICBC was ordered by the BC Liberals and was delivered on July 10, so it was waiting on the desk of the new minister. Instead of taking the immediate actions the report called for, David Eby has done nothing for seven months except order another review.”

Yap concludes that Eby is allowing the ICBC problem to grow worse under his watch.