ICBC Files 15 Percent Reduction Request for Compulsory Basic Program
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This Commentary reviews ICBC's Basic rate request filing for the 23-month period commencing 1 May 2021. Many questions remain.
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Manitoba Public Auto Insurer Increasing COVID-19 Rebate
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The Manitoba public insurer is providing rebates related to lower costs resulting from the pandemic. ICBC, by contrast, has an unhealthy financial position and the government should resist the urge to follow suit.
Alberta Adopts No-Fault Insurance for Vehicle Damage and Other Changes to Reduce Costs
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Through legislation and regulatory changes Alberta is making a number of significant changes to the auto insurance system in that province. A major change is the adoption of a no-fault model for vehicle/property damage.
ICBC's Massive Increase to the Reserve for Pending Injury Claims Key to Recent Losses
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In the last two years ICBC has increased the reserve for prior years claims by an extraordinary $2.4 billion. This paper attempts to find the reason for this huge increase.
Intact Financial Abandons the BC Auto Insurance Market
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This commentary discusses the recent announcement by Intact Financial that it would stop selling Optional auto insurance in BC.
Alberta Report Recommends Switch to No-Fault Auto Insurance
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A committe appointed by the Alberta government has recommended that the government scrap the hybrid tort scheme and legislate a no-fault auto insurance plan as oon as possible. This paper has a closer look.
Recently Released Claims Data Explains ICBC's Improved Finances
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Using claims data obtained through the FOI process, this paper summarizes the recent decline in ICBC's Basic claims and claim costs. This data should be part of ICBC's regular reporting.
Auto Insurance Affordability is an Issue in the Saskatchewan Election
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Auto insurance affordability is an issue in the Saskatchewan election, where robust capital reserves have promted the opposition NDP to pledge rebates and a rate reduction. The main parties in BC have avoided the issue of ICBC's low capital reserves.
Liberal Party's Populist Approach for Auto Insurance Severely Flawed
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The Liberal party's populist promises to remake the auto insurance market have significant problems for ICBC and for policyholdrs in general. Affordability and expanded coverage can be be achieved theough adhering to the monopoly no-fault model.
ICBC's Q1 Results: Rebound in Investments Helps Rebuild Some Equity
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The first quarter results show a marked rebound in net income and the value of the financial investments compared to three months ago. This paper highlights three areas.
Taxpayer Federation's Call for a COVID-19 Rebate Misplaced
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With a slide into negative equity, ICBC does not have any capacity to provide policyholders with a COVID-19 driven rebate as advocated by the BC wing of the Canadian Taxpayers Federation. To do so would expose taxpayers to a greater risk of subsidizing policyholders.
ICBC's Premium Revenue Rebounds to More Normal Levels: Specific Operational Data Not Available
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ICBC recently reported a significant increase in vehicle reinsurance reflecting a return to more normal vehicle use. Unfortunately its financial data for 2019/20 has not been released by the government, nor any service or performance data.
Is Alberta About to Expand No-Fault Auto Insurance?
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A pending report from a government appointed panel is expected to recommend an expansion of no-fault insurance in that province. The attached commentary has a closer look.
Manitoba" Auto Insurer Plans a 10.5% Rate Reduction
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The public auto insurer in Manitoba plans an overall 10.5% reduction in Basic rates for April 2021. Because the new no-fault model for ICBC is based on the Manitoba system a closer look is warranted.
Low Interest Rates Bad News for ICBC's and BC Hydro's Balance Sheets
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The prospect of continuing low interest rates will place further strain on the financial statements of ICBC and BC Hydro. The poor financial health could twart government attempts to lower insurace rates or provide cheaper electricity.
ICBC Report Distorts the Financial Impact of COVID-19
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A new ICBC report distorts the impact of the COVID-19 pandemic on its revenue and expenditures, presenting what is likely the worst case scenario. This further erodes the public's trust in our public auto insurer.
Where Is ICBC's Report on a Possible Rebate?
