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The B.C. government has rejected efforts by private insurance companies to open the province’s auto insurance trade to competition, but it is rolling out a series of changes intended to make British Columbians feel better about the services they must buy from a Crown-owned monopoly.

Attorney-General David Eby says he wants to restore public trust in the Insurance Corp. of B.C., which exclusively provides basic auto insurance to more than three million B.C. drivers.

Mr. Eby has directed the Crown corporation to improve its complaints mechanism, to provide clearer financial reporting and to offer injury settlements – for eligible claims – without revoking claimants’ right to sue.

“We’re taking the steps to improve the oversight, accountability and transparency of ICBC, and to begin the process of rebuilding British Columbians’ trust and confidence in our public auto insurer,” he told a news conference.

The changes were announced Wednesday, one day after the organization representing private insurance companies, the Insurance Bureau of Canada, released a report that found B.C. drivers are paying up to 42 per cent more for their auto insurance than drivers in Alberta pay for similar coverage.

Aaron Sutherland, the Pacific regional vice-president of the Insurance Bureau of Canada, said in an interview Wednesday that B.C.’s drivers are paying too much for public auto insurance.

“If ICBC is so convinced that they’re the best game in town, they can prove it: They should open themselves to competition. And if they’re right, nothing would change, but if they are wrong, drivers will start saving money, and that’s what this is all about.”

He said the province has thwarted competition, even for optional insurance that can be purchased to top up coverage that is not included in B.C.’s basic vehicle insurance.

There are 200 private insurance companies in Canada that could offer competition for services, Mr. Sutherland added, but ICBC will not provide information on drivers that would allow them to evaluate rates. As a consequence, only two companies have ventured into the B.C. market with optional insurance packages.

“If we want to see more choice on optional auto insurance, what we need to see is equal access for other insurers to drivers’ record and claims history,” he said.

Mr. Eby said the Insurance Bureau has wrongly calculated insurance rates to make ICBC rates look non-competitive. And, he said, privatizing auto insurance would drive up rates for a majority of drivers. “The only drivers to benefit would be about a third of drivers over the age of 45. … And because of that, we will not be going in that direction.”

Instead, Mr. Eby said he is focused on seeking to reduce insurance premiums and improving customer service at ICBC.

He said ICBC will offer plain-language financial reporting so customers will be able to find out how their insurance premiums are being spent. An independent “fairness office” will have more powers to investigate complaints and require public accountability from ICBC. And the Crown corporation will offer “pre-litigation payments.” Under the current system, claimants cannot accept a proposed settlement award from ICBC without having to give up their right to go to court if they believe they are entitled to more.

Mr. Eby says he was blind-sided by the depth of ICBC’s financial challenges when he took over responsibility for the Crown corporation in 2017. He has introduced a series of reforms designed to reduce costs and lower accident rates. On Wednesday, he said those changes have helped stabilize ICBC’s costs, but he promised further actions to try to reduce insurance rates.

It is not clear yet if drivers will pay more this year. The government directed ICBC to delay its annual rate application to the regulator until February, as it seeks additional savings.

Source: The Globe and Mail

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