Gold River, B.C. -- March 4, 2018 -- Provincial Attorney General David Eby has announced that the Insurance Company of B.C. will no longer be required to have enough capital available to cover the cost of claims.
“So, we had to change the rule in order to appear in front of the utilities commission to lay out the changes we’re doing with ICBC to get back on track financially,” said Eby.
Believed to have lost $1.3 billion last year, the insurers reserves of cash-on-hand had dipped below 54 percent of the amount mandated by the Crown. Without Cabinet's assent, the ICBC would be unable to make last month's emergency rate-hike permanent.
As a public business, the announcement, which described the move as part of a broader effort to restore financial stability to the ICBC, was no surprise. While Crown corporations can be sanctioned for failing to live up to their fiscal duties, closing down the insurer would cause a crisis as insurance is mandatory for Canadian drivers and the ICBC is, by far, the largest auto insurer in the province.
Last month, Eby refferred to the ICBC's financial situation as a “dumpster fire,” one he has suggested was largely the fault of the previous government which had used ICBC funds to help sustain provincial spending.