The committee met at 9:02 a.m.

[Stephanie Higginson in the chair.]

Stephanie Higginson (Chair): Good morning, everyone. I’m Stephanie Higginson. I’m the MLA for Ladysmith-Oceanside, and I am the Chair of the Special Committee to Review Provisions of the Insurance (Vehicle) Act.

I would like to begin by acknowledging that we are meeting today on the legislative precinct in Victoria, which is located on the territory of the lək̓ʷəŋən-speaking People known as the Songhees and Esquimalt Nations. I’m grateful to them for their stewardship of this land since time immemorial.

This committee is reviewing parts 10 and 11 of the Insurance (Vehicle) Act, and the committee is also the committee to which Bill M237, the Insurance (Vehicle) Amendment Act, 2026, has been committed.

Today we are going to be receiving briefings from the Ministry of Attorney General and ICBC on parts 10 and 11 of the act.

With that, we’ll move into presentations from the Ministry of Attorney General. I will welcome our first guests. From the Ministry of Attorney General we have — hopefully these names are all still relevant.

Interjection.

Stephanie Higginson (Chair): We have the names. Right. Paul Craven, assistant deputy minister of justice services branch; Nina Bindra, legal counsel, legal services branch; Devon Windsor, director, justice services branch; and Tom Fesnoux, senior policy and legislative analyst, justice services branch.

We will turn it over to you.

Briefing on Parts 10 and 11
of the Insurance Vehicle Act

Ministry of Attorney General

Paul Craven: Thank you, Chair. You’ve introduced us, so I won’t reintroduce ourselves.

Just to reiterate, we are from the Ministry of Attorney General in the justice services branch and responsible for the act. The responsibility of the act has varied with different ministries over time but currently sits in the Ministry of Attorney General and in the justice services branch.

The purpose of our presentation today — and we provided a deck which we’ll walk through — is to provide an overview of the enhanced-care legislative framework for you, starting with some history, an explanation of how the vehicle insurance system has evolved to where it is today.

Moving over to slide two, if you’re following along, we’ll talk a little bit about government and vehicle insurance generally. In reviewing the vehicle insurance system, it is useful to note, generally, why it’s so important.

[9:05 a.m.]

There are two real main reasons. First, as acknowledged way back in the 1970 throne speech, there is an inseparable problem of highway safety and automobile insurance coverage. Auto insurance is a system designed to address these major public policy safety issues, particularly the risks posed by motor vehicles and the impacts those

acknowledge it’s way back in the 1970 throne speech, there is an inseparable problem of highway safety and automobile insurance coverage. And auto insurance is a system designed to address these major public policy safety issues, particularly the risks posed by motor vehicles and the impacts those risks have on people and on social programs when accidents occur.

Second, these issues impact almost every single British Columbian in one way or another. Some numbers are useful to explain the magnitude of this challenge, and that’s outlined in slide 3. Starting with impacts on injured people, vehicle accidents are one of the leading causes of unintentional injury and death across all ages in British Columbia and rank the third-highest injury costs. Out of approximately 800 reported crashes that happen every day in British Columbia, about 135 of them result in injury or fatality. Per year, that translates into about 68,000 people injured and around 300 fatalities. These crashes obviously have tragic life-altering consequences to the victims and their families.

There are also impacts on the economy. The economic impact of these crashes is also substantial. The cost of crashes includes factors beyond simply insurance claim costs, for example, the cost to the health care system and losses to society productivity. According to the most recent available statistics from the B.C. injury research and prevention unit, the broader economic cost for crash injuries is about $575 million a year.

There are also impacts on the justice system. Litigation relating to crashes also puts a strain on our justice system. Before the introduction of enhanced care, vehicle claims made approximately one-third of all new civil filings in the British Columbia Supreme Court every year. As of the second quarter of fiscal year ’25-26, there were approximately 15,000 claims related to accidents, before enhanced care, still working their way through the court system. This represents a total of about $4 billion in claims that are still open that occurred under the previous model.

Contrasting that, in 2024 there were 516 new court filings related to motor vehicles, which was 1 percent compared to the 33 percent of total new B.C. Supreme Court filings.

Impacts on ICBC. The costs of that litigation are significant. For example, in 2017 it was estimated that legal costs accounted for 24 percent or $845 million of ICBC’s total annual costs, which is greater than the cost to run the corporation and greater than the accident benefits received by injured complainants combined.

There are also impacts on ratepayers. Those costs, of course, impact the level of accident benefits that can be paid to injured people and the affordability of insurance premiums. And those impacts are broad. About 90 percent of households in British Columbia own at least one vehicle.

Now turn to slide 4. Vehicle insurance is unique in that we’re all at risk at both being injured and of injuring another. Driving is a dangerous activity often requiring split-second judgment calls, so even normally careful drivers can sometimes make mistakes causing accidents. And while the tort system has some advantage for some people, it also has a number of failings in the auto accident context. So in talking about tort versus no-fault, as a result of the fault standard in a tort system, many victims are not compensated at all. About 40 percent of people injured in crashes have no one to sue, either because they were at fault or no one is — for example, hitting wildlife like a moose or a patch of black ice.

[9:10 a.m.]

There is also a long delay in providing compensation for those injured people who do have someone to sue, going through the court process as previously indicated. The seriously injured are often under

like a moose or a patch of black ice. There is also a long delay in providing compensation for those injured people who do have someone to sue, going through the court process as previously indicated.

The seriously injured are often undercompensated, while victims with minor injuries are often overcompensated for a variety of reasons, including these.

For certain types of damages, such as the cost of future care, the court must speculate about what’s likely to happen in the future. Of course, that is not an exact science. The most a claim will usually settle for is the amount of insurance the defendant purchased. A significant majority of insureds have $2 million or less in insurance.

Finally, a large part of the damage award will be paid to the injured person’s lawyer in an at-fault system, including up to 33 1/3 percent in contingency fee cases. The processes of establishing fault and assessing damages creates high administration costs as well.

We want to contrast that with care-based systems, which generally involve two central principles. First, people are entitled to compensation without regard to fault. Second, compensation is paid in exchange for giving up the right to sue others for being at fault for the accident. In other words, no actions or proceedings may be commenced or maintained respecting bodily injury to which the compensation plan applies.

For these reasons, these care-based systems are sometimes called no-fault. But as we’ll explain later, that is not an entirely accurate description because fault still does matter in the enhanced-care model. I will speak a little bit more about that later in our presentation, but there is an ability to sue some at-fault parties for certain damages, and ICBC must cancel or refuse to pay benefits to insurers who wilfully caused an accident.

To summarize, enhanced care is a system that remedies the failings of the tort system by providing immediate access to a broad range of benefits without regard for who was at fault and avoids the costly, uncertain and time-consuming court proceedings associated with proving who caused the accident or establishing how much compensation a person is entitled to as a result. The result is that the costs generated through a litigation-based system are largely removed and put towards better benefits and lower rates for ratepayers, the insured.

I’m now going to move to slide 5, which will briefly go over sort of the history of how we got here and how our insurance system has evolved to become an enhanced-care model.

Starting in the 1960s, vehicles and vehicle insurance have long existed in British Columbia and discussions about the safety and compensation issues resulting from accidents began very early on not only in British Columbia but around the globe. By the 1960s, the Legislature was confronted with a dramatic increase in the number of vehicles on highways and a corresponding rise in accidents, claims and insurance premiums.

High public dissatisfaction at that time with B.C.’s system led the government to establish a royal commission chaired by Justice Robert Wootton of the B.C. Supreme Court. The final report by the royal commission in July 1968 identified a number of defects in the system and made recommendations, including the elimination of the tort system for claims arising out of vehicle accidents, mandatory no-fault insurance benefits and the establishment of a procedure by which government auto insurance could be introduced.

[9:15 a.m.]

At that time, the Legislature decided to leave the tort system intact but made other reforms, including legislative amendments to require vehicle insurance contracts to incorporate some no-fault accident benefits, up to the limits specified in a statutory table of benefits. This was the precursor to what is now referred to as part 7 benefits because they were found in part 7 of the insurance vehicle regulation.

A few years later in 1973, ICBC was created to deal with the insurance needs of all motorists in British Columbia.

referred to as part 7 benefits because they were found in part 7 of the Insurance (Vehicle) Regulation.

A few years later in 1973, ICBC was created to deal with the insurance needs of all motorists in British Columbia.

We then skip forward to the 1990s. ICBC’s finances at this point fluctuated over the following two decades, but in 1992, after a loss of $180 million was forecasted due to increasing claims and claim costs, as well as lower income due to lower interest rates, government embarked on a no-fault campaign, which, after a while, they were forced to abandon as a result of opposition.

In the 2000s, the debate began again after laying largely dormant over the following years. However, ICBC’s finance began to deteriorate again in the 2000s. Subsequently, in 2016, government directed ICBC to initiate a comprehensive external review. The purpose: to provide options for government’s consideration that would make basic insurance fairer and more affordable and keep future rate increases in line with the rate of inflation.

