Opposition NDP wants the BC's Auditor General to probe into the worsening financial crisis at the Insurance Corp. of BC. NDP critic Adrian Dix wrote to Carol Bellringer, the Auditor Genearl on Monday, explaining and urging her to examine the government's financial withdrawals from ICBC and the resulting implications to ratepayers. This comes a week after ICBC announced they were planning on dropping insurance for luxury vehicles worth $150,000 or more. The purpose of this was to prevent their hypothetical worse-case scenario that could see rates rise as much as 42 percent by 2020 if current trend of insurance fraud, claims and injury claims does not recede. The decision to remove insurance options for luxury vehicles at ICBC was decided because they are on average six times more expensive to fix than an average vehicle. However, analysts believe dropping insurance coverage for luxury vehicles will only save ICBC an estimated $2.3 million on more than almost $4 billion in claims annually.
Dix wrote "over the past few years, the Liberal government has scooped $2.6 billion from ICBC's optional capital intended to pay for claims on the optional side of the business - $1.2 billion to government coffers and $1.4 billion to basic insurance capital." Some analysts believe dropping the luxury vehicle insurance will do little to ease the true problem. ICBC was created in 1973 to give more fair and affordable insurance coverage to British Columbians - which it did. The corporation truly did bring in more reasonable insurance premiums and it managed to be profitable at the same time. However, throughout the years, the political parties in power could not resist meddling in ICBC affairs. While the profits of the public insurer should have gone into reserves for situations when losses exceed premiums, the party in power have consistently siphoned it into general revenue. A very unsustainable practice where there is no safety net if there were a situation where the insurance company were to see losses. So right now the $1.2 billion which have been moved into general revenue since 2010 could come pretty handy to prevent the rise of premiums. This isn't all of ICBC's troubles. An audit conducted in 2012 found the corporation found mismanagement and an atmosphere of entitlement that resulted in unreasonable salaries and bonuses. Managers were not focused on cutting costs, choosing more expensive options when selecting goods and services. The end result of ICBC being poorly managed and it being a political tool is the taxpayers must now feel the burden.