Vancouver: Further to the announcement from the Honourable Todd Stone, Minister responsible for ICBC on December 19th, 2016, I am pleased to advise that ICBC’s Board of Directors has now finalized the Terms of Reference for the comprehensive independent review of the fairness and affordability of basic insurance rates. In addition, an Expression of Interest seeking an independent third party expert has been posted on BCBid.
The review will identify key factors impacting basic insurance rates and provide a broad range of options available to limit future basic rate increases to the rate of inflation. The review will be based on the principles of maintaining public ownership of ICBC and operating under the current model.
The Board plans to have the third party selected and the review started by mid-March. The goal is to receive a preliminary report in June in order to inform ICBC’s August basic rate filing with the British Columbia Utilities Commission.
The Board has also retained Mr. Gord Macatee to advise the Board through the review. Mr. Macatee brings years of experience as a public sector leader including as the current BC Ferries Commissioner. His successful review that reduced the pressure on ferry rates positions him well to provide helpful insights to the Board.
Rapidly increasing numbers of crashes, claims and claims costs are putting significant pressure on the cost of insurance in British Columbia – pressures shared across the auto insurance industry in North America.
In the meantime, government and ICBC continue to work together to mitigate pressure on rates through the following measures:
· Focusing on stopping fraudulent and exaggerated claims.
· Doubling the basic premiums on certain high value vehicles (personal vehicles worth more than $150,000) so the average ratepayer is not covering the cost of repairing those expensive, luxury cars.
· Hiring 260 more front-line claims staff in 2016 with plans to hire another 80 additional claims staff early this year to ensure our customers continue to receive good service as the number of claims continues to rise.
· Reducing the number of ICBC employees making more than $150,000 per year by almost 50 per cent from 2014 to 2015.
· Shrinking ICBC’s executive team from 11 members in 2012 to just eight today; executive compensation is 46 per cent lower than it was in 2011.
· Government directing ICBC to transfer money from the optional side of our business to our basic business to help keep rates low.
· Government foregoing any dividend from ICBC for at least three years.