ICBC is hiking auto insurance premiums almost five per cent in the latest government tax gouge.
Make no mistake, the public insurer is just another arm of B.C.’s bloated government bureaucracy. This B.C. Liberal government’s constant messaging about what a low-tax regime it is offering rings hollow considering the premium it attaches to so many government services, from ferries, to MSP Premiums, even toll bridges.
Critics, including the Consumers Association of Canada, point out that ICBC has become a cash cow for the government. The association says that since taking office, the Liberals have taken more than $1.2 billion out of ICBC. Yet now ICBC says it needs 4.9 per cent more in basic insurance.
At the same time, the insurer forecasts a net income of $230 million this year and next.
The corporation is accumulating funds. In 2002, ICBC’s reserves were $314 million – and there should be surplus to safeguard an insurer against an unexpected spike in claims. But there was a loud protest from critics when the agency said it would bring the reserves to $1 billion. By 2010, they were at $3.8 billion.
There should be a formal determination of how much the Crown corporation needs in reserve, expressed as a percentage of the agency’s annual payout for injury settlements. The remainder of the reserves must be returned to B.C. drivers in the form of lower premiums.
ICBC interim president Mark Blucher tries to defend the 4.9 per cent increase as insignificant, saying that the hike in basic insurance premiums will be offset by better deals, which will be offered on optional insurance. For years, ICBC has been allowed to take the tactic of raising basic premiums, while lowering optional product prices to compete with private insurers.
There is only one good reason to have government in the insurance business – cheaper insurance for taxpayers. But it’s not.
More affordable insurance could be had through private companies – a consumer need only log into the website of an Alberta insurer and get an online quote for their vehicle and coverage to see that.
– Maple Ridge-Pitt Meadows News