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A month ago Attorney General Eby said he had asked ICBC for a report on the impact of the COVID-19 pandemic on its finances. This commentary suggests what such a report might disclose.
Will the BCUC be Permitted to Decide if ICBC's Windfall Savings are Rebated to Policyholders?
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The government should take the opportunity presented by ICBC's windfall claims cost savings to de-politicize rate decisions. It should allow the BCUC to make the determination as to whether the savings should be rebated to policyholders.
Will ICBC Reduce Premiums to Reflect Lower Risk and Fewer Claims?
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This paper reviews the decision of Allstate Insurance to provide a premium rebate to return some of the windfall claims savings to its customers. The government has not stated if ICBC will also return some of the windfall savings to policyholders.
Looming Insolvency: Covid-19 Threatens ICBC's Financial Health
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The recent financial market melt-down has reduced ICBC investment assets. ICBC's lack of a capital reserve will likely mean that its liabilites will exceed its assets by year-end.
Fact Check: ICBC Losses Have Not Displaced Spending on Other Programs
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Finance Minister Carole James suggested that the losses at ICBC have displaced government spending on other programs. This is not correct.
Move to No-Fault Insurance Achieves Government's Affordability Objective
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The recent decision by the government to adopt a no-fault enhanced care model marks a fundamental change for auto insurance in B.C. This paper reviews some of the benefits.
Unlike ICBC Other Public Auto Insurers Have Much Lower Rates and Healthy Finances
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This paper suggests that the arguing that private insurers could provide lower rates compared to a public model misses the main reason for the lower rates enjoyed by drivers in Saskatchewan and Manitoba. The lower rates are the result of the no-fault liability model.
Restoring Public Trust in ICBC Requires More Than the Tepid Moves Announced by Minister Eby
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The changes announced by minister Eby do little to improve accountability at ICBC. This paper provides suggestions to improve ICBC's public reports.
Recent Initiatives Respecting Auto Insurance in B.C.
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This commentary reviews a number of developments respecting auto insurance in B.C. and Alberta that occurred during the last two weeks.
ICBC's Second Quarter 2019/20 Financial Results
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This commentary reviews ICBC's April to September 2019 financial report to determine if the forecasted $91 million year-end operating loss is reasonable. Unfortunately, ICBC continues to restrict the information available making a proper review impossible.
ICBC's Losses Do Not Automatically Result in a Reduction in Government Services
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Public sector accounting standards require that ICBC's operating losses be deducted from the government's total revenue, but this does not translate into a reduction in funding for government programs. The accounting standard adds to the confusion about the impact of ICBC's operations on the government's finances.
Flurry of Media Reports on ICBC's Finances
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A summary of media reports from October 24th to November 1st respecting ICBC's finances. Includes comments by Todd Stone and hints by David Eby about no-fault.
Manitoba Government Charged with Interfering with Crown Insurer
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This paper reviews recent initiatives by the Manitoba government to provide direction to the Crown insurer and the provincial regulator. A comparison is made to British Columbia, where provincial governments have a been interfering with ICBC and the B.C. Utilities Commission for years.
Was Limiting Expert Reports Good Public Policy or a Gambit to Avoid Insolvency at ICBC?
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It now appears that the cabinet-ordered limit on expert reports was rushed to avoid insolvency at ICBC as of 31 March 2019.
ICBC Provides Details on the Expert Report Savings
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On October 18, 2019, Lindsay Matthews provided a response to my questions about the estimated savings resulting from the government's limitation on the number of expert reports.
Minister Responsible for ICBC Says Those Facing Large Premium Increases Should Buy Less Insurance
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Yesterday on CFAX radio, Attorney General David Eby suggested that young and inexperienced policyholders facing massive price increases should purchase less insurance. My comments are attached.
Higher Risk Alberta Drivers Denied Optional Coverage
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In the evolving "crisis" in the Alberta auto insurance market it now appears that drivers with moving violation convictions are being denied Optional coverage.
ICBC's First Quarter Report: Too Soon to Draw Conclusions
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This Commentary discusses key aspects of the Q1 financial report. ICBC needs to include service measures with the financial data.