This resulted in the 2017 Ernst & Young report called Affordable and Effective Auto Insurance - A New Road Forward for British Columbia. It found, among other things, one, the number of claims being filed was going up faster than the number of accidents.

Two, the increase in the number of claims being filed was primarily driven by minor injury claims.

Three, the average paid out for minor injury claims was increasing more rapidly than for non-minor injury claims. That trend was mainly driven by pain and suffering payments, which were 330 percent higher for minor injuries versus 58 percent for non-minor injuries over the same period.

They also found that B.C.’s auto insurance was inefficient. Comparing it to best-in-class insurance systems around the world, which returned approximately 80 percent of premium dollars back to policyholders, the situation in B.C.’s system was returning only 58 percent. And they found that no-fault benefits, part 7, I just talked about earlier, had not been increased since 1991.

Important to note that by this time, a number of other jurisdictions had experienced similar problems as British Columbia and had already moved to a no-fault system, starting with New Zealand in 1974. In Canada, Quebec was first in 1978, with Manitoba and Saskatchewan following in the 1990s. All other Canadian jurisdictions had implemented some form of limit on pain-and-suffering payments for minor injuries at that time.

The report analyzed those other systems and presented a variety of opportunities to address British Columbia’s problems, including road safety improvements to reduce the number of accidents, as well as a redesign of the insurance product. Options for product reform were presented along a continuum of varying limits on the amount of pain and suffering that could be claimed in tort for minor injuries right up and including a pure no-fault system.

That brings us to 2017. In 2017, before the recommendations in that report could be implemented, ICBC was projecting a loss of $1.3 billion by the end of the fiscal year. Those losses would translate into premium hikes of almost 40 percent if the government did not take any action. As a result, government promised major reforms.

In 2018, the rate affordability action plan project was launched, RAAP for short, and tort reform.

[9:20 a.m.]

In 2018, informed by the recommendations of the report mentioned, government introduced these reforms, which included a new limit of $5,500 on pain and suffering from minor injuries, an independent dispute resolution process for certain accident-related disputes through British Columbia’s Civil Resolution Tribunal, and the savings from those changes were directed to fund first major improvements in part 7, no-fault accident benefits in over 20 years.

dispute resolution process for certain accident-related disputes through British Columbia’s Civil Resolution Tribunal, and the savings from those changes were directed to fund first major improvements in part 7, no-fault accident benefits, in over 20 years.

While those changes were also projected to save the system $1 billion annually, they would only apply to accidents on or after April 1, 2019, so they were longer-term as opposed to short-term solutions. In the meantime, ICBC’s financial position continued to deteriorate at unexpected levels, and government realized that some shorter-term measures were also necessary to deal with the open book of claims.

One of those examples is that government found that a key driver in higher injury claim costs was a trend towards the use of multiple, often disproportionate and duplicative, experts and reports on the issues of damages. In order to better address those concerns, government created limits on the number of adversarial experts and reports, with no limits on the number of joint or court-appointed experts, as well as judicial discretion to allow additional adversarial experts.

Then we move to 2021 and enhanced care. While all those reforms were significant changes and undertakings, they weren’t enough to solve all the problems. By late 2018, it started to be clear that while the RAAP action plan product reforms were on track to save about $1 billion annually, the reforms would not halt a projected cumulative 43 percent rate increase over the next five years.

It had also become clear how poorly the litigation-based system took care of injured people. A bit of an example here. The minister responsible for ICBC at the time met a woman who had hit a moose with her vehicle and ended up a quadriplegic. She had struggled to survive under the old maximum of $150,000 for medical and recovery costs from her no-fault part 7 benefits. The minister learned that the new level of $300,000 set in 2018 was also totally inadequate for her.

In addition, legal challenges to the ICBC-related reforms by the Trial Lawyers of B.C. were shaping up to be protracted battles, including a constitutional challenge to the reforms. Those challenges ultimately did not succeed but were nascent during this time.

Government also had the benefit of witnessing the success of other cared systems in Canada and around the world, more particularly in our neighbours Manitoba and Saskatchewan. Both provinces had much richer benefits than B.C. overall. Manitoba had just applied a 1 percent rate decrease, and Saskatchewan hadn’t had a rate increase in five years.

That’s a bit of the history that leads us up to enhanced care. Now moving on to slide 6, where I’ll talk a little bit in more detail about enhanced-care coverage, the coverage scheme on accidents that are occurring on or after May 1, 2021, with the introduction of enhanced care.

On slide 6, in 2021, over 50 years after the recommendation of the Wootton commission, B.C. joined those other provinces, and B.C.’s enhanced-care scheme came into effect. The new model consists of two main parts. A new part 10 of the Insurance (Vehicle) Act includes a lawsuit ban respecting bodily injury caused by a vehicle and introduced associated enhanced no-fault accident benefits. Two, a new part 11, which includes lawsuit bans respecting damage to a vehicle, introduced basic vehicle damage coverage.

Moving on to slide 7, enhanced-care accident benefits and limits on actions and proceedings.

[9:25 a.m.]

Part 10 applies to accidents occurring on or after May 1, 2021. The ban on lawsuits prohibits actions and proceedings respecting bodily injury caused by a vehicle arising out of an accident. In other jurisdictions with similar bans, the courts have ruled this to be interpreted very broadly

Part 10 applies to accidents occurring on or after May 1, 2021. The ban on lawsuit prohibits actions and proceedings respecting bodily injury caused by a vehicle arising out of an accident. In other jurisdictions with similar bans, the courts have ruled this to be interpreted very broadly.

For example, in Quebec system, the Supreme Court of Canada said this: “The act expresses a well-thought-out societal compromise between various contradictory forces. Such legislation establishes a compensation system that is based on the principles of insurance and no-fault collective liability, the main purpose of which is compensation and thus a form of final liquidation of remedies.” B.C.’s version is intended to be interpreted broadly as well.

Entitlement to benefits. Instead of lawsuits, British Columbians who sustain bodily injury caused by vehicle are entitled to enhanced accident benefits without regard to fault. Enhanced benefits and the lawsuit ban are two sides of the same coin. Generally speaking, people are entitled to enhanced accident benefits in exchange for the right to sue in tort.

While the new part 10 applies to the vast majority of accidents, it does not apply to some. For example, it does not apply to accidents involving only certain vehicles off highways such as industrial equipment like cranes, backhoes, graters and such; accidents involving only certain vehicles which are not considered to be standard auto risks, such as an amphibious vehicle while it’s being launched into the water; and certain bodily injuries such as a bite from an animal while it’s being transported, to give some examples.

There are also some limited exceptions to the lawsuit ban. Even where part 10 applies and the injured person receives enhanced benefits, they can sue certain people; for example, vehicle manufacturers, liquor licensees who overserve their patrons and motorists convicted of certain serious criminal offences as a result of the accident. Those people can only be sued for non-pecuniary damages and punitive, exemplary, other similar non-compensatory damages. Unlike in the old system, they are personally liable for the pain and suffering damages. They are not paid by ICBC ratepayers.

The overall goal, to administer a system without regard for fault leading to better care and more affordable premiums, had to be balanced with other objectives, such as the need to deter certain blameworthy conduct and give the public peace of mind that egregious wrongdoers are still to be held accountable for their behaviour. These exceptions attempt to achieve that balance.

It has been argued by some that these exceptions need to be expanded, but that issue was examined extensively, and the conclusion was that it’s necessary to keep those exceptions as narrow as possible in order to maximize the benefits of the new scheme. The longer the list of exceptions, it will largely defeat the overall scheme of enhanced care.

It brings me to slide 8, entitlement to enhance accident benefits. The benefit entitlement provisions are found in part 10, but it is a broad framework with many of the details set out in three regulations. Prior to the development of these regulations, there were extensive consultations in particular with health care practitioner organizations and disability advocate organizations in order to determine the types of benefits and the amount of compensation that was right for people in British Columbia. Each decision is an attempt to strike the best balance for care for injured persons and the affordability of insurance premiums.

It’s important to note the most enhanced accident benefits are indexed. This means the amounts set out in regulations are the amounts that were payable as of May 1, 2021 and not the amounts that are currently payable. They are increased. They were just indexed on April 1, and the next indexation will be April 1, 2027, so those benefits are continually increasing to keep up with inflation.

[9:30 a.m.]

Also, every five years, the minister is required to conduct a review of the amounts payable as benefits for the provision of health care services by a health care provider and to provide the resulting report to the Legislative Assembly in order to ensure government is held accountable to maintain appropriate benefit levels. These health care services include, among other services, acupuncture, massage therapy and physical therapy. The most recent review was completed in spring 2025 with relevant benefit amounts updated on May 1

in order to ensure government is held accountable to maintain appropriate benefit levels. These health care services include, among other services, acupuncture, massage therapy and physical therapy. The most recent review was completed in spring 2025 with relevant benefit amounts updated on May 1, 2025.

