ICBC is providing a $110 rebate to eligible drivers.

Additionally, basic rates will be maintained until March 31, 2026, marking six years in a row with no increases.

“Six years of stable rates and the fourth rebate for drivers comes as a result of years of work turning ICBC around so that it actually works for people,” said Premier David Eby on Wednesday. “On average, drivers have saved $2,000 in rebates and lower rates since our reforms to ensure that when auto insurance is properly managed, people in B.C. benefit.”

The Province says that due to positive investment performance and responsible fiscal management, ICBC’s preliminary net income for the fiscal year 2023-24 is an estimated $1.5 billion. The total amount of the rebate is $400 million, equivalent to $110 per eligible insurance policy. As the law now requires, the balance will stay with ICBC, helping to stabilize rates for drivers over the long term. The final, audited net income figure, along with a full financial summary of the fiscal year, will be released this summer.

All personal and commercial ICBC customers who had an active eligible basic insurance policy in February 2024 will receive the rebate, totalling roughly 3.6 million policies.

“ICBC is able to return $400 million to drivers because of prudent fiscal management that puts people first, and our commitment in law that ICBC’s surplus should go toward benefiting drivers instead of going to government coffers,” said Mike Farnworth, Minister of Public Safety and Solicitor General. “This rebate, alongside the decision to not increase basic rates for six years in a row, underscores the benefit of a public auto insurer. When private insurance companies make a profit, it’s at the expense of, not for the benefit of drivers.”

An important barometer of ICBC’s financial strength is its ability to absorb adverse risks and to still fulfil its obligations to policyholders, referred to as the minimum capital test (MCT). In 2015, the indicator for ICBC’s basic capital fell below 85%, and by 2018, it had effectively reached 0%. Following the introduction of Enhanced Care, ICBC’s financial position has significantly improved, and today, the estimate for ICBC’s basic MCT is above 160% and projected to remain strong.

David Wong, ICBC’s new president and CEO, has significant experience in financial management and a commitment to customer-centric services. His leadership focus aligns with ICBC’s mission to prioritize affordability and enhance customer convenience.

“To receive your rebate as quickly as possible, we encourage customers to update their addresses and sign up for direct deposit on https://icbc.com/ or through an Autoplan broker,” Wong said. “Initial rebate payments will commence in late May, with ongoing processing until the end of July. Customers receiving rebates via cheque are advised to allow additional time for mail processing and delivery.”

How drivers receive the rebate depends on how they paid for their insurance. For people who paid by credit card, the rebate will be refunded to the credit card. People who paid by cash, cheque or debit can sign up for direct deposit or will receive a cheque from ICBC. For people who are on a payment plan, the rebate will be applied directly to an upcoming payment.

The Province says that as a public insurer, ICBC remains dedicated to providing essential services to people in British Columbia. In addition to insurance coverage that provides vehicle repairs and recovery benefits for people involved in crashes, ICBC provides driver licensing and identification services, and invests in road-safety initiatives.

To learn more about ICBC, visit: https://icbc.com/2024rebate

BACKGROUNDER
What to know about ICBC basic rates update and customer rebate

Due to positive performance and strong fiscal management, ICBC’s preliminary net income for the fiscal year 2023-24 is an estimated $1.5 billion. The total amount of the rebate is roughly $398 million, equivalent to $110 per eligible insurance policy. The cost to process and distribute the rebate is $3.9 million. Following legislative reforms, the net income balance will stay with ICBC, helping to stabilize rates for drivers over the long term. The final, audited net income figure, along with a full financial summary of the fiscal year, will be released this summer.

On average, since government enacted major ICBC reforms, customers with full ICBC basic and optional coverage have received $530 in four separate rebates and saved $490 per year on their insurance with the implementation of the Enhanced Care model.

The list of rebates with the average amounts is as follows:

* April 2021 – first COVID-19 rebate: $190

* July 2021 – second COVID-19 rebate: $120

* 2022 – relief rebate: $110 (flat)

* 2024 – ICBC rebate: $110 (flat)

ICBC basic rate:

In May 2021, ICBC transitioned from a legal-based insurance system to its care-based model called Enhanced Care. This lower-cost model not only provides better care and recovery benefits to people injured in crashes, but it has also lowered insurance rates and allowed ICBC to build back its capital reserves. In the first year under the new model, the basic insurance rate decreased by 15% and has been flat since then with no increases.

An insurer’s capital reserves are measured by a ratio called the minimum capital test (MCT). ICBC’s basic insurance MCT reached a low of -18% in fiscal year 2019-20. Since then, with government and ICBC actions such as the implementation of Enhanced Care, ICBC’s estimate for its basic MCT is above 160% and projected to be strong going forward.

ICBC rebate:

ICBC has roughly $18 billion in investments, which are managed by the British Columbia Investment Management Corporation (BCI). When ICBC’s investment portfolio does well, it has investment income to help offset claims costs, and higher investment returns in the future help reduce the need for rate increases.

At the beginning of fiscal 2024-25, much of the forecasting community was predicting a challenging year for equity markets. ICBC’s planned investment income for the fiscal year was $134 million. However, the global equity market had a remarkable bull run between November 2023 and March 2024, which drove ICBC’s unaudited net investment income up substantially higher than anticipated to $1.2 billion.

The improvement in investment income along with favourable claims costs compared to its third quarter estimates are the key drivers behind ICBC’s preliminary net income of approximately $1.5 billion. Four hundred million dollars will be rebated to eligible customers through a one-time rebate and the remainder will go toward building capital reserves, ensuring ICBC remains on solid financial ground.

Rebate eligibility:

Roughly 3.6 million customer policies are eligible for the rebate. All personal and commercial customers who had an active eligible basic insurance policy in February 2024 will receive the rebate. Keeping in mind that one driver can hold multiple polices, ICBC estimates nearly 2.7 million drivers will receive the rebate. Some vehicles with an average basic premium of less than $250 over a two-year period will not be eligible for the rebate. These include golf carts, off-road vehicles, utility vehicles, limited-speed motorcycles, trailers and vehicles insured in a collector rate class, among others. Temporary operating permits and storage policies are also not eligible. More information about the rebate, including eligibility and timelines, is available here: https://icbc.com/