Long-awaited changes to the Insurance Corporation of B.C. (ICBC) are on the way. Attorney General David Eby said new rules will ensure that the public insurer starts to make money again.
Eby introduced legislation to impose limits on soft-tissue injury payout from vehicle accident claims that could save enough to cover soaring costs that led to the public insurer losing $1.3 billion in the last fiscal year.
“We hope and are advised that this legislation might get ICBC back in the black which means that the savings are in the neighbourhood of $1 billion,” Eby said. “This is not the extent or the end of the work we are doing at ICBC.”
The new legislation introduced on Monday does not address rates.
But the cap on soft-tissue injuries and a shift towards shifting ICBC claims from B.C. Supreme Court to the Civil Resolution Tribunal should save ICBC around $1.3 billion. The legislation moves ICBC claim cases of under $50,000 to the tribunal, with a target of resolution in as few as 90 days.
“It was our advice that we received that $50,000 was the most that we could do without engaging in territory that could be unconstitutional,” said Eby. ”
Eby said the government is expecting complaints from lawyers as legal fees make up about one-third of the cost of soft-tissue claims. The province has set the cap on soft-tissue injury payoffs at $5,500 for pain and suffering that will come into effect on April 1, 2019. Currently, the average cost for a minor injury claim is $30,000.
There are other provinces that have caps, with Alberta at the low end at $5,020 and Nova Scotia at the high end of caps in Canada at $8,486. An estimated one-third of the current cost is for lawyers and expert reports even if the claim never ends up in a courtroom.
“There is no question this is a shift. It is a dramatic shift. It is a shift from legal costs and expert reports,” sad Eby. “We recognize there will be unhappiness on the behalf of many lawyers.
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“The projections for the savings from this are as accurate as they can be.”
It is not just minor injury costs that led to a growing deficit at the public insurer. ICBC has seen a drastic increase in the number of claims and a 30 per cent increase in body shop costs.
Amid the cap on soft-injury claims, the province is increasing benefits for lost pay and medical rehabilitation for all people injured in accidents. The changes will increase the care available for anyone injured in a crash, regardless of fault.