Alberta Government Removes Cap on Auto Insurance Rate Increases.
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The new Albetra government has eliminated the 5% limit on auto insurance rate increases imposed by the NDP government in December 2017. The limit, combined with large increases in claims costs, was causing distortions in the market, and large rate increases. The government has yet to address the coverage issues. The B.C. government continues to limit increases in ICBC's Basic insurance.
Insurance Bureau's Latest Auto Insurance Price Comparison Highly Simplistic
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A new provincial auto insurance price comparison estimate showing B.C. drivers paying the highest rates is highly simplistic, as demonstrated in my Commentary. Correspondence with Aaron Sutherland of the ISB is also included. Related item;https://pressprogress.ca/bc-news-outlets-exaggerated-the-cost-of-public-car-insurance-their-numbers-came-from-a-big-insurance-lobbyist/
Insurance Brokers Association Exectutive Director Supports Public Auto Insurance Model
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In the August edition of The Broker magazine Chuck Byrne, the exectutive director of the Insurance Brokers Association, wrote an editorial in support of the public model for the provision of compulsory insurance. Exerpts of this editorial are attached.
New Report Shows Auto Insurance Rates Escalating in Alberta and Ontario: Is More Competition Really the Key to Lower Rates?
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A new report shows significant increases in the cost of auto insurance in Alberta and Ontario. This seems to contridict the claims that competition results in lower prices.
Manitoba Insurer Plans Minor Rate Increase for 2020: Strengthened Capital Reserve.
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The MPI is on solid financial footing and seeks to stregthen the Basic capital reserve. It is seeking a minimal Basic rte increase for 2020. The no-faulth auto insurance model in Manitoba is compared to the scheme in BC.
Are B.C. Drivers Adequately Insured?
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This Commentary attempts to answer the question as to what percentage of BC drivers carry additional third-party liability insurance greater than the $200,000 limit in the compulsory Basic program. ICBC does not make public its Optional sales.
The Cost to ICBC of Aging Drivers.
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The government is lowering the seniors' discount from 25% to 15%, but still requiring other policyholders to pay more to make-up for the lost revenue. What dos this subsidy cost?
Retreat from Transparency: ICBC Deems Average Claims Data Confidential.
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At a time when the concept of a public monopoly providing auto insurance is being questioned, one would expect ICBC to retain the public's support by being transparent and accountable. Unfortunately, the opposite appears to be the philosophy adopted by the management at ICBC as evidenced by witholding the forecast injury severities from public view.
Is the Attorney General Getting Poor Advice from ICBC?
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This commentary explores three areas where ICBC appears to be providing poor advice, focusing in particular on financial forecasting and an apparent move to reduce transparancey and accountability.
Request that the BCUC Overrule ICBC on Filing Injury Claim Severities.
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ICBC has refused to publically file certain historic injury claim severities for settled claims. This request seeks an order from the B.C. Utilities Commission to require ICBC to publicly file the information.
Government Extracts $70 Million from Hard-Pressed ICBC Policyholders.
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This commentary explores how the government receives $70 million annually in driver license fees while ICBC's Basic policyholders must pay the cost as part of their annual insurance. The provincial fee scheme appears contrary to a 1998 Supreme Court of Canada decision respecting fees versus taxes. The government should correct this double payment.
Will ICBC Avoid Insolvency by Year-End 2018/19?
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This commentary discusses two recent changes to how ICBC pays for injury claims, and whether these changes will support a lower deficit forecast for fisal year-end. Whether this will be enough to avoid insolvency by 31 March 2019 is the open question. Also included is Ian Mulgrew's report of 18 February 2019; https://vancouversun.com/opinion/columnists/ian-mulgrew-icbc-trial-strategy-slammed
ICBC Now Insolvent: Is a Taxpayer Bail-out Imminent?
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ICBC's third-quarter report showed an operating loss of $890 million and liabilities exceeding assests by $119 million. ICBC is now insolvent. The question is whether the coverage changes will produce sufficient savings to stablize ICBC's finances?
