UPDATED: The implications of ICBC’s 2016 rate changes on its capital reserves

September 6, 2016


by Richard C. McCandless,


In establishing the 2016 policy year (PY) Basic rates the government was limited by the 2013 ‘rate smoothing’ limit of 1.5% greater or less than the 5.5% increase approved for 2015. It was also constrained by the minimum 100% capital ratio, which is calculated on ICBC’s fiscal year.

The different accident and policy years adds a level of complexity for ICBC to translate the calendar year to the policy year, and creating a third period as the fiscal year complicates comparisons all the more.

The BC Utilities Commission has allowed ICBC to present its justification for the Basic rate changes without a detailed fiscal year comparison, not does ICBC forecast multi-year impacts of the annual changes, as ICBC does in its annual service plan at the corporate level.

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UPDATED Occasional Paer No. 12A 31 August 2016