ICBC rate hike of 5.5 per cent would be lower than projected

ICBC is asking to hike basic insurance rates by 5.5 per cent, saying that the applied for raise is lower than the 6.7 per cent maximum allowed under current legislation.

The increase which has been filed for approval with the B.C. Utilities Commission (BCUC) would mean an average increase of $3.70 on customers' monthly bills.

• ICBC rates could climb 6.7% because of fraud, spike in claims
• 2015 tax, rate and fare hikes for B.C. residents

"It is going up 5.5 per cent really to offset the number and the cost of the claims that we are receiving about seven thousand more new injury claims in the last 12 months," said Mark Blucher, president and CEO of ICBC, Thursday.

Transportation Minister Todd Stone admitted Thursday that he was disappointed the rate rise wasn't lower, but rejected the idea that the province could forgo their $160 million dividend from ICBC, saying that would affect the province's fiscal plan.

Stone said that leaving the dividend with ICBC would only bring the rate down by 0.3 per cent, and would "blow a hole" in the province's fiscal plan.

In August, Blucher suggestedthe Crown corporation would request the full 6.7 per cent increase.

But, at that point, Stone said such an increase would be "unacceptable" and he was working with the provincial insurance company to minimize the rate hike.

In the end, the government allowed ICBC to transfer $450 million from its optional account into the corporation's basic account to make up the difference.

"In the best interest of our customers, we have worked alongside government during the last few weeks to identify strategies to help lower both this year's rate increase and to attempt to help alleviate the expected ongoing pressure injury claims will continue to put on insurance rates in future years," said Blucher in a statement Thursday.