ICBC Seeks to Reduce Already Minimal Optional Information.
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This paper examines ICBC's request to eliminate information on its Optional program's market share in the context of the lack of information on this aspect of its operation.
Saskatchewan Auto Fund Reports Healthy Second Quarter
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The paper reviews the SAF Q2 results with the forecasted position of the ICBC Basic program for 2018/19.
Financial Meltdown at ICBC May Force Government Bailout.
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The recent 6.3% rate increase filing suggests that the government may be forced to bailout ICBC as the capital reserve is eliminated.
Manitoba Basic Rates to Rise 1.8 Per Cent--ICBC's Increase Likely Much Higher.
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The Manitoba regulator just approved a 1.8% rate increase for complusory auto insurance. Why are the Basic rate increases in Saskatchewan and Manitoba much less than for ICBC?
Government Requires Money-Losing ICBC to Fund More Traffic Enforcement
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The government has directed ICBC to fund more traffic enforcement, but its more of a restoration. And why is the government not funding more police traffic enforcement instead of asking over-burdened policyholders to do it?
Ride-Share Auto Insurance Options
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This paper outlines the insurance plans in Manitoba and Saskatchewan, and the blanket insurance option required by Uber and Lyft.
Ontario Review Promises Greater Transparency and Accountability.
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Commentary on certain aspects of the Ontario government's plans regarding electricity pricing and auto insurance regulation.
New Fraser Institute Paper on ICBC.
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A commentary on a paper released by the Fraser Institute on certain aspects of the finances of ICBC.
Terminology and Perceptions of ICBC.
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Driver-based penalties are increasing by 20% today, with another 20% increase planned for 2019. ICBC calls the penalty a premium, which confuses this penalty with the vehicle premium. Confusion is part of the reason for the low public perception of our auto insurer.
Unknown Driver Fee a Symptom of Larger Problem.
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Is the new penalty and protection fee an abuse of monopoly power and an attempt to achieve risk pricing perfection?
NDP Perpetuates Liberal Practices Regarding ICBC: Keeps Watchdog Confined. September 4, 2018.
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This paper discusses the fact that the NDP government is using cabinet orders to control ICBC's finances and keep the B.C. Utilities Commission confined. These were the tactics used by the previous government to avoid public oversight.
Delayed Rate Increase to Cost ICBC up to $150 million. August 12, 2018.
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The government's decision to postpone a general rate increase until April 2019 will reduce ICBC's already low capital reserve by perhaps $150 million in 2018/19.
Commentary on Results of Opinion Survey on ICBC Rates. May 21, 2018.
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This paper reviews the key results of the government's public opinion survey on potential changes to ICBC's driver penalties and the design of Basic rates.
Fraser Institute Report on ICBC's Finances: Late and Confusing. April 11, 2018.
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My comments on the Fraser Institute's report "The Decline and Fall of ICBC."
Commentary on ICBC Rate Design Proposals. March 8, 2018.
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My comments on certain aspects for the latest proposals to make Basic insurance rates "fairer." It seems that most of the proposals will result in less generous discounts and greter revenue for ICBC.
Accounting Treatment of ICBC's Net Loss Complicates Provincial Budget. February 17, 2018.
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The national public sector accounting rules require that ICBC's net income or loss be counted in the government's revenue. The increase in the net loss reduces revenue, but there is no change in the actual cash being transferred (which is nil). This accounting anomoly requires further review.
Comment: Changes Coming to ICBC's Injury Model. February 8, 2018.
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On 6 February 2018, minister responsible David Eby announced major changes to injury claims process and coverage, with expanded no-fault accident benefits and monetary limits, and a $5,500 cap on pain and suffering claims for "minor" injuries. The government expects that these changes will reduce annual claims costs by approximately $1.0 billion.
The ICBC Blame Game. January 26, 2018.
