Insurance Corporation of British Columbia

The Insurance Corporation of British Columbia (ICBC) is a Crown Corporation owned by the provincial government of British Columbia that exists to insure provide universal auto insurance to drivers in British Columbia. The Insurance Corporation is responsible for much of the driver regulation within the province.

Monopoly of ICBC

The Insurance Corporation of British Columbia only operates in British Columbia. All vehicles registered in and driven or parked in public in British Columbia has to have basic car insurance from the Insurance Corporation. Private insurers can offer additional optional coverage, which is also offered by the Insurance Corporation.

Insurance Corporation Autoplan and Optional coverage

Autoplan is the name of the basic coverage over which it holds a monopoly in the province. It is purchased through independent brokers. It covers third party and some accident damage. The Autoplan prices are set by the Utilities Commission of British Columbia. Optional Coverage is provided for items such as full accident coverage and theft; this is neither regulated nor a monopoly.

Insurance Corporation Factors used in pricing

Unlike private auto insurance companies the ICBC is legally prohibited from setting its premiums according to factors such as marital status, age or sex. It can and does set premiums according to the claims and accident history, the location and type of car.

Insurance Corporation Ownership and Regulation

The Insurance Corporation of British Columbia was set up by the provincial government of British Columbia in 1973. It has always been a provincial Crown Corporation. Its aim was to provide car insurance to all drivers in British Columbia. Since that time it has taken various other roles that are not related to the central function of providing auto insurance. All income stays within the Insurance Corporation of British Columbia and is not paid out to shareholders or the government. This is in order to keep car insurance premiums predictably low.

Insurance Corporation Controversy

The Insurance Corporation has been a subject of controversy as it was set up by the left leaning New Democratic Party. There has been agitation to either liberalize the market or privatize the Corporation. Despite the fact that the New Democratic Party has been out of power for most of this time, the agitation has met with limited success with the ability of private companies to offer optional auto insurance on top of the basic car insurance offered by the ICBC.

British Columbia Utilities Commission

Since 2003 the Corporation has been regulated by the British Columbia Utilities Commission. Due to some disputes with the Commission, it is currently trying to change its regulatory regime and get a more streamlined set of procedures.

Due to the practice of not paying out any dividends and keeping all profits within the Corporation a large financial surplus has risen over time. This is kept in order to smooth out variations of income over the years.

Due to its quasi-monopoly status, the Insurance Corporation of British Columbia has proved to be reasonably profitable over time, especially for a public sector organization. Its loss ratio, a key measure of insurance companies’ profitability, was 77.4% in 2008 - although in each of the four previous years it was higher.

Insurance Corporation Regulatory Responsibilities

The Insurance Corporation of British Columbia is fully owned by the province of British Columbia. Due to this it has assumed a number of regulatory responsibilities on behalf of the provincial government. The responsibilities include:
- Vehicle registration and licensing
- Driver registration - Including test taking and renewals
- Penalties - mainly the collection of tickets and fines
- Road safety - including education campaigns in schools and on the media