Moving to slide 9, just to go over the legal framework for enhanced care. There are regulations under part 10. They are the enhanced accidents benefits regulation, the income replacement and retirement benefits, and benefits for students and minors regulation and the permanent impairment regulation. I’ll describe these regulations in turn. And I understand that ICBC will, in their presentation, explain more about how the laws work in practice in their presentation later today.

So slide 10, a little bit about the enhanced accident benefits regulation. This slide gives you a high-level overview, comparing the former part 7 benefits that we’ve talked about under the insurance vehicle regulation and enhanced care, summarizing much of what I’ve presented so far. Again, these are indexed, and the updated amounts are on this slide. The annual index for part 7 benefits only applies to the fees for health care services and specific overtime hourly rates that are prescribed in the regulation.

All prescribed amounts under part 10 were subject to review that was completed last year, but it was ultimately determined that these particular benefits did not warrant an increase.

The enhanced-care benefits regulation sets out details for most of the benefits, including health care and recovery benefits. These have no overall limit and include services and items such as physiotherapy, counselling, massage therapy, medical equipment, medications and alterations to or acquisitions of motor vehicles and homes — also covering benefits when the insured requires assistance in performing activities of daily living, such as preparing personal meals, managing personal finances. care expenses, recreation benefits and travel expenses for an individual to attend to an insured in critical condition also covered in this regulation.

Moving on to slide 11. This is our summary of the enhanced accident benefits regulation. This deals with death and related benefits in the event of a fatality, such as funeral expenses, grief counselling and are outlined in this regulation. Other benefits contained include counselling for family members of an injury insured, a family enterprise benefit and a caregiver benefit.

Ultimately, enhanced care is able to provide better benefits at lower rates than the previous system because the cost and expense generated through the litigation-based system have been removed. Enhanced care provides the benefits immediately, right away, for as long as they are needed, even for a lifetime.

Moving to slide 12, talking about the income replacement and retirement benefits and benefits for students and minor regulation. This regulation provides for income replacement benefits for income lost because of a bodily injury.

There is a new formula for calculating the income replacement benefit, which allows for income replacement up to 90 percent of net income based on a maximum gross income of $122,500. This is the indexed amount as of April 1, 2026. This is usually higher than the former model, which had a 75 percent income replacement level, up to $740 per week.

ICBC will calculate the income replacement benefit using both of those formulas, and the insured will get whichever amount is higher. At a certain point in time in an insured’s life, this benefit will be conferred to a retirement income benefit, and the insured remains entitled to that for the rest of their lives.

There is also a new loss of studies benefit for students and minors, which establishes lump sum payments based on the level of education per missed school year or semester.

Moving to slide 13, which talks about permanent impairment regulation. An insured is entitled to a lump sum payment if they have permanent impairment as a result of an accident.

[9:35 a.m.]

This compensation is in addition to other benefits and is intended to compensate for significant damage, loss or loss of use of a body part or a bodily function. It is not intended to compensate for disability or for pain and suffering. The types of impairments we’re talking about here include loss of limbs, vision or hearing, loss of range of motion, nerve damage, spinal injury — to name a few

or loss of use of a body part or a bodily function, It is not intended to compensate for disability or for pain and suffering. The types of impairments we’re talking about here include loss of limbs, vision or hearing; loss of range of motion; nerve damage; spinal injury — to name a few.

The Permanent Impairment Regulation also sets the details of permanent impairment compensation. The amount an insured receives is based on the degree of permanent impairment sustained, which is calculated using a detailed formula in the regulation.

Slide 14. I’m going to talk about catastrophic injuries. An insured who sustains a catastrophic injury is entitled to many higher-benefit amounts — i.e., a maximum permanent impairment compensation lump sum of $313,918 — and may be eligible for an extended benefit in special circumstances. This extended benefit may be used for things like travel and accommodation expenses for the insured, and a companion or assistant, if needed, to allow the insured to travel as they did before the accident.

That’s a brief summary of the three relevant regulations that set out the compensation levels. I’m now going to turn to what I prefaced earlier in my remarks, about why not to call it no-fault insurance. We do refer to the model as “enhanced care.”

The reason we prefer that term is that fault does still matter. In addition to the ability to sue some at-fault parties for certain damages, drivers who cause accidents continue to pay higher premiums. So there is a consequence. ICBC must also cancel or refuse to pay benefits to insureds who wilfully cause an accident and must reduce certain benefits, for those who would otherwise be payable, to criminal motorists.

ICBC may recover money paid as benefits from the same people, who can still be sued, and other legal, ethical and professional duties continue to apply. For example, government still has legal duties to act in the public interest and can still sue its maintenance contractors for breach of contract, and motorists may still be prohibited or suspended from driving.

I’m going to turn now, in slide 16, to talk a little bit about ensuring fairness and accountability in the system. There are a number of checks and balances to ensure fairness. For example, as a result of the reforms, there is a new statutory duty on ICBC. It is now required by law to assist each customer with a claim and endeavour to ensure that they are informed of and receive all the benefits to which they are entitled.

I mentioned the Civil Resolution Tribunal. It is independent from ICBC and has exclusive jurisdiction to make a determination of entitlement to benefits, in the event of a dispute. The CRT has a mandate to provide dispute resolution services in a manner that is accessible, speedy and economical, informal and flexible, with a focus on electronic communication and cooperative dispute resolution.

It’s important to point out here that despite the high volume of benefit claims since bringing in enhanced care on May 1, 2021, the dispute rate is very low. At the end of fiscal year ’25-26, the total number of disputes received since enhanced care started was 735, or 0.2 percent of the customers who have filed for enhanced care benefits.

Since the start of enhanced care to the end of fiscal year ’25-26, the CRT has rendered 200 decisions. Of these, the CRT upheld ICBC’s decisions 51 percent of the time, returned a mixed result — where the CRT agreed with some of ICBC’s position but not all of it — in 36.5 percent of disputes, and overturned ICBC’s decision in 4.5 percent of disputes, while 8 percent of disputes were dismissed for non-compliance.

[9:40 a.m.]

Of course, if the insurer does not agree with the CRT’s decision, they may commence judicial review at the B.C. Supreme Court. This, however, is very rare. So far, only seven claimants have commenced a judicial review to date. Of those, there has only been one decision, two have expired, and four are ongoing.

There is also the establishment of the fairness officer, and a complaint can be made to the fairness officer, who’s appointed by government and has the authority to review issues.

of those, there has only been one decision, two have expired and four are ongoing.

There is also the establishment of the fairness officer, and a complaint can be made to the fairness officer, who is appointed by government and has the authority to review issues about ICBC’s policies, processes and make recommendations.

The fairness officer has seen an increase in the number of non-jurisdictional complaints, particularly complaints focused on the amount payable by ICBC and which should be directed to the CRT. In ’24-25, the fairness officer received 111 complaints, 61 — or 55 percent — of which were related to claims services. Unfortunately, it’s unknown how many of these are for claims made before or after enhanced care, based on the tracking that we have.

The claims related to complaints are a small percentage, again, of the 1.1 million claims that were opened with ICBC the year before, in ’23-24. Of the 111 complaints, 26 were closed for being outside the fairness officer’s jurisdiction.

Finally, a complaint can also be made to the Ombudsperson. In ’24-25, the Office of the Ombudsperson received 476 inquiries and complaints related to ICBC, and more than half of these were related to motor vehicle accidents, because the Ombudsperson’s jurisdiction is abroad to ICBC and all its functions.

We’re now at slide 17, and I want to talk a little bit about part 11, the basic vehicle damage coverage provisions. Part 11 is very technical and not as much of general interest as part 10, so I’ll try and be brief here. How it works is that insurers now receive compensation for damage to their vehicle to the degree they are not at fault for the accident from their own basic insurance instead of from the third-party liability insurance of the person who is responsible for the damage.

This removes the requirement for people to sue one another for compensation for damage to vehicles, which are the most common property losses paid by vehicle third-party liability coverage. The removal of costs inherent in the tort system and the efficiencies of handling claims on a first-party basis help keep insurance rates affordable and stable.

Slide 18. BVDC, basic vehicle damage coverage, covers the vehicle up to $200,000. This amount will provide full coverage in relation to the vast majority of vehicles. However, optional insurance may be purchased to cover and address higher-value vehicles. Some BVDC disputes may be resolved by arbitration, and others may be resolved by bringing a claim to CRT or a court.

Slide 19. We’re just going to summarize some of the first five years of enhanced care. Since the date of May 1, 2021, ICBC has paid out over $1.9 billion in enhanced-care benefits to around 246,000 injured British Columbians. Now over 96 percent of ICBC’s benefit claims payments go to injured people.

With the shift to enhanced care, ICBC also reduced its basic rates by 15 percent, and it has maintained a positive net income. Spring 2027 will mark seven consecutive years with no overall increases to basic insurance rates.

There has been some litigation involving the scheme, including Schober and the Trial Lawyers Association of B.C. That’s a constitutional challenge to part 10 of the act generally. However, that challenge has been largely dormant since being filed, and we continue to await a leading case in British Columbia.