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My Commentary on how former fiance minister de Jong was calling the shots on ICBC's finances. See also http://vancouversun.com/opinion/columnists/vaughn-palmer-blame-game-aimed-at-de-jong-and-the-restless-candidates and http://vancouversun.com/opinion/columnists/vaughn-palmer-liberals-plan-to-delay-the-fix-at-icbc-fails-miserably
Alberta Caps Auto Insurance Increase at 5 Percent. December 19, 2017.
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The Alberta government has limited the 2017/18 increase in the private vehicle insurance rates to 5%. It stated that the previously allowed 10% maximum increase was not inline with its affordability priority. Background and implications are provided.
Rate Increases for Basic Auto Insurance in BC, Saskatchewan and Manitoba. December 8, 2017.
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The Manitoba regulator recently approved a 2.6% increase in Basic vehicle rates for the coming year. This paper looks at how BC rate increases compare to the publicly-owned no-fault systems in Saskatchewan and Manitoba.
New ICBC Forecast Confirms Financial Crisis is Worsening. November 29, 2017.
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A new ICBC forecast of the Basic program shows major rate hikes are required to keep the capital reserve from being fully depleted within four years.
Times Colonist "Hard Choices Ahead for ICBC." August 3, 2017.
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The Times Colonist editorial correctly blames the Liberal government for allowing ICBC's finances to rapidly deteriorate, and warns of hard choices to come; http://www.timescolonist.com/opinion/editorials/editorial-hard-choices-ahead-for-icbc-1.21569689.
NDP Faces Financial Mess at ICBC, BC Hydro. June 16, 2017.
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Reprint of my article in today's Tyee; https://thetyee.ca/Opinion/2017/06/16/NDP-Faces-Mess/?utm_source=daily&utm_medium=email&utm_campaign=160617
A Commentary on No-Fault Auto Insurance in Ontario. April 5, 2017
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A generally negative survey of the no-fault auto insurance business in Ontario, by the Globe and Mail; http://www.theglobeandmail.com/report-on-business/rob-magazine/the-real-reason-ontarios-auto-insurance-rates-are-so-high/article34560827/
ICBC Fact Check Fraud Costing $600 million? March 9, 2017.
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This Fact Check concludes that ICBC's claim that fraud is costing $600 million annually is significantly exggerated.
ICBC's Steve Crombie Interview Fact Check. March 9, 2017.
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This paper reviews Mr. Crombie's comments in a recent interview as reported by Keith Baldrey in the Burnaby News of March 6, 2017.
ICBC Deficits-Question Period February 22, 2017. February 26, 2017.
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Minister Stone attempts to defend ICBC's deficit forecasts during Question Period on February 22, 2017.
Province Driven ICBC into Trouble February 25, 2017.
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Gary Mason, of The Globe and Mail, reports on the new financial forecast for ICBC; http://www.theglobeandmail.com/news/british-columbia/provinces-file-bungling-has-driven-insurance-corp-of-bc-into-trouble/article34136030/, with a backgrounder.
ICBC's Forecasts for 2016/17 and 2017/18 Show Worsening Outlook. February 22, 2017.
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ICBC's 3rd Quarter 2016/17 forecast, and the 2017/18 forecast show a worsening financial picture. No relief in the government's 2017/18 budget.
Submission to the BC Utilities Commission re ICBC Review. January 24, 2017.
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My submission recommends that the BC Utilities Commission set expectations for ICBC's 2017 rate request, and includes data on forecasted rate requirements and comparisons of Basic rate increases with Saskatchewan and Manitoba.
Times Colonist Editorial -- Cut Insurance Rates. January 8, 2017.
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In a January 8, 2017 editorial the Times Colonist says that the government has to reduce the projected increase in Basic rates; http://www.timescolonist.com/opinion/editorials/editorial-find-ways-to-cut-insurance-rates-1.6542717
ICBC 2016 Basic Rate Request-Final Argument. December 20, 2016.
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"A foolish consistency is the hobgoblin of little minds...."; Richard McCandless submits comments and recommendations to the BC Utilities Commission respecting ICBC's 4.9% Basic rate increase for 2016.
