By CRM Staff
Vancouver, British Columbia -- March 4, 2018 -- Measures taken by the provincial government to help buoy the finances of the Insurance Company of B.C. (ICBC), which lost $1.3 billion last year, may not be paying off.
Last month, an independent report into the ways to ease the financial crisis at the crown corporation, written by Ernst and Young, suggested that the company could generate $59 million from the revenues generated by a new speed camera program.
The report also mentioned that additional revenues could help offset pressure on basic insurance premiums, punishing bad drivers and rewarding the ones who follow the rules of the road. Not only would the initiative keep costs down, it would discourage the unsafe driving behaviour that has lead to an increase in collisions in B.C. over the past five years.
The idea’s merits, however, have fallen on deaf ears. This week, the NDP government announced that the revenues would not go to the ailing insurer, but to municipal budgets. At a press conference, Attorney General David Eby announced that, “This red-light camera initiative is not a revenue-generation piece for ICBC. It’s not going to be creating money that will help close the financial gap.”
While using traffic ticket revenue to fund municipal budgets is par for the course in B.C., the tactic has raised eyebrows among Liberal MLAs as Eby and other members of the NDP had criticized the Liberals for diverting ICBC funding to help balance the provincial budget.
One of the other measures taken by ICBC was an increase in the premiums paid by drivers of luxury vehicles. On April 1, drivers of passenger vehicles worth between $125,000 and $149,000 saw rates spike between 10 and 15 percent, and drivers of even more expensive vehicles will pay an additional 20 percent.
While the efforts may help to curb costs, the company must still live up to the failings of its past. It recently emerged that the ICBC had spent five years, and close to $780,000 on repairs for a Ferrari that was driven into a pole in 2012.
Valued at $696,000 at the time of the crash, the car remains undrivable, with a total repair bill expected to come in close to a million dollars. The driver, who contends that the ICBC has breached its contract with him by failing to deal with the repairs in a timely manner, is suing.