Definitions

1In this Special Direction:

"Act" means the Insurance Corporation Act;

"capital available" means capital available as that term is defined in

(a)the regulations and guidelines made under section 515 (2) of the Insurance Companies Act (Canada), and

(b)the Guidelines for Minimum Capital Test (MCT) for Federally Regulated Property and Casualty Insurance Companies number A-1 dated July, 2003 issued by the Office of Superintendent of Financial Institutions;

"MCT" means MCT as that term is defined in

(a)the regulations and guidelines made under section 515 (2) of the Insurance Companies Act (Canada), and

(b)the Guidelines for Minimum Capital Test (MCT) for Federally Regulated Property and Casualty Insurance Companies number A-1 dated July, 2003 issued by the Office of Superintendent of Financial Institutions.

Application

2This Special Direction is issued to the commission under section 47 of the Act and section 3 of the Utilities Commission Act.

Directions relating to the corporation generally

3(1)  With respect to the exercise of its powers and functions under the Act in relation to the corporation generally, the commission must do the following:

(a)set, for 2004, a net income target for the corporation generally, in the amount of $36 million;

(b)require the corporation to achieve, by December 31, 2014, and to maintain, after that date, capital available equal to at least 110% of MCT, and, for that purpose,

(i)Repealed. [B.C. Reg. 300/2005, s. (a).]

(ii)the commission must set rates for the corporation’s universal compulsory automobile insurance business in a way that will allow the corporation to achieve, by December 31, 2014, and to maintain after that date, capital available in relation to its universal compulsory insurance business equal to at least 100% of MCT;

(c)subject to paragraphs (c.1) and (e), for each year for which it fixes universal compulsory automobile insurance rates, fix those rates on the basis of accepted actuarial practice so that those rates allow the corporation to collect sufficient revenue,

(i)for 2004, to achieve the net income target set for that year under paragraph (a),

(ii)for each following year for which rates are set, to pay the following:

(A)the costs that are to be incurred by the corporation in that year for road safety programs under section 7 (i) of the Act, including, without limitation, payments by the corporation to any level of government with respect to road safety;

(B)the costs that are to be incurred by the corporation in that year for vehicle licensing, driver licensing and other services and activities of the corporation under section 7 (g) and (h) of the Act that are to be undertaken in that year in accordance with the agreement, as amended from time to time, entitled "Service Agreement between The Ministry of Public Safety and Solicitor General and the Insurance Corporation of British Columbia" and dated as of September 1, 2003;

(C)the payments that the corporation is to make in that year under the agreement entitled "Memorandum of Understanding between B.C. Provincial Government and ICBC" and executed in February, 2003;

(D)the remuneration that the corporation is to pay in that year to persons appointed as agents by the corporation under section 16 of the Insurance (Motor Vehicle) Act for collecting government fees, fines and other amounts payable by the corporation to the government and for collecting premiums, fees, debts and other revenue on behalf of the corporation;

(E)the payments that the corporation is to make in that year under the agreement entitled "Traffic and Road Safety Law Enforcement Funding Memorandum of Understanding" made between the corporation and the government as represented by the Minister of Public Safety and Solicitor General and dated December 2, 2003, and

(iii)for 2005 and each following year for which rates are set, to achieve or maintain, as the case may be, the capital available required by the capital available target established for that year under paragraph (b);

(c.1)when regulating and fixing universal compulsory automobile insurance rates, regulate and fix those rates in a manner that recognizes and accepts actions taken by the corporation in compliance with government directives issued to the corporation;

(d)subject to subsection (2) of this section, ensure that universal compulsory automobile insurance rates are not based on age, gender or marital status;

(e)ensure that increases or decreases in universal compulsory automobile insurance rates are phased in in such a way that those rates remain relatively stable and predictable.

(2)  The commission may approve universal compulsory automobile insurance rates that provide discounts to or are otherwise preferential for

(a)persons who are at least 65 years of age, or

(b)persons with disabilities.

(3)  In regulating and fixing rates for the corporation, the commission must treat any premiums levied under section 34 (1.1) (e) of the Insurance (Motor Vehicle) Act as revenue for the corporation's universal compulsory automobile insurance business.

(4)  In this section, "government directive" means a directive in writing to the corporation

(a)given by the minister responsible for Part 1 of the Act, and

(b)approved by the Lieutenant Governor in Council.

[am. B.C. Regs. 313/2004, s. 1; 300/2005.]

Directions relating to the corporation's optional automobile insurance business

4(1)  With respect to the exercise of its powers and functions under the Act in relation to the corporation's optional automobile insurance business, the commission

(a)must, for 2004, set a net income target of $0 for the corporation's optional automobile insurance business,

(b)must require the corporation to achieve by December 31, 2010 and to maintain, after that date, capital available in relation to the corporation's optional automobile insurance business equal to at least 200% of MCT,

(c)must require the corporation to do the following:

(i)as at the beginning of the corporation's 2004 fiscal year, allocate to the corporation's optional automobile insurance business that portion of the corporation's retained earnings for its 2003 fiscal year that is necessary to allow the corporation to achieve, in its 2004 fiscal year, capital available in relation to the corporation's optional automobile insurance business equal to 170% of MCT;

(ii)as at the beginning of the corporation's 2004 fiscal year, allocate the balance of the corporation's retained earnings for its 2003 fiscal year to the corporation's universal compulsory insurance business;

(iii)advise the commission of those allocations, and

(d)must not fix rates applicable to optional insurance.

(2)  In determining, under section 12 of the Utilities Commission Act, whether disclosure of information with respect to the corporation's optional automobile insurance business is necessary for the administration of the Utilities Commission Act as it applies to the corporation, the commission must consider the effect of disclosure of the information on the corporation's ability to compete in the optional automobile insurance market on a basis similar to its competitors and the harm to the corporation's competitive position that may result from the disclosure of the information.

[am. B.C. Reg. 313/2004, s. 2.]