ICBC Basic Claims Costs 2012 to 2015. 12 December 2016.
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This Occasional Paper (No. 18) reviews ICBC claims data from 2012 to 2015 to attempt to identify cost drivers. The outlook for the medium term is as discussed.
Why We Pay Too Much For Auto Insurance. 23 August 2012.
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Richard McCandless commentary in the Times Colonist about the high capital reserves at ICBC; http://www.timescolonist.com/opinion/letters/why-we-pay-too-much-for-auto-insurance-1.1497
Speed Related To Claims Costs. 30 November 2016
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Stephen Hume of The Vancouver Sun provides a fact-based review of how speed increases the chances of serious injury or death; http://vancouversun.com/opinion/columnists/stephen-hume-readers-wont-trade-away-speed-for-lower-insurance-rates
The Growing Burden of the Senior Discount. 30 November 2016.
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Pete McMartin's (the Vancouver Sun) srticle on the growing cost of the 25% senior discount on Basic insurance; http://vancouversun.com/opinion/columnists/pete-mcmartin-driving-is-getting-old-the-growing-burden-of-seniors-insurance
NDP Asks Auditor General To Review ICBC Finances. 29 November 2016.
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Adrian Dix asks Auditor General Bellringer to review ICBC finances in light of projected $1.5 billion capital requirement to continue the Basic rate subsidization; http://vancouversun.com/news/local-news/ndp-wants-auditor-general-to-review-icbc-finances
Unshackle ICBC From Politics. 29 November 2016.
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Times Colonist editorial syas politicians should stop using ICBC rates for political advantage; http://www.timescolonist.com/opinion/editorials/editorial-unshackle-icbc-from-politics-1.3341544
ICBC's Five Year Basic Forecast of 23 November 2016. 24 November 2016.
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My preliminary impressions of ICBC's Basic forecast filed on 23 November 2016.
Political Interference Hobbles ICBC. 26 November 2016.
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The Vancouver Sun editorial calls on the government to restore the BC Utilities Commission's authority to regulate ICBC rates, saying that the government's cap on Basic rates has put ICBC in an untenable financial position; http://vancouversun.com/opinion/editorials/editorial-political-interference-hobbles-icbc
Prepare for ICBC Rate Shock. 23 November 2016.
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Richard McCandless, in The Times Colonist, outlines the looming financial crisis at ICBC; http://www.timescolonist.com/opinion/op-ed/be-prepared-for-icbc-rate-increase-shock-1.3101218
ICBC Statistics 2006 to 2014. 1 July 2014
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ICBC's high level stastics as compiled by Integrity BC; http://www.integritybc.ca/?page_id=6149
BC Injury Law web site
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A link to an index of court decisions regarding personal injury and other releated matters; http://bc-injury-law.com/
McCandless Submission to the BC Utilities Commission Re: ICBC 2014 Rates. 12 March 2015.
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My submision to the BC Utilities Commission on ICBC's 2014 rate request, including a history of the capital reserve and government directives; http://www.bcuc.com/Documents/Arguments/2015/DOC_43293_03-12-2015_McCandless_Final-Argument.pdf
McCandless Submission to the BC Utilities Commission Re ICBC 2015 Rates. 14 March 2016.
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My survey of ICBC's 2015 rate request and recommendations to the BC Utilities Commission; http://www.bcuc.com/Documents/Arguments/2016/DOC_45935_03-14-2016_McCandless_Final-Argument.pdf
Responsible Vehicle Owners Press-Ganged to Keep Good Ship British Columbia Fiscally Afloat. 3 June 2014
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How the government relies on ICBC's Optional insurance to generate excess profits. 3 June 2014.
Observations on the August 2012 Review of ICBC by the Internal Audit and Advisory Services 21 August 2012
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Comments on the August 2012 review of ICBC by the government's Internal Audit and Advisory Services. 21 August 2012. The report https://www2.gov.bc.ca/assets/gov/british-columbians-our-governments/services-policies-for-government/internal-corporate-services/internal-audits/icbc-review.pdf