Liberals erased part of insurance report
B.C. government in 2014 ignored recommendations to fix ICBC, then hid them from public
VICTORIA — An independent review of the Insurance Corp. of B.C. three years ago recommended caps on minor injury claims and premium hikes for high-risk drivers — moves that could have helped stave off a growing financial crisis in the Crown auto insurer but were instead quietly removed from the final report by the Liberal government.
A draft of a Dec. 23, 2014, report by consultant Ernst & Young, obtained by Postmedia News, contained seven pages outlining changes designed to put ICBC on more stable financial footing.
The recommendations were not only ignored by the government, which commissioned the report, but a final version released publicly on March 16, 2015, was scrubbed to remove all seven pages and relevant recommendations.
The suggestions included caps on soft tissue injury claims in minor accidents, higher insurance for drivers with histories of infractions like distracted driving, and changes to how government sets ICBC’s capital reserve levels. Collectively, the reforms could have saved hundreds of millions annually, according to the report.
“ICBC has some work to do in further optimizing its operations; however, these changes alone will not contain claims cost growth to within sustainable levels in the medium to long term, particular with regards to bodily injury claims costs,” read a section of the draft report that was removed from the final version.
“In order to sustain low rates going forward while continuing to work in the best interest of policy holders, the province could consider the levers at its disposal such as introducing limited product reform to cap benefits for minor injuries and adjusting the premium structure to ensure equity among policyholders by driving risk rating.
“This would require a bold change in policy direction but the results observed in other jurisdictions in terms of claims cost reductions are compelling.”
It wasn’t until 2017 that those ideas were seriously considered, after Ernst & Young wrote a second report with many of the same recommendations. By then, ICBC’s financial state had deteriorated so badly the report warned the Crown corporation was unsustainable and motorists would need to brace for insurance hikes of almost 30 per cent in the next two years unless drastic changes were made.
Attorney General David Eby has said he’s exploring caps on claims, among other changes, to salvage ICBC from its path to insolvency. ICBC lost $612 million in 2016-17.
“There’s now evidence the old government was told how to prevent a crisis at ICBC and protect drivers, but instead of looking out for B.C. motorists, the B.C. Liberals decided to look out for themselves,” Transportation Minister Claire Trevena said in a statement Monday.
“It’s outrageous that the B.C. Liberal government not only ignored this advice but they deleted the recommendation as if it never existed.”
ICBC said Monday it did not commission the report — it was produced for the Ministry of Transportation. ICBC’s board only received the final March version of the report, said spokesman Adam Grossman.
“There’s now evidence the old government was told how to prevent a crisis at ICBC and protect drivers.” — David Eby