VANCOUVER — British Columbia’s once-celebrated public auto insurer has become a financial train wreck, its critics say, as studies into the beleaguered Crown corporation call for dramatic rate hikes and drastic structural changes to save it from ruin.
But while everyone appears to agree the system is broken, there is disagreement over how the Insurance Corporation of British Columbia went off the rails in the first place and what must be done to fix it.
The crisis at ICBC is shaping up to be the first major financial hurdle for B.C.’s new NDP government.
Attorney General David Eby, who is also the minister responsible for ICBC, blames the previous Liberal government for problems at the corporation.
“ICBC, as described to me by senior bureaucrats, is on the path to insolvency,” Eby said. “It’s very unfortunate that it’s been left for so long, because I think there was really an opportunity to address this much earlier.’
ICBC was created in the early 1970s by the province’s first NDP government to provide affordable and universal auto insurance.
All B.C. vehicle owners are required to purchase basic coverage through the corporation, though in 1976 the government began allowing private insurers to compete in offering additional optional coverage.
Eby and other ICBC supporters single out the actions of former Liberal premier Gordon Campbell as marking the beginning of the corporation’s troubles.
Campbell required ICBC to keep much higher amounts of backup capital. The resulting stockpile proved irresistible to politicians in 2010 following the global financial meltdown, critics say, when the government began siphoning hundreds of millions of dollars of “excess capital” almost every year.
In all, the Liberals withdrew $1.2 billion from the lucrative optional side of ICBC’s business, and also transferred $1.4 billion to offset deficits on the compulsory side providing basic coverage beginning in 2012.
“The reason we’re in a bind right …read more
Source:: Vancouver Sun