The Insurance Corporation of British Columbia (ICBC)

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The insurance corporation of British Columbia (ICBC)
The insurance corporation of British Columbia (ICBC)

The insurance corporation of British Columbia (ICBC) is an insurance corporation in British Columbia which was created in 1973 by the NDP government of Premier Dave Barrett. The main purpose of ICBC was to give universal and affordable compulsory public auto insurance in British Columbia in the term of operating a non-profit basis.

nicholas jimenez-ceo icbc
Nicholas Jimenez- Current CEO of ICBC

In March 2010, Christy Clark’s BC Liberal government declared that it would require ICBC to pay the province dividends and the amount of $778 million over three years which was the signaling of the end of ICBC’s operation as a non-profit Crown corporation, also making it the only for-profit public auto insurance provider in Canada.

All the dividends totaled $1.2 billion. After that ICBC’s creation took its responsibilities to expanded to include driver licensing, vehicle registration, and various road safety initiatives.

They created an insurance package which is the basic coverage called “Autoplan,” this includes protection from third party legal liability, hit-and-run protection, under-insured motorist protection, accident benefits, and inverse liability.

Later ICBC continues to both hold a monopoly basic insurance and offer optional additional coverage also. ICBC decides its premiums on a client’s claims history just like the other insurance companies which is the type of automobile, and geographic location.

ICBC’s discount plan called “Roadstar” and “Roadstar Gold” these rewards safe drivers with reduced premiums on the bases of the number of years the driver has been free of successful claims against him/her.

ICBC is managed by a board of directors who decide according to the laws of the Insurance Corporation Act, ICBC’s enabling statute. The board of directors, the CEO, and ICBC management run according to the corporate governance best practices and according to with the provisions of the enabling legislation and the Motor Vehicle Act also with the other legislation are applicable to ICBC and directives from the provincial Cabinet Committee. The proof of insurance is demonstrated which is in part by the application of a decal to the license plate.

Car Insurance - ICBC Roadstar
Car Insurance – ICBC Roadstar

Then the rates are applicable to ICBC’s basic automobile insurance coverage which are subject to the review of ICBC and are set by the British Columbia Utilities Commission. However, in practice, the Cabinet of the provincial government holds and controls the ICBC’s rate-setting through its capacity to set target financial outcomes such as capital reserve ratios and profits, also through ICBC’s ability to issue Special Directives to the BCUC.

The total revenue controlled by the Corporation goes mostly on paying insurance benefits and operational costs. The surplus is devoted to fulfilling ICBC’s commission to develop safe driving which is the “RoadSense” campaign; also, various other loss prevention strategies. On November 23, 2016 the provincial government declared that ‘luxury’ cars which worth over $150,000 will no longer be insured by ICBC.

Later in 2016, there were almost 3000 cars in this class insured by ICBC which the government claimed that this change would save almost $2.3 million per year in total. Also, later on, that year high-end car dealers have criticized this change they also argue that it would be better to manage the rates that these car owners pay rather than ignore an entire segment of vehicles on the road but they were not succeeded.

 

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