Yes, the Insurance Corp. of B.C. has been mismanaged and is in crisis, losing $913 million last year. But that’s the past. The issue now is how to fix the problems and set the corporation on a sustainable course. Almost every British Columbian has a stake in seeing that done quickly and prudently, in a way that maintains protection for those hurt in crashes while keeping rates affordable.
The Ernst and Young report commissioned by the former government offers an excellent starting point, and Attorney General David Eby has taken some first steps, including increasing the hours for red-light cameras, which inexplicably have been turned off 18 hours of every day.
There are four key areas to pursue.
First, ICBC’s costs need to be reviewed to ensure all savings have been realized (although its operating costs are about 40 per cent lower than the Canadian average, Ernst and Young found). A review is under way.
Second, the government needs to find ways to reduce the number of claims. Crashes have increased 23 per cent in the past three years, and B.C. now has the third-highest crash rate among provinces.
The obvious solutions are road improvements to high-crash routes, such as the Malahat, and improved enforcement.
While crashes have been increasing, enforcement has been going in the other direction. The number of tickets and charges for three key road offences — speeding, distracted driving and impaired driving — has fallen by 11 per cent in the past two years. Fatalities linked to those offences increased by 13 per cent in the same period.
Simple measures such as speed cameras and increasing the number of red-light cameras while allowing them to capture photos of people speeding through intersections would save ICBC about $250 million a year, according to Ernst and Young — enough to cut premiums by $75.
Third, the government needs to tackle the rising cost of claims. And this is where great care and public consultation are needed.
The obvious solution is to move to no-fault insurance, as proposed — and abandoned — by the former NDP government a generation ago. No-fault insurance sets a fixed schedule of payments for people injured in crashes, typically eliminates the possibility of awards for pain and suffering and eliminates much of the legal wrangling about liability.
Ernst and Young notes the average ICBC settlement for minor injuries has more than tripled since 2000, with pain-and-suffering awards making up about half the costs.
The appeal — and big savings — are obvious. But the effect on injured drivers and passengers is significant, and a full public discussion is needed. This would be an excellent opportunity for the new government to make use of an all-party legislative committee to review the issues and make recommendations. One solution is to follow the path of Saskatchewan, which offers drivers both options, with no-fault much less expensive.
ICBC needs to change. But the changes need to be careful and made with full public involvement.
