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wishes for a wonderful holiday season and a happy new year.
All of us at
wish all of you
a safe and
is only a partial solution. The best
outcome would be a change in client
behaviour over time.
According to MacPhail, a dysfunctional number of clients call a lawyer before
they even file a claim with ICBC.
A substantial number of clients automatically go to legal remedies, she says.
“We need to do everything we can to
make sure we can deliver more quickly to
people who have been in a car crash. We
need to talk about how we can work with
them to settle without having to go to a lawyer,” she
Further along the spectrum, a comprehensive-care model shifts the focus completely from cash
awards to care and treatment for injured claimants.
Richer accident benefits are
available allowing both at-fault and not-at-fault drivers to obtain care, providing them the best
opportunity to return to their pre-acci-dent condition. Benefits are available immediately after the accident, as required,
enabling faster return to function.
Yet, ultimately removing a victim’s
right to sue for damages, especially in
serious injury cases, is not something
MacPhail would like to see. “People
involved in catastrophic claims should
always be able to sue,” she says.
The EY report presents specific measures across the spectrum from simply
capping pain and suffering for minor
injuries to fundamentally changing the
system to a comprehensive-care model.
A cap on minor-injury pain-and-suf-
fering payouts of $7,000 to $9,000 com-
bined with maximum medical payments
of $300,000 and a $600-per-week wage
benefit, would reduce the basic rate gap
by $758 million. Premium revenue would
still need to rise to make up revenue
shortfalls, but not by the double-digit
amounts that would be required were no
To keep premiums in line with inflation, minor injury pain and suffering
payouts would be capped at $5,000 to
$7,000. Weekly wage
benefits would be a maximum of $900 and medical
payments would max out
at $450,000. There would
also be more stringent
rules for litigated claims,
and the introduction of an
dispute resolution system.
A third scenario
– freezing premium
increases for five years – would see
minor-injury pain-and-suffering payouts
capped at $4,000 to $6,000, a weekly
wage benefit maximum of $1,200, and
maximum medical and rehab costs, pay-
able only as accident benefits and not as
lump sum cash payouts, at $600,000.
To achieve a reduction in basic premium, the corporation would have to
change the system from the current adversarial nature to a comprehensive-care
model. The result would be a significant
enrichment of accident benefits to both
not-at-fault and at-fault drivers without
going through litigation.
There would be no benefits for pain
and suffering, and the right to sue would
be available only in cases of criminal
While there’s little doubt that enhanced road safety and product reform
must be undertaken to materially impact claims costs and assist with achieving financial sustainability without
requiring significant premium increases,
these changes are not quick fixes.
Financial benefits would not be realized
until implementation is complete in 18
to 24 months. The EY report sets out
other interim measures that will have an
incremental impact to the future performance of insurance and lay a platform to
enable successful reform.
Changes the corporation has made in
technology, administrative systems and
internal financing have already produced more than $100 million in savings,
but the growing rate gap has chewed
through that. There are, however, a
number of outstanding initiatives still
to be implemented that could deliver in
excess of $150 million in savings within a
Basic rate design has not changed
since 2007, and no longer reflects risk
and cost. Higher-risk drivers will likely
face higher penalties going forward.
With fairness as the underlying principle, higher premiums paid by high-
The number of
– those with a
over $150,000 –
has leapt 70% in
only four years.