The Insurance Corporation of British Columbia (ICBC) is a
provincial Crown corporation in
British Columbia
British Columbia (commonly abbreviated as BC) is the westernmost province of Canada, situated between the Pacific Ocean and the Rocky Mountains. It has a diverse geography, with rugged landscapes that include rocky coastlines, sandy beaches, ...
providing
insurance
Insurance is a means of protection from financial loss in which, in exchange for a fee, a party agrees to compensate another party in the event of a certain loss, damage, or injury. It is a form of risk management, primarily used to hedge ...
. ICBC was created in 1973 by the
NDP
NDP may stand for:
Computing
* Neighbor Discovery Protocol, an Internet protocol
* Nortel Discovery Protocol, a layer two Internet protocol, also called SONMP
* Nondeterministic programming, a type of computer language
Government
* National ...
government of Premier
Dave Barrett
David Barrett (October 2, 1930 – February 2, 2018) was a politician and social worker in British Columbia, Canada. He was the 26th premier of British Columbia from 1972 to 1975.
Early life and career
Barrett was born in Vancouver, Britis ...
.
By law, any vehicle registered and driven or parked on public streets in British Columbia must be covered by ICBC's basic insurance package, which can be purchased from independent
brokers
A broker is a person or firm who arranges transactions between a buyer and a seller for a commission when the deal is executed. A broker who also acts as a seller or as a buyer becomes a principal party to the deal. Neither role should be con ...
across the province. This basic coverage, called "Autoplan," includes protection from third party
legal liability
In law, liable means "responsible or answerable in law; legally obligated". Legal liability concerns both civil law and criminal law and can arise from various areas of law, such as contracts, torts, taxes, or fines given by government agenc ...
, under-insured motorist protection, accident benefits,
hit-and-run
In traffic laws, a hit and run or a hit-and-run is the act of causing a traffic collision and not stopping afterwards. It is considered a supplemental crime in most jurisdictions.
Additional obligation
In many jurisdictions, there may be an ...
protection, and inverse liability.
History
The original purpose of ICBC was to provide universal and affordable compulsory
public auto insurance
Public auto insurance is a government-owned and -operated system of compulsory automobile insurance used in the Canadian provinces of British Columbia, Saskatchewan, Manitoba, and Quebec. It is based on the idea that if motorists are compelled to ...
in British Columbia by operating on a non-profit basis. However, in March 2010,
Christy Clark
Christina Joan Clark (born October 29, 1965) is a former Canadian politician who was the 35th premier of British Columbia (BC), from 2011 to 2017. Clark was the second woman to be premier of BC, after Rita Johnston in 1991, and the first female ...
's
BC Liberal
The British Columbia Liberal Party, often shortened to the BC Liberals, is a centre-right provincial political party in British Columbia, Canada. The party currently forms the Official Opposition. Subsequent to the 2020 British Columbia general ...
government announced that it would require ICBC to pay the province dividends totaling some $778 million over three years, thus signaling the end of ICBC’s operation as a non-profit Crown corporation, and also making it the only for-profit public auto insurance provider in Canada. These dividends eventually totalled $1.2 billion. Since ICBC's creation, its responsibilities have expanded to include
driver licensing,
vehicle registration Motor vehicle registration is the registration of a motor vehicle with a government authority, either compulsory or otherwise. The purpose of motor vehicle registration is to establish a link between a vehicle and an owner or user of the vehicle. Th ...
, and various road safety initiatives.
When ICBC was established, it initially held a
monopoly
A monopoly (from Greek el, μόνος, mónos, single, alone, label=none and el, πωλεῖν, pōleîn, to sell, label=none), as described by Irving Fisher, is a market with the "absence of competition", creating a situation where a speci ...
on all automobile insurance in the province, but in 1977 its enabling legislation was amended to allow private insurers to compete with it in the market for optional (additional) insurance (including coverage such as extended liability, collision, and comprehensive plans). ICBC continues to both hold a monopoly on basic insurance and offer optional additional coverage.
Recent history
On November 23, 2016, the provincial government announced that 'luxury' cars (those worth over $150,000) will no longer be insured by ICBC. In 2016, there were approximately 3000 cars in this class insured by ICBC; the government claimed that this change would save approximately $2.3 million per year. High-end car dealers have criticized this change, arguing that it would be better to adjust the rates that these car owners pay rather than ignore an entire segment of vehicles on the road. In 2017 ICBC introduced a modified version of this new system, whereby 'luxury' vehicles could still be insured but would face having to pay higher premiums. Under this new system, "Certain luxury vehicles that are considered to be high-value vehicles are charged higher Basic Autoplan insurance premiums, as of January 8, 2017". Vehicles that are classified as 'luxury' vehicles may also require an application to "obtain own damage coverage, which includes Collision, Comprehensive, and Specified Perils coverage.".
In 2019, ICBC overhauled its rate structure for liability insurance by shifting to a private-sector model where high-risk categories pay higher premiums. Attorney General David Eby has condemned the high rates, stressing the need for price reductions for young drivers, while acknowledging that rates are still subsidized.
In February 2020 the BC provincial government announced that they were switching ICBC from a "litigation based model" to a "no-fault" model.
Under this new model "people involved in vehicle crashes can no longer sue for damages except in cases involving court convictions for offences like negligence, street racing, impaired driving, or in cases of faulty manufacturing, botched repairs and the over-service of alcohol by a business".
[ Instead of suing, people "will receive benefits, payments for medical treatment and compensation directly from ICBC, using amounts set by the province depending on the type of injury".][ This change is estimated to save ICBC "$2.9 billion in legal fees, pain and suffering and injury claims in 2022". Of the $2.9 billion, $1.2 billion will be "redirected into boosting treatment benefits and quickening response times for claims", and 1.7 billion will be used to implement the 20% rate cut.][ In January 2021 the BCUC approved a "a 15 per cent decrease to basic insurance rates", with ICBC stating that "With the introduction of ICBC's new Enhanced Care coverage in May 2021, drivers will save on average 20 per cent on their combined basic and optional vehicle insurance".
In February 2021 the BC government announced that BC drivers "will get a one-time cheque averaging $190" due to "An improved financial outlook at ICBC, partially the result of fewer crashes and accident claims during the pandemic". A second rebate was announced in July 2021, averaging $120 dollars per policy holder.
In March 2022 the BC government announced that ICBC "will provide a one-time relief rebate of $110 to customers to ease the financial burden of increased gas prices caused by the invasion of Ukraine by Russian forces."] The government stated that the funds for the rebates would come from the "net income of $1.9 billion for the fiscal year ending March 31, 2022",[ with the remainder being "reinvested into ICBC’s capital reserves to ensure rates remain affordable for the long term."][
]
Operations
Governance
ICBC is governed by a board of directors appointed according to the provisions of the ''Insurance Corporation Act'', ICBC's enabling statute. The board of directors, the CEO, and ICBC management govern ICBC in accordance with corporate governance best practices, and in accordance with the provisions of the enabling legislation, the ''Motor Vehicle Act'', other legislation applicable to ICBC, and directives from the provincial Cabinet Committee. Proof of insurance is demonstrated, in part, by the application of a decal to the licence plate
A vehicle registration plate, also known as a number plate (British English), license plate (American English), or licence plate (Canadian English), is a metal or plastic plate attached to a motor vehicle or trailer for official identificatio ...
. As of May 1st 2022 decals are discontinued and will no longer be issued. This was done as part of the transition to online renewals.
Rates and finances
Like other insurance companies, ICBC bases its premiums on a client's claims history, type of automobile, and geographic location. The Corporation's discount plan (called "Roadstar" and "Roadstar Gold") rewards safe drivers with reduced premiums based on the number of years the driver has been free of successful claims against them.
Rates applicable to ICBC's basic automobile insurance coverage are subject to the review of, and are set by, the British Columbia Utilities Commission
The British Columbia Utilities Commission (BCUC) is an independent agency of the government of the Province of British Columbia responsible for regulating rates and standards of service quality. The Commission's primary responsibility is the regula ...
. In practice, however, the Cabinet of the provincial government controls ICBC’s rate setting through its power to set target financial outcomes (such as capital reserve ratios and profits), and through its ability to issue Special Directives to the BCUC.[BC Utilities Commission, 4-5.]
Revenue collected by the Corporation goes mostly towards paying insurance benefits and operational costs. The remainder is devoted to fulfilling ICBC’s mandate to promote safe driving (the "RoadSense" campaign), as well as various other loss prevention
Retail loss prevention (also known as Retail asset protection) is a set of practices employed by retail companies to preserve profit. Profit preservation is any business activity specifically designed to reduce preventable losses. A preventable ...
strategies.
See also
* Manitoba Public Insurance
*Saskatchewan Government Insurance
Saskatchewan Government Insurance (SGI) is a Canadian insurance company and a Crown corporation wholly owned by the Government of Saskatchewan. SGI's operations consist of the Saskatchewan Auto Fund, the compulsory public auto insurance program f ...
* Société de l'assurance automobile du Québec
* AirCare (emissions program)
References
External links
*
''The Insurance Corporation Act'', the enabling legislation of ICBC
{{DEFAULTSORT:Insurance Corporation Of British Columbia
Financial services companies established in 1973
Crown corporations of British Columbia
Motor vehicle registration agencies
Government-owned insurance companies of Canada
Financial services companies based in British Columbia