The province is set to introduce rules later this week that will prevent future governments from taking profits from ICBC to cover other expenses.
Attorney General David Eby says the government plans to ensure any future surpluses remain with ICBC.
Eby criticized the B.C. Liberal government for taking out almost $1.2 billion in ICBC surpluses between 2009 and 2016.
“For many years, the old government treated ICBC like an ATM,” Attorney General David Eby said.
“It raided ICBC’s profits to the tune of $1.2 billion – seriously eroding ICBC’s financial stability and leading to higher premiums. With these proposed changes, in those years when ICBC does make a profit, those funds will now stay within ICBC so they can be used to make auto insurance rates more affordable, and for other ICBC programs and services that benefit drivers.”
The legislation is set to be introduced later this week as part of a package of changes to the public insurer.
ICBC is set to move to a no-fault style system providing those injured in crashes up to $7 million in benefits but severely restricting their right to go to court. The change is expected to save the average ICBC customer 20 per cent on premium costs.
The changes will also have an impact on optional insurance, leading to a drop in expected revenues.
“The goal of enhanced care is all the money that comes in from that is passed on to customers in two forms. The first is reduced premiums and the other is improved benefits,” Eby said.
“ICBC should be operating in a way that they should be generating small surpluses every year.”
The proposed restriction on excess capital comes at a low point for ICBC. The public insurer lost more than $1 billion in each of the last two fiscal years.
ICBC is expected to lose $91 million this year from both basic and optional insurance.
“This legislation to keep ICBC surpluses out of government coffers is another step our government is taking to restore ICBC to a sustainable financial position so that insurance rates can stay affordable,” Eby said.
“Drivers can have confidence in knowing that their auto insurance premiums are going toward benefiting drivers.”
— With files from The Canadian Press