The BC Government has announced that they have selected PwC Canada to lead an operational review of ICBC. The purpose of the review is to identify waste, find ways to prevent fraud and overbilling, and identify opportunities for business reform at ICBC.
The news has been full lately with stories about the dire financial situation at ICBC and the rate hikes that will be necessary to continue to fund the system as it currently exists. It is good news to see the government analyzing ICBC’s situation with an eye to finding ways to make it more profitable while maintaining the rights of individuals that the system currently provides.
Our current system is one in which an individual injured in a car accident due to the fault of another motorist is entitled to compensation to put them back in the position they would have been in if they had not been injured. It is a system that is fair and makes sense. If someone suffers losses due to another’s negligence, those losses should be covered. The person who was not at fault and was the victim of someone else’s negligence should not suffer as a result of that negligence. That is the guiding principle of our current system. This ensures not only that someone is not made worse off due to another’s negligence as far as money can prevent, but it also can help to serve as a motivator for motorists to be more careful drivers. Attributing losses to negligence drives home the damage that has been caused through actions. Although ultimately an insurance company (ICBC) pays those losses, the losses are quantified, the not at fault injured person is made whole and the negligent driving is discouraged through increases to the at fault motorists insurance rates.
Ernst & Young conducted a review of ICBC and brought forward a variety of recommendations which essentially boiled down to product change. That product change would restrict the injured not at fault party’s compensation for their injuries. That product change would mean that the injured party would suffer a loss even though the accident was not their fault.
The Attorney General’s office indicates that this is the first review of ICBC that they are aware of that directs the reviewers to talk to front-line employees about where they see waste, fraud, overbilling or other opportunities for reform. This is a great step forward where the focus will be on what ICBC can do better, rather than focusing on taking away benefits to those paying for the insurance. Rather than giving less for insurance dollars by restricting compensation, give more by making ICBC more responsive to the needs of the insured and eliminating waste, overbilling and poor cost controls. I am optimistic that ICBC board chair Joy MacPhail will be able to achieve what she is setting out to, specifically:
The resulting solutions we want to see must be focused on striking the balance between relieving the cost pressures on ICBC while ensuring improved services and affordable rates for all British Columbians.
You can read the full news release from the Attorney General here.