Continued monitoring and improvements. Government has been monitoring how the scheme is working and, with input from stakeholders and ICBC, has refined the laws as needed. Amendments have included changes in 2020 for technical and substantial amendments to regulations to ensure the legislative framework for enhanced care works as intended.

[9:45 a.m.]

Some of those amendments. In 2023, a B.C. reg was passed that amended the enhanced-care benefits regulation to ensure increased efficiency and reduced need for coordination of service and benefits between ICBC and public health for the activities of daily living benefit. In 2025,

amendments…. In 2023, B.C. reg was passed that amended the enhanced care benefits regulation to ensure increased efficiency and reduced need for coordination of service and benefits between ICBC and public health for the activities of daily living benefit. In 2025, the enhanced action benefits regulation was amended to add a benefit for counselling for family members of an insured who has been seriously injured. Government will continue to monitor and make adjustments to the scheme to enhance its benefit for British Columbians.

That leads me to my final slide, which is thanking you for your time and attention to our presentation. We realize that’s a lot to absorb in a short period of time. I tried to talk as slowly as I could, but as you can appreciate, a little momentum gets going.

We’d be pleased to return to the committee and provide further follow-up information after your deliberations if that is something the committee is interested in. And of course, we look forward to the report, but we’re pleased now to try and respond to questions.

Stephanie Higginson (Chair): Okay. Thank you for that comprehensive overview. I’ll definitely be rereading Hansard on this one. I have a lot of: “Read this.” There were a lot of statistics. But I appreciate the in-depth overview.

We’re going to go to questions.

George Chow: Hi, Paul. Thank you for the presentation. So the last question first. You mentioned the constitutional challenge by the lawyers as dormant. What does that mean legally, and are they representing the entire country or just certain provinces? That’s the first question.

The other question is regarding benefit studies. I don’t quite understand. Is that compensation paid to the students, or what are those? I think it was on Sly. I wrote it down. But anyway, you probably know what I mean on that. Yeah, thank you.

Paul Craven: Okay, so just to deal with the first question, “dormant” simply means it’s not being advanced by the plaintiff at this time. It’s the responsibility of the plaintiff to advance the litigation, so it’s not being advanced at this time. It is in British Columbia, not the country.

Do we want to just talk about the benefits?

If we’ve got your question right, the loss-of-study benefit…. If a student, as a result of an accident, has lost study time, so they’re not able to go to school or university, there is a lump sum benefit paid to students for compensation for that lost time of study.

Steve Kooner: Question for Mr. Craven. How much profit is ICBC making at the current time?

Paul Craven: ICBC is here this afternoon. I will probably defer that question to them. They will be able to give you more accurate information on that.

Steve Kooner: Okay. Another question. In regards to insurance rates…. Prior to 2021, what was the average insurance rate, and what is the average insurance rate now?

[9:50 a.m.]

Paul Craven: One of the factors…. Well, there are many factors that determine what your insurance rate is, regardless of the regime that’s there, right? So your driving history, your age, those types of factors — all of those. Again, I’m sure ICBC can talk in more detail about those. And generally what those

that determine what your insurance rate is, so regardless of the regime that’s there, right? So your driving history, your age, those types of factors, all of those. Again, I’m sure ICBC can talk in more detail about those and, generally, what those are in the context of auto insurance.

Because of all of those factors, I think it’s difficult for us to answer your question about what average rates were at that time versus that, because they vary based on the individual and a number of other factors. In any way, I don’t have a figure that I can provide for you today. ICBC may be able to provide more of a detailed answer.

Steve Kooner: You mentioned earlier that….

Stephanie Higginson (Chair): MLA Kooner, we have got other people with questions, so I will put you down the list unless this is a direct follow-up to the previous question.

Steve Kooner: Yes.

Stephanie Higginson (Chair): It’s a direct follow-up to the previous question? Related to the legal framework? Because ICBC is coming this afternoon. This is the legal framework.

Steve Kooner: Mr. Craven did try to answer it. He did have a stat within his presentation.

Stephanie Higginson (Chair): If it’s a direct follow-up question, go ahead.

Steve Kooner: Mr. Craven, in your presentation you mentioned something about 15 percent. There was a drop-off in terms of insurance. Just following up to your answer there, just a minute ago, you said that you don’t have an exact example. How does that 15 percent work into your answer? Is that what the reduction was, 15 percent?

Paul Craven: Yeah, I think we’re talking maybe about two different things in terms of, what I understand, your question about average reduction in premiums. At the time of introduction of the system, there was a 15 percent reduction across the board. Then that’s followed by no standard increases in the premium level for the last seven years.

Again, ICBC can go into some of the details about how that impacts on an operational basis and what that looks like.

Brennan Day (Deputy Chair): Thank you for the presentation, a lot to take in there. My apologies for not being there in person, but you don’t want whatever I’ve got.

One follow up, and it was right off the top. You noted that legal costs to ICBC were 24 percent of their budget in 2017. Do you know what they are today in terms of percentage of total?

Paul Craven: I’m afraid I’m going to be a bit of a broken record on some of these things. That’s a good question for ICBC. They’ll be able to provide for you on that.

Fair warning to them, because I think they’re listening, so hopefully they’ll be able to provide those responses.

Brennan Day (Deputy Chair): Okay. I guess I have another follow-up question if I could. It’s related to this, and you may need to punt this one too.

The way the settlements happened before, my understanding is most of them were lump sum settlements dealt with in court. And the ongoing…. There was sort of finality to the decision once it was rendered. What studies has the Attorney General’s office done on what I would consider to be a compounding growth problem for ICBC.

As you’ve mentioned with your statistics, it’s a large number of claims every year with ongoing injury requirements. Now that ICBC is effectively case managing all of these cases, what is the anticipated impact on the ICBC staffing and costs going forward? It does seem like there’s is a bit of a ticking time bomb here baked into this system, because ICBC never gets to get rid of these cases. They effectively become social workers long term for a lot of people.

I’m wondering what studies the Attorney General office has done in order to forecast those issues going forward.

[9:55 a.m.]

Paul Craven: Thank you for the question.

Paul Craven: Thank you for the question. I think you accurately identify one of the differences between the previous and the current system. The previous system, courts or through settlement, you are effectively settling what you think your future care and future costs are going to be, and they’re done. If those are underrepresentative, then that is borne on the person who is subject to the accident.

Under the enhanced-care model, yes, those are carried through for the lifetime of the individual, which carries benefit. That does have impact on how ICBC runs their business, and that largely relates to actuarial approaches to that, which…. I am not an actuary. But again, I encourage you to talk to ICBC. They’ll be able to provide a bit more about that in the context of the standard in insurance business.

We not aware of any specific study, but we also relied on experience in other jurisdictions. These systems have been in operation, as noted in our presentation, in Quebec, Saskatchewan and Manitoba for numerous years, with benefit and without an overarching challenge in terms of costs at the end.

Stephanie Higginson (Chair): I have a question.

So question regarding…. It was slide three, right off the bat. You were talking about civil filings pre-enhanced-care. It’s in the slide that it was 30 percent, but I missed the number that it is now under enhanced-care.

Paul Craven: It’s 1 percent.

Stephanie Higginson (Chair): So 1 percent. And then my follow-up question for that is: can you talk a little bit about the impact that has on the system, particularly around civil filings, with the drop in those numbers, if any?

Paul Craven: Yeah. There are still ongoing cases. We’re still working through those. Some may go to trial, some may be resolved. So until that is completely, those will continue to have an impact on the justice system, although that depends on a case-by-case basis.

As a result, obviously, there are less things that are going to Supreme Court, which should help with the caseload, broadly, for the B.C. Supreme Court, although that has to be balanced with other factors in all of the areas of the jurisdiction of the B.C. Supreme Court, whether that’s criminal, civil, family, and the complexity of those cases.

I guess we would say if those cases were still going through, I think you would find a considerable pressure on the court system, which is relieved as a result of that. The court system is sort of insatiable in terms of the number of claims and items that have come through and result in more timely consideration of those, but the volume continues to keep the courts very busy overall.

Jeremy Valeriote: Thank you for the thorough presentation. I also will have to go back to Hansard and review a couple of things, so apologies if you already addressed it.

Just a couple of specific questions on benefits. What are family enterprise benefits meant to cover?

[10:00 a.m.]

Paul Craven: The best example of that — thanks for the question — is if an individual is helping a family-owned business — say, a corner store, for example — and they’re doing that without wage, this sort of benefit allows compensation for that to the enterprise.

Jeremy Valeriote: Can I do one more?

Stephanie Higginson (Chair): Is it related?

Jeremy Valeriote: It’s related to benefits.

helping in a family-owned business — say, a corner store for example — and they’re doing that without wage, this sort of benefit allows compensation for that to the enterprise.

Jeremy Valeriote: Can I do one more?

Stephanie Higginson (Chair): Is it related?

Jeremy Valeriote: It’s related to benefits.

Just with regards to the private member’s bill that we’ve been sent, it’s my understanding that if a person loses one limb only, they fall under permanent impairment benefits but not catastrophic. I’m just trying to…. I see up to $198,805 for permanent impairment and up to $313,000. Sorry to be crass, but is that the difference between losing one limb and losing two, that overall sum of roughly 100-odd-thousand dollars?

Paul Craven: Thanks for the question. I think what we’d want to point out is no…. You can qualify for the catastrophic category in those instances, depending on the combination of injury. So it’s not necessarily true that if you lost a single limb, you would be limited by that. You could qualify in the catastrophic, is my understanding.

Stephanie Higginson (Chair): MLA Valeriote, I’ll put you back on the list. It looks like you’re….

If there are no other first questioners, then I’ll go to the second-questioners list, which starts with MLA Kooner.

Steve Kooner: Mr. Craven, a follow-up question to what Stephanie had asked earlier in terms of the court system. Has the Ministry of Attorney General’s budget allocation for the court system gone down since this ICBC enhanced-care system came in?

Paul Craven: I’d have to sort of compare those figures, but I think the general answer is no.

Stephanie Higginson (Chair): Is there a follow-up there?

Steve Kooner: Why not?

Paul Craven: Because as I explained to the earlier question, there are continuing volumes of cases that continue to go through the B.C. Supreme Court overall that justify the budget and the system.

Brennan Day (Deputy Chair): I’m just going to go back to slide 10. Just some clarification on the death benefits. So the cap on gross yearly employment income up to $454,000, is that an annual number or a one-time payment number?

Paul Craven: I think if we’ve got your question right, it’s a one-time lump sum payment.

Brennan Day (Deputy Chair): Okay. And then just a quick follow-up question on the same table. The catastrophic 24-hour-care monthly benefit of $11,872 a month, my question is: what would be considered under 24-hour care, and would that be the cap on all payments?

[10:05 a.m.]

Because $11,872 a month is pretty low. I mean, just on an hourly basis, that’s $16.45 an hour. That’s not even somebody at minimum wage. Obviously, if somebody is severely disabled and needs 24-hour-a-day care, I would say that that would be very hard to staff. I have a wife that works with adults with developmental disabilities, and that would be pretty tricky.

I’m wondering. Is that the cap, or are there other benefits that could be layered on top of that? Just explain better how that would work.

I have a wife that works with adults with developmental disabilities, and that would be pretty tricky. So I’m wondering. Is that the cap, or are there other benefits that could be layered on top of that? Just explain better how that would work.

Paul Craven: Yeah, the benefits are layered. That particular benefit is really about assisting people with their daily living personal care. That’s what that covers. Other benefits can be layered on top of that, in terms of health care benefits, etc. Of course, that’s the amount that was set and then increases based on being indexed.

We talked, also, about a general review, which would look at these on a periodic basis to ensure that they can achieve the objective — that they’re high enough.

Jeremy Valeriote: Just to follow up about the number of limbs. You said under certain conditions. Are you able to provide a rough sketch of what those conditions might look like, or examples? Or is that something maybe that would have to be taken away? Sorry this is under “certain conditions would qualify for catastrophic benefits even in the loss of one limb.”

Paul Craven: Okay. Let’s start and just refer back to what we talked about earlier. The relevant part of the regulation is section 2(2) of the Permanent Impairment Regulation, which includes one amputation in the definition. But when combined with another injury — for example, loss of vision, certain brain injuries, nervous system injuries, etc. — if it meets a formula that is set out in subsection (1) of the regulation and meets a particular formula, which is 80 percent, based on a number of things that are included there....

If you’re looking at the regulation, you would want to look at subsection (g), and then under that, there are a number of subsections that deal with amputation and a number of other factors, all the way up to (i) to (viii), and there may be more.

Stephanie Higginson (Chair): MLA Valeriote, do you have a follow-up?

Jeremy Valeriote: No.

Stephanie Higginson (Chair): Sorry, I was waiting to see if you had a follow-up.

Okay, that takes us to the end of the second speakers list. Any further questions?

Steve Kooner: Earlier, Mr. Craven, you mentioned that you couldn’t comment on the profit of ICBC. Could you answer what happens to the profit? Is it kept in the corporation, or is it taken out of the corporation? Where does the profit go?

[10:10 a.m.]

Paul Craven: I just want to first make the distinction between optional insurance and regular insurance. The regular insurance element is on a not-for-profit basis, whereas the optional can be on a profit basis, and they’re competing in the market associated with that. The revenue associated with that bylaw is required to stay in the corporation.

Janet Routledge: I have a sense that we’re probably drawing this discussion to a close, so I just wanted to say that I’ve always been a proponent of the principle of enhanced care, and you’ve given me a lot of really good, concrete reasons to continue to support that. I really like the distinction between enhanced care and no-fault. I think that it’s the fault part that sometimes triggers a reaction, and the explanation is very good.

Jeremy Valeriote: Before we let you go, I just want to make sure I have a clear sense of the process that somebody would go through in the event that they’re dissatisfied or object to the way the benefits have been administered. Am I correct? It’s Civil Resolution Tribunal followed by the Fairness Office, and if that doesn’t yield results, then they can go to judicial review?

Also, I’ll just layer on another question. Is the Fairness Office entirely within ICBC, or is it external or independent?

Paul Craven: I’ll start with: ICBC has a duty to the insureds to ensure that they get the maximum out of their benefits. So that’s a starting point and new in law.

Obviously, part of that starts with a conversation between your representative to explain and identify any issues that you may see…. That might result in resolution itself. ICBC can talk, maybe, about what processes of escalation they have for resolution within sort of that conversation. You should talk to them about that.

Then the fairness officers are there broadly. It is independent, designed to be independent and appointed by government and, as a result, can also assist in relation to that. That’s all…. You don’t have to go to the CRT to access that. You don’t have to have exhausted your remedies.

But when you are looking for a decision, then yes, you would go to the CRT. If you’re unsatisfied by the CRT, then you can seek judicial review and go to the Supreme Court on a judicial review basis.

Of course, also sitting outside of that is the Office of the Ombudsperson, which generally will take complaints about unfairness in the system, in addition to the fairness officer.

Stephanie Higginson (Chair): MLA Day?

Brennan Day (Deputy Chair): Sorry, no. I don’t have another question, since it seems like it’s an ICBC question.

Stephanie Higginson (Chair): Okay. Further questions?

Steve Kooner: Mr. Craven, you mentioned earlier about the types of claimants. Before, the system allowed for people to claim against others. Now, regardless of how the accident happened, both parties can make claims.

[10:15 a.m.]

I guess I’ve got a couple of questions looped into the same main thought about the negligent driver. Is the negligent driver now entitled to the exact same benefits as the non-negligent

I guess I have a couple of questions but looped into the same main thought about the negligent driver.

Is the negligent driver now entitled to the exact same benefits as the non-negligent driver? And if so, what has been the monetary consequence on the Insurance Corp. of British Columbia having to pay out those benefits to the non-negligent drivers as well? And what is the corporation forecasting? How much is it going to cost to keep paying those negligent drivers throughout, until those benefits get exhausted? I guess they would never get exhausted. They would stay on until they need them, until the need disappears.

So factoring…. Going back to the point of the negligent drivers now, the situation has now changed. They are entitled to benefits. What sort of cost analysis has the Ministry of Attorney General done to assess how much it is going to cost to actually be compensating them, and then what benefits are they actually entitled to?

Paul Craven: I just want to start by clarifying. Under the old system, under part 7 benefits, some benefits were available to any driver regardless of their role in the accident. But you are correct that as a result of the new system, individuals involved in an accident are able to avail themselves of enhanced benefits.

There are some limitations and exceptions related to that. As we talked in the presentation, for example, where they’re convicted of certain criminal offences, benefits may not flow as a result. Of course, the overall plan and structure was designed based on the ability to cover those costs.

So ICBC can talk again about the actuarial nature of that, but the system, by virtue of being able to maintain itself overall without the net losses that were experienced previously under the previous system — sort of a positive balance as well as the impact on premiums that we’ve talked about — suggests that it’s achievable.

And then the history of, again, other similar systems in Saskatchewan and Manitoba that have been able to address it over a longer period of time, suggest the overall viability of the system.

Stephanie Higginson (Chair): Other questions?

Steve Kooner: Just a follow up question to that one. In legal principles, there’s a legal principle of the deterrence. Normally it’s used in the criminal setting. But looking at it from the perspective of a more of a civil setting, if negligent drivers are…. Say, some of them could be prone to cause more accidents…. What’s the deterrent effect?

Was there more of a deterrent effect before? Was there any sort of analysis done on that in terms of…? If negligent drivers are now getting paid out benefits and they know they’re going to get paid out benefits, does that help or not help to kind of deter those negligent drivers from causing accidents?

[10:20 a.m.]

Paul Craven: I guess we start with the observation that nobody wants to get into an accident, a motor vehicle accident, and under previous systems and general systems in other jurisdictions, individuals have insurance to pay their liability. They’re very seldom personally liable.

We’re not aware of any studies that suggest that the fact that you would potentially be civilly liable would deter or change your driving behaviour. There are lots of factors that impact people’s driving behaviour. I think that goes back as far as the royal commission and Wootton, I understand.

Of course, there are consequences as a result of the higher premiums, based on your driving record, which also existed previously, as well as the threat of criminal offences. So there are a lot of other factors that are the same and that would impact how you would look to driving. Unfortunately, people still drive recklessly on occasions, causing accidents.

Stephanie Higginson (Chair): I thought I had a follow-up, but I’m just going to leave it there. Other questions from folks? No.

Seeing none, I’m going to thank you very much for coming and for the very thorough presentation, which will require a reread of Hansard later.

Just for folks, there is a lot of public interest in this committee, so for Hansard, the purpose of this particular part in this meeting, in our minds, is to recognize that there was a problem. What the problem is that was trying to be solved, from a legal framework, was presented today, and also what the solution was.

Our job, going forward, is to hear from folks who have interacted with the system — later; that’ll be part of the submissions — to see if it’s working, according to the public, and then to make recommendations to you, if necessary. This is just the beginning. I also welcome your response that you would come back if we had further questions. That is also available to the committee throughout the process of the review.

The next stage, for us, is that we’ll hear from ICBC, who will also lay out what the problem was and what the proposed solution was. Then we’ll hear, from submissions from folks, about whether the people who interact with the system agree whether it’s working or not.

I appreciate your time today, and we’re going to give you a gift of 35 minutes. Thank you very much.

Paul Craven: Thank you, Chair.

Stephanie Higginson (Chair): For the committee, we’ll let our guests leave. Maybe we’ll take about a five-minute recess, and then we’ll come back and try to move an agenda item up. We’re going to talk a little bit about our workplan when we don’t have our guests in here. Then we’ll see if we can actually get ourselves out of here a little bit earlier, because we’ve got 30 minutes today. So five minutes, and then we’ll meet back here.

The committee recessed at 10:24 a.m.

The committee resumed at 10:32 a.m.

[Stephanie Higginson in the chair.]

Stephanie Higginson (Chair): Okay. We’re going to call the meeting back to order.

I look for a motion to go in camera.

Motion approved.

The committee continued in camera at 10:32 a.m.

The committee continued in open session at 10:48 a.m.

[Stephanie Higginson in the chair.]

Stephanie Higginson (Chair): The committee is going to call a recess until 11:45.

The committee recessed at 10:48 a.m.

The committee resumed at 11:46 a.m.

[Stephanie Higginson in the chair.]

Stephanie Higginson (Chair): Okay, good morning, for 15 more minutes, everyone. I’ll call the meeting back to order.

I am pleased to welcome staff from ICBC. Earlier I stole people’s thunder by introducing everyone individually, so I’ll let you folks introduce yourselves. We’re going to hear from ICBC, a presentation from them on the enhanced-care model, specifically related to sections 10 and 11 of the Insurance (Vehicle) Act.

Then after that, we will have questions from the committee to ICBC based on the presentation. And then after that, I think we will be wrapping up for the day.

With that, I will turn it over to our guests from ICBC.

Jason McDaniel: Thank you very much, Chair.

I’m Jason McDaniel. I am the CEO of ICBC, and it’s a pleasure to be invited to be here with you. I have two of my colleagues here with me to answer the more challenging questions: John Beesley, who is the director of programs and strategy for recovery claims at ICBC; and Paul Setticasi, the director of claims injury recovery services. They will assist as I need.

I also want to thank and acknowledge — we had the opportunity to listen in this morning — Paul Craven and the staff at the Ministry of Attorney General. I am very appreciative of what I know is a lot of work both for this morning and overall in supporting this committee.

I also want to let you know that ICBC as an organization welcomes this committee review. Enhanced care is the biggest change in auto insurance in this province probably since we were formed in 1973. We very much want to find opportunities to strengthen it, to improve it, to best serve the people in the province, and so we’re very happy to be part of this process.

I’m going to focus my presentation today on part 10 of the Insurance (Vehicle) Act. That’s the part about injuries. The review of the committee, I know, is both part 10 and 11, 11 being basic vehicle damage. We are here and ready to answer any and all questions the committee may have about the second part, but I think the part about how we support people that are injured in collisions is really the core focus of what I want to talk about today.

I think that that’s important, because enhanced care, when it’s working well, is a system that is designed to do what I expect you would want for yourselves, for your family, your friends, your colleagues, and that is to help put people back in the position they were in before they were injured and back to the lives they had before they were injured as quickly as possible, and when that isn’t possible, to provide people with good support and take good care of them.

Also, for the purposes of the committee, it may be useful to a bit of how I come to be here before you…. I am new as ICBC’s CEO. I’ve been in that role since just before Christmas on a permanent basis but at ICBC for 20 years. I entered ICBC as a lawyer, where I primarily provided coverage advice on the old lawsuit-based model that we’ve left. I did that work for five years before, starting in 2001, 2002 at a private firm.

[11:50 a.m.]

Since joining ICBC, I’ve had a variety of roles. Since about 2015, they’ve included identifying opportunities and improvements to the auto insurance system. That work included, starting in 2016

in 2001, 2002 at a private firm.

Since joining ICBC, I’ve had a variety of roles. Since about 2015, they’ve included identifying opportunities and improvements to the auto insurance system. That work included, starting in 2016, supporting a board of directors when the government of that day asked for a report to improve the system, which ultimately became the EY report Affordable and Effective Auto Insurance, which I expect to be part of the committee’s materials.

I say this because I’ve very much lived in both the old system and the new system. I believe the new system to be a better one to take care of people injured in the province, and that will inevitably come through in some of the comments I make today.

Now I’m going to turn you to slide 3. At ICBC, one of the things we really focused on doing is not spending a lot of time comparing ourselves to the old system. We wanted enhanced care to be the best it could be, not just better than that system we left behind. The challenge with that approach though is we sometimes find ourselves competing against what I’m going to call a false narrative about the old system. So I think it’s important today that I highlight a bit of the challenges in the system we left behind when we moved to enhanced care in 2021.

It was…. The false narrative can leave the impression that somehow people very quickly received all the money they would need for life to deal with their injuries without having to deal with ICBC or anyone, that it was unique in how it meted out justice to irresponsible driving behaviour, and that it could do both of those things in a way that could be purchased affordable auto insurance. The fact is that those things just aren’t accurate representations of the system we left behind.

Starting with thinking about what you used to pay for when you bought your car insurance every year, most of what you were purchasing was protection from being sued. That was the bulk of the cost of your insurance. It wasn’t money for you or for your benefit. It was money to protect from being sued. And as other people were being sued and as those lawsuits got more expensive, your insurance continued to get more expensive to protect you from the event that you might hurt someone else.

The system was slow. It was not at all unusual for litigated claims to take up to five years to resolve. We still have, in that system we left behind in May 2021, about 11,000 claims that haven’t yet been resolved, that haven’t yet had a settlement payment made. It was a slow system.

It wasn’t always equitable either. If you didn’t have someone to sue, you would receive very little in that old system. Because so much of your premiums were going towards providing protection from being sued, there was very little left for accident benefits for you — up to 150,000 till 2019 and 300,000 in medical and rehabilitation benefits for life total from 2019 to 2021.

So if you hit some black ice or if you or your teenager made a split second judgment error, turning left on a yellow light in a busy intersection, or if you hit an animal, which alone happens about 12,000 times a year, you would just receive very little for your care and your recovery. And that was a consequence of that system.

It also really failed, in most cases, those most in need. The fact is that there was, in most cases, an artificial limit on how much you could receive based on how much insurance was bought by the person that hit you. So if the person that caused the accident had about $2 million in coverage — most customers had $2 million or less — then unless they had a bunch of liquid assets, which was very rare, that ultimately became the maximum amount available, subject to other fees, which I’ll talk about.

It was inefficient. In litigated claims, up to a third inevitably gets paid to the lawyer as a contingency fee, and almost always at least 25 percent. That much is going to lawyers. We know confidently it was in the neighbourhood of a billion dollars a year that was funding the legal industry collectively through premiums.

[11:55 a.m.]

Although it’s sometimes convenient to say, “Well, that was ICBC’s money,” the reality is that was your money. That was everybody who buys insurance…. That was every ratepayer’s money. When you were paying insurance and were wondering where that money is going, $1 billion dollars of it, conservatively, was going to support the legal industry.

The next thing is about justice. The reality is

buys insurance. That was every ratepayer’s money. When you were paying insurance, when you were wondering, “Where is that money going?” $1billion dollars of it, conservatively, was going to support the legal industry.

The next thing is about justice. The reality is that about 1 percent of our claims in the old model went to trial, about 1 percent. In that 1 percent, in almost all of them, liability was admitted. What that means is there was no discussion before the courts about what somebody did wrong or how they caused the accident. There was no facing of the person to hold them to account. It just didn’t happen in the system.

Even financial consequences, I could count on one hand in a given year — and most years I wouldn’t have to get past a couple of fingers — about how many people had to reach into their own pocket and contribute towards settlements when claims resolve. So what that meant was, in most cases, when you caused an accident, ultimately, what would happen is you would receive a call from ICBC at some point to say ICBC resolved that claim against you. Then your premiums would go up, much like is true today.

The system just did not provide justice, as it is sometimes described. That leads us to a bit of a hard truth, which is in addition to those failings I’ve mentioned, a system that is based on lawsuits will inevitably become unsustainable and unaffordable. So you can have a system based on lawsuits as the means to deliver compensation to injured people, or you can have an affordable one. But I don’t know anyone in any jurisdiction in this country that has figured out how to do both. I do not see a path to being able to resolve both.

I’m at slide 4. In that context, as ICBC went to reform — two goals. The first was to be affordable. Very important. We needed a system where we would not be an increasing chunk of people’s wallets every year, that the cost of car insurance would not be going up more than wage increases every year. That is the only way to have a sustainable system, a system, when combined with operating efficiently, that could deliver on that.

The second goal was care, a system of care where the emphasis was: how do we help people get back to health and back to function as quickly as possible? So the combination of those two goals, and to take good care of people when getting better was not part of their path — those were the goals that led to the move to enhanced care in 2021.

At slide five, I want to talk a little bit about the affordability piece a little deeper. I’ll touch on the graph there in a second. But first, I want to say affordability, very much acknowledged, can only be considered in the context of: what do you get for your money? It isn’t enough to be cheaper. You have to consider what you are getting for the money you provide.

I’m going to start with the difference in price between the systems, but ultimately, then shift to: what is the care, and where does the money go in the new system? The reason I’m starting here is that we should be under no illusion that the difference in cost between this system and the one we left behind is a few dollars a year for customers.

The difference is hundreds of dollars a year. Conservatively, $500 a year would be the difference in price for every policyholder if we were to shift from this system to the old system, $500 a year per policy per customer. We know that if there is a hierarchy of needs of ICBC customers, it starts with affordability. It starts with price.

I have lived through the system where ICBC was not affordable. That is the first expectation of us. People need to know that they are not going to have to keep paying more and that we will not be losing money. That’s why I’m really proud to say that since ICBC moved to the enhanced-care model, we have seen the basic rates, the mandatory portion of auto insurance at the same rate it was in 2021. It has not increased. It will not increase until at least 2027 and maybe longer than that. We’re going to go seven straight years without an increase in basic auto insurance.

[12:00 p.m.]

On top of that, when we shifted to enhanced care, the full cost of premiums between basic and optional dropped on average about $490, 28 percent. That’s how much the full cost of auto insurance dropped. The basic portion, as I said, has not increased since. On top of that, ICBC has been able to provide about $640 in rebates per insurance policy since we switched systems.

If you see that graph that I have for you at slide five, I think it’s really illustrative.

dropped, and the basic portion, as I said, has not increased since. On top of that, ICBC’s been able to provide about $640 in rebates per insurance policy since we switched systems.

If you see that graph that I have for you at slide 5, I think it’s really illustrative of the point I’m making. The blue line starts in 2013, and that’s compounded inflation rates. So that has inflation increases every year. Anything above that line means it’s more expensive than your wage increases, realistically, are increasing, because it’s more expensive than inflation.

The purple line is what ICBC rates were doing since 2013. These are the basic rates. And then you see the drop when we made the shift to enhanced care. And then you see, as we move out to ’24-25, that gap where now the rate of inflation is significantly higher than the rate of ICBC increases when we go back to 2013 dollars. It was the exact opposite before the shift was made between the two systems.

Let’s take a look at other models as I go to page 6 of the deck. The need for a care-based system to have affordable rates that aren’t taking an increasing chunk of people’s wallets every year is not a B.C.-based conclusion exclusively. What we are doing in B.C. really is not a unique experiment or an individualized approach to things. This is….

By next year five provinces in the country will be in a care-based system, and four of those provinces that are already in that system, well, those are the four with the most sustainable auto insurance costs every year.

The fifth that’s coming is Alberta. I think it’s really important to look at the Alberta experience. They’ve seen rates increase by about 15 percent over the last five years. But what the insurers are saying is, in 2024, they were collecting about 18 percent less than they were paying out in claims — that they lost about $1.2 billion.

They are in the system with a cap on minor injuries, where they are raising rates higher than the public is comfortable with, and that they are still losing money. It is a world that we’re familiar with in ICBC before we made the changes in systems. And so they will be moving to a care-based model.

I think the takeaway is lawsuit-based insurance systems are unaffordable. That’s not just here. It’s in all the jurisdictions across the country, and we’re seeing a shift, as you see the purple on that slide that I provided. It is a shift to care-based as the norm, as the approach for managing the cost of auto insurance.

So what do you get for your money? Equally important question, as I said, as I move to slide 7. The reason I began with affordability is I think it’s really important to start with the baseline. The old system can’t be delivered affordably.

But the next equally important question is, how can you have a care-based system? And how can you do right by people? And how can you have the focus and the money and the energy to be on care rather than spending a lot of money equipping everyone on all sides for battles — to be aligned in support and recovery of people and their paths?

One of the ways we do that in enhanced care is provide very simple, easy access to treatment. So for the first 12 weeks after a collision, all you really need is a claim number. You have access to the care you need, whether it’s physiotherapy, chiropractic treatment, massage, counselling, and that’s just to name a few of the treatments we provide. They’re easily accessed, and they’re accessed without the need for approval.

After that 12 weeks, then all you need is providers to provide reasons on why further treatment will be needed, how it will support recovery. And 92 percent of the time, ICBC is approving those plans that come in after the 12 weeks and approving continued treatment.

And there is no maximum limit. I mentioned in the old system it was $150,000 for life, up to 2019, $300,000 after that. There is no maximum in the new system for care and recovery benefits. It is what you need to support your care, support your recovery back to the life you had before the injury, as long as you need it.

[12:05 p.m.]

Wage loss as well. Everybody earning about $122,500 or less is receiving 90 percent of their net income when they’re off work because of injury. That’s about 90 percent of the people in this province. So 90 percent of British Columbians receive 90 percent of their net income when they’re injured and unable to work because of a collision.

Those in the other 10 percent have choices. Many of those in that group already have other long-term disability benefits

of the people in this province. So 90 percent of British Columbians receive 90 percent of their net income when they’re injured and unable to work because of a collision. Those in the other 10 percent have choices. Many of those in that group already have other long-term disability benefits that provide for employment loss.

As an insurance guy, I would recommend that all of those folks in that group have long-term disability insurance to provide for those losses. If they don’t, we sell them an optional product that they can purchase. But rather than having those in the lower 90 percent fund the wage-loss needs of the top 10 percent, that is a product they purchase to have those costs focused with the right group of people.

Last thing I’d say on this slide. I know this came up this morning, so I’ll just quickly tell you my perspective on the term “no-fault.” We don’t use it. I’m not offended by it. It is sometimes, in industry, the term used to describe care-based systems. But the reason we don’t use it is that it isn’t accurate. It leads people to the conclusion that there’s no consequence for being at fault.

The truth is ICBC continues to assess fault on every single collision that occurs in this province. We continue to increase the premiums of those that cause collisions in the exact same way we did before the change. And the legal and regulatory consequences are the same as well. I mentioned that in the old system, causing a collision meant your insurance paid, and you got a letter, and your premiums went up. In the new system, the consequences are almost identical, with one difference.

The difference is that if you buy insurance, now the insurance you’re purchasing is for you. It’s your premiums. You paid for them. You paid for care to cover you if you hit the black ice, if you make a mistake, if you hit an animal on the road. Your insurance is there for you, and it provides for your care without assessing whether or not you have someone that you’re able to sue for it.

I think that’s the right thing to do. I think it supports people getting back to function, getting back to supporting the economy and getting back to the lives they had, with their insurance covering that.

At slide 8, I want to talk a bit about what enhanced care has done since it started. We paid out about $1.9 billion to 246,000 customers since enhanced care began. What’s important to remember about those numbers is that those aren’t settled files. Those are payments made to date. Many of those customers will have entitlement to claims and coverage for many, many years to come. But so far, out the door, close to $2 billion to 246,000 customers.

As I mentioned, there are still 11,000 files in the old system that haven’t seen money, while this much has been paid out in the new system.

Really importantly, about 96 percent of claims payments made now go directly for the benefit of customers. So as premium payers, when you wonder, “Where is my money going?” the claims payments are not going to support the legal industry or the broader adversarial pursuit. They go to customers. That’s where the money is going — 96 percent of claims payments in this system — directly for the benefit of customers.

If I may, I’m going to turn you to slide 9 to give you a bit of a personal example of what enhanced care does. You’ll see a photo on slide 9. It is a photo of Amanda, one of our customers, who has invited us to share her story. With her is one of our advanced care and recovery specialists at ICBC. I was lucky enough to be the photographer for this photo when I was in Terrace and was invited to meet Amanda.

Amanda, in 2022, hit some black ice and was in a horrible collision. Vehicle flipped. Amanda became quadriplegic. The injury was so bad that she was flown into Vancouver and had to spend 18 months on her care and recovery in the hospitals in Vancouver.

The first thing ICBC was able to do under enhanced care that we never would have been able to do in the old system was fund her husband and her three-year-old daughter and her sister to stay and live in Vancouver with Amanda for the whole 18 months.

[12:10 p.m.]

Then at the end of the 18 months, Amanda was ready to go home, but she didn’t have a home she could go to that was wheelchair-accessible. But she wanted to be back in Terrace. She wanted to be back with her family. So what ICBC was able to do is not just fund but support, arrange and coordinate the building of an addition on her in-laws’ home, a two-bedroom addition that would allow Amanda and her daughter to live there and

but she wanted to be back in Terrace. She wanted to be back with her family. And what ICBC was able to do is not just fund but support, arrange and coordinate the building of an addition on her in-laws’ home, a two-bedroom addition that would allow Amanda and her daughter to live there in a wheelchair-accessible place.

And that all is arranged, and that photograph is taken in that home. I’m going to use Amanda’s words. “It’s an in-law suite on my in-laws’ property. I was able to have a two-bedroom home built for my daughter and me. I don’t think there would have been anywhere else in Terrace I could have lived with my daughter. It was really nice for ICBC to be able to support me in that way.” Now, Amanda’s working on being able to get in and out of bed by herself, again, with the ongoing support of ICBC.

This was a 2022 collision. Because it involved black ice, probably Amanda would have had no one to sue and no ability to get any of these things. And if she did have the ability to sue someone, in my experience, four years in for a claim like this, it would still be sitting open. And we’ve been able to do all of those things for Amanda and will for the rest of her life.

Slide 10, I think, is another important story of what ICBC is able to do. It’s a look at what happened after the Lapu-Lapu tragedy that happened just over a year ago. On behalf of the company, our hearts still go out to everyone impacted by this tragic event. Directly involved are those close to it. It happened close to where I live, and it is the most horrific event we have experienced at ICBC, and it will no doubt be the most expensive claim we have ever had at ICBC.

And we’re thrilled about that. We are thrilled that we are able to provide for people in a way that was never true before. We paid almost $5 million out on Lapu-Lapu victims since it happened. That includes over $2 million in medical and rehabilitation benefits, $1.5 million in death benefits, about $750,000 in permanent impairment benefits, more than $103,000 in funeral costs, and $22,000 for grief counselling.

This would not have been true in the old system. One of the biggest things…. You’ll see on the slide that we compared it to a bus crash that we had in Merritt in 2014 where 53 people were injured. To date we’ve paid out $1.7 million only for care and recovery benefits on that file. We’ve paid out $7 million in legal fees.

Now, there’s another $10 million in insurance policy there, but people are still battling about who else is at fault and what portion should each person be able to receive of those benefits, and it’s still sitting unpaid from a 2014 incident, while we’ve already paid out $5 million on Lapu-Lapu, and I expect when all is said and done that number is going to be closer to $20 million. And, again, that is $20 million of premiums very well spent in a way that really matters to our team.

Slide 11. How are we getting better? Enhanced care is not static. We are better at this than we were when we first started. We’re continuing to learn, to evolve and improve how we support customers on the path back to their lives they had before a collision. We do that by listening and learning, listening to our customers. We have very close relationships with health care provider associations, disability associations, our own employees, and we’re improving.

Some of the things that have happened already as a result of that: much deeper enhanced customer experience, training focused on empathy for everyone in the enhanced care book of business. We keep getting better at this, focusing on this, assessing and measuring how we’re showing up with empathy for people when they had probably one of their worst days.

Counselling benefits have been improved because we listen to customers. It used to be that only family members of people who had suffered a fatality could get counselling. Now anyone, where there’s been a catastrophic injury, can access counselling as a relative of someone who’s been through that.

We used to be the second payer for medical equipment. We saw that was slowing down the process for people that needed a wheelchair or other equipment. So the regulations were changed. ICBC advocated for those changes to make us the first payer of those.

[12:15 p.m.]

We also know, and it’s true, for a small but really important group of our customers, filling out applications for these benefits is hard, harder than it should be. So we’ve done a few things to support that. We created a customer support desk. The purpose of that desk is, where we’re realizing a customer is struggling, we have a small team who have all the time to go line by line with customers

group of our customers.

Filling out applications for these benefits is hard, harder than it should be, so we’ve done a few things to support that. We created a customer support desk. The purpose of that desk is where we’re realizing a customer is struggling. We have a small team who have all the time to go line by line with customers, to tell them what receipts they need, what they need to fill, help them do that.

We’ve also started what I think is a really exciting pilot program with brain injury associations that I expect to be expanded. We are now providing funding directly to brain injury associations so that they have the time and the resources to help their clients fill out those forms and those applications for their customers that need some help. We’re getting really positive feedback through that process. It’s one I expect to be growing.

We’re improving on how we deal with concussions. Concussions are a real serious injury that have real miraculous opportunities with the right early intervention. We have set up, through listening to our health care providers, a new interdisciplinary process with multiple different fields to treat people early who suffer concussions and other forms of brain injuries to help them get back to health quickly.

New channels, two of the new things. ICBC is developing more online tools to make it easier to get us what you need, to get easier to get access to the benefits. One just started in March, and that is that you can now apply for those income replacement benefits online. It is easier to apply. The feedback from customers is consistent with that.

Equally important, it’s now easy for us, on the back end, to calculate entitlement and get those payments out. We have about halved the time, since we’ve made this move, to about 14 days from time of application to that first cheque.

I say “cheque” as a euphemism. It’s usually an electronic fund transfer. But we are getting people the money they need for their rent and their groceries. We’re measuring this in weeks. In the old system, we were measuring this timing in years, so this is another improvement.

We also have a new tool to find a provider. You can go on icbc.com today. You’ll find over 10,000 health care providers on that tool who are allowed to direct bill ICBC. And 72 percent of them also commit that they will not charge any fees above the ICBC rates, which means you can find someone who direct bills. And if it’s important to you to find someone who does not charge above the ICBC rates, you can find that, too, in the system.

We try to do all these things while running a tight, efficient operation. The efficiency of ICBC, compared to private industry. I would say we blow private industry out of the water. As an efficiency rate that’s measured as a metric, we’re about 23 percent of premiums that it takes to run the business. A private industry best standard is in the low 30s. We do that while also offering road safety and driver licensing and other non-insurance services that they don’t have to provide.

The size of the organization on an annual compounded rate is about a half a percent per year over the last five to six years, despite the fact that demand for every service we provide has increased by more than that.

I’ll go to my last slide to sum things up for you. As I see ICBC’s role, it’s to really support and provide the safe, affordable, efficient movement of people and goods all around this province, from taking your kid to hockey practice to showing up at the night shift at the hospital, to the goods that show up at your house or your local supermarket.

Enhanced care and doing that is not perfect. I don’t think it’s perfect in design. I know we have not been consistently perfect in our delivery of it, but there is no doubt in my mind it is better than the old lawsuit system we left behind. It’s better at managing the care, recovery and support of injured people in the province. It’s better at managing the asks we make of people’s hard-earned incomes.

And we’re learning. This is a commitment I make that I expect and hope to be validated by some of the others that you will see. We’re listening, we’re learning, and we’re getting better. Disability organizations and the health care providers and our customers and our employees are giving feedback that’s continuing to have us improve. And that commitment now extends to this committee.

[12:20 p.m.]

I’m looking forward to the advice and recommendations of it. You have both my personal and our corporate commitment. We are here for whatever you need. I will come back whenever asked. We will provide whatever information you seek, and we look forward to what will come from it.

With that, I will turn it back over to you and look

I’m looking forward to the advice and recommendations of it. You have both my personal and our corporate commitment: we are here for whatever you need. I’ll come back whenever asked. We will provide whatever information you seek, and we look forward to what will come from it.

With that, I will turn it back over to you and look forward to answering your questions.

Stephanie Higginson (Chair): Well, that was excellent and informative. Just like the previous presentation, there’ll be a lot of references back to Hansard to get those details.

I really appreciate you defining the problem that you were facing — an unsustainable system, it sounds like, with rates going up, service going down and profitability being eroded — and the solution that you laid out. As I explained this morning, our job now is to hear from the public and see if they feel like it’s working. With that, I will seek questions from my colleagues.

Steve Kooner: First of all, thank you for your presentation. My first question is, we’ve heard some positives that you have highlighted. What have actually been some of the challenges for ICBC since the new system has been adopted?

Jason McDaniel: It was a massive cultural shift for our organization to shift from what was working in an adversarial model to working in a care-based model. In our environment, we invited people to shift systems and models with us.

It has taken work and effort and direction from senior leadership to have that shift in focus really take heart, where people see their role as people’s care and recovery partners in getting better and in measuring success in how we get people back to health and back to function. We knew it would be, but it