Money laundering at Lower Mainland casinos and ICBC’s fiscal situation were two main topics of discussion at a joint meeting between the Cranbrook Chamber of Commerce and the Rotary Club on Thursday afternoon.
Eby explained how criminals were taking advantage of lax regulations and laundering cash through the casino system, before moving into some of the problems plaguing ICBC, such as increased payouts amid ever-increasing litigation stemming from motor vehicle accident injury claims.
Eby emphasized the B.C. government is not considering a move to a private insurance model, he told the crowd.
“Public insurance was set up in BC with the recognition that there are large groups of people who would be paying disproportionally high insurance and were paying disproportionally high insurance out of the private model,” Eby said.
“That was the history of ICBC which we sometimes forget. I’m a big believer in the idea of a public insurer, it has worked well in the past, it’s provided a lot of benefits to British Columbians — and services — that would otherwise be paid for through taxes at a lower cost.”
ICBC had been projected to lose $30 million before the May 2018 election, but as it turned out, the crown corporation lost $900 million, said Eby.
That all adds up to a $1.3 billion loss in the current fiscal year, he continued.
To staunch the financial losses, Eby said a number of reforms were put into place such as resolving minor disputes through a civil resolution tribunal and capping some litigation damages, such as pain and suffering to $5,500, when the average payout was $16,500.
Those changes are expected to save in the neighbourhood of $1 billion, Eby said.
At the same time, benefits were increased to single-vehicle incidents, such as hitting a moose, as those payouts hadn’t been tweaked since the 1990s.
At the end of the day, ICBC’s financial situation is also a reflection of the increasing number of accidents on BC roads, whether from poor decisions or distracted driving, Eby said.
BC has jacked up distracted driving penalties and also customized insurance rates to drivers instead of vehicles through a rate design regime.
“Rate design will make it much more like a custom suit now,” Eby said. “So if you are lending out your car to a high-risk driver, you will be paying more for your insurance. If you don’t, then you won’t.
Under the current system, if you lend out your car to a high risk driver and that driver has an accident, your insurance goes up and the driver who actually caused the accident has no consequence when they go and get their own insurance.”
He said that rate design should, on average, decrease insurance rates for good drivers by as much as 20 per cent, while increasing rates for high-risk drivers by 20 per cent.
Eby opened his presentation talking about a trans-national money laundering scheme at Lower Mainland casinos.
The gig, known as the Vancouver model, was this: with currency restrictions in China, meaning people couldn’t take money out of the country, a gang would meet a gambler in the parking lot with a bag of cash and the gambler would transfer money to another account in China.
The gambler would then keep the cash and go in to a casino and gamble with it.
The ruse wasn’t discovered due to gaps in regulatory oversight, said Eby.
A report from Peter Gernam, a former senior RCMP leader, identified a number of recommendations such as separating the regulator from B.C. Lottery Corp.
Eby says the government has also implemented one of German’s key recommendations, which now prevents casinos from taking large bulk cash of $10,000 within a 24 hour period, without knowing where the money came from.