For the first time in years, the B.C. government is projecting that the province’s beleaguered public insurer will be in the black.
The B.C. NDP’s 2020 budget forecasts that ICBC will show a surplus of $86 million in 2020/21 growing to $148 million next year and $191 million by 2022/23.
ICBC will show a loss of $91 million for financial year 2019/20, according to the budget.
The financial situation at ICBC, which has hemorrhaged around $1 billion in each of the two previous years, has been described by B.C. Attorney General David Eby as a “dumpster fire.”
ICBC last returned a surplus in financial year 2015/16.
“Our government has taken significant steps to help address sustainability at ICBC and affordability for British Columbians,” Finance Minister Carole James said in her budget speech.
“While the old government ignored the problems with auto insurance, we’re transforming ICBC to make it work for you. Instead of pushing problems down the road, we’re standing up for the best interests of British Columbians.”
The province says ICBC’s improved financial state stems from changes made in April of last year.
Those changes included a $5,500 cap on soft-tissue and “minor” injury payouts.
The budget also credits legislative measures to improve access to justice, which it says have resulted in lower legal costs.
The document also points to the pending implementation of a no-fault style “care-based” insurance regime, which will take effect in May 2021.
That new system will bar auto accident victims from suing, but will guarantee up to $7.5 million in medical and rehabilitation benefits and is expected to slash ratepayers’ premiums by an average of $400 per year.
The forecast takes into account a zero per cent rate increase for 2020.
“In my view, we are on a very positive road to a much better place for auto insurance in the province,” ICBC president Nicolas Jimenez said.
Jimenez said the province has managed to remove a number of costs facing ICBC and brought the system “back into balance.”
“What they didn’t do is they didn’t lower premiums. So what’s happening now with enhanced care is we’re moving into a world where we’re going to see substantial reductions in premiums and in turn we’re going to see a major shift in the system to care and recovery.”
The NDP estimates a move to an “enhanced care coverage program” will cost the province $92 million per year, beginning in 2022.
But the opposition BC Liberals say there are big unanswered questions about the move to no-fault style insurance, and the NDP’s numbers themselves.
“They’ve now announced that they’re going to freeze fees … and then they’re flat-lining the expected projections for the insurance company over the next number of years while they transition to an entirely new model of insurance which has its own set of consequences that we have yet to see any numbers on.”
B.C.’s move to a no-fault style insurance regime has proved controversial, drawing sharp criticism from the Trial Lawyers Association of BC.
The group says the change will put injured and vulnerable British Columbians further at risk.
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