British Columbia’s New Democrat government is planning to table legislation this week to prevent governments from diverting surplus funds from the province’s public auto insurer to cover other government expenses.
Attorney General David Eby said Monday the legislation would ensure future surpluses remain with the Insurance Corp. of British Columbia. Surpluses from the Crown corporation’s optional capital funds should be used to enhance programs that offset premium costs for drivers, he said.
Eby said the previous B.C. Liberal government took $1.2 billion in surpluses from ICBC between 2009 and 2016, which eroded its financial stability and led to higher premiums.
“I believe we need to do all we can to prevent future government from diverting surpluses away from ICBC,” said Eby at a news conference. “The previous government treated ICBC like an ATM, year after year.”
The government also recently announced plans to curtail legal costs in the public insurance system by limiting the ability of injured people to sue at-fault drivers after a crash. The NDP said the change will lower premiums by about 20 per cent or an average of $400 in annual savings per driver in 2021.
Eby said its measures to bring stability to ICBC are forecast to produce surpluses starting this year. He said preventing the diversion of optional capital funds will benefit drivers.
“When that money is inside ICBC in its capital accounts, it can help reduce rate costs through investment income,” he said. “When it’s taken out of ICBC and put into government’s account it reduces government’s borrowing costs, but it also deprives ICBC of the ability of using that investment income to reduce rates.”
The Opposition Liberals were not immediately available for comment.
Story by The Canadian Press