Editorial: ICBC report was fiddled

The B.C. Liberals have some explaining to do. They fiddled a report on ICBC and buried recommendations that might have helped fix the problems at the Crown auto insurer.

While the Liberals will, no doubt, grasp at flimsy excuses, British Columbians should not be fooled. The previous government hid important recommendations while the corporation’s financial situation got steadily worse.

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Consultant EY (formerly Ernst & Young) submitted a draft of a Dec. 23, 2014, report to the Ministry of Transportation that included seven pages of suggested changes. When the government released the report on March 16, 2015, those seven pages and the relevant recommendations had vanished.

The suggestions didn’t come up for discussion until 2017, when the firm submitted a second report that contained many of the same recommendations. In those two years, the ship took on even more water, and ICBC lost $612 million in 2016-17.

The second report warned that the situation was so bad that drivers would have to pay an average of 30 per cent more in premiums to stave off disaster.

The Liberals were notorious for pillaging ICBC and B.C. Hydro for “dividends” that went into the province’s general revenues while the corporations’ debt ballooned, but concealing the report’s recommendations is something else again.

The EY report said the only way to make a difference was to rewrite some of the rules of ICBC’s operations in a way that would save hundreds of millions of dollars a year.

The recommendations included capping soft-tissue injury claims in minor accidents, raising premiums for drivers with histories of infractions such as distracted driving and changing ICBC’s capital-reserve levels.

Injury claims from minor accidents are a big problem. The cost of minor claims has shot up 365 per cent since 2000. Putting a cap on pain-and-suffering awards would be one way of controlling those costs, something that has made a difference in other jurisdictions.

Attorney General David Eby has said he is looking at such changes.

A related issue is the cost of litigation. B.C. is the only province that hasn’t changed the full-litigation system for injury claims, and it shows in ICBC’s bottom line, where 24 per cent of costs go to litigation. That’s more than is paid to claimants for minor injuries.

While Eby has rejected switching to no-fault insurance, he was open to the idea of the “comprehensive-care model,” in which insurers pay for the care injured people need, instead of waiting until a court case is settled. Other jurisdictions have found that claims are settled more quickly and more of the money goes to claimants.

The recommendations won’t sit well with some people, but changes have to be made to save ICBC from failing. The B.C. Liberals avoided telling British Columbians about those potentially controversial reforms because they were fixated on keeping rates low to curry favour with voters, as they drained off excess capital.

Eby has promised to stop raiding the piggy bank, but things have deteriorated so far that that alone won’t be enough to save the corporation. Hard decisions have to be made, and they will hurt drivers in their wallets.

It’s unconscionable that the Liberals swept the report’s ideas under the carpet for two years when ICBC’s financial woes are clear to everyone, and solutions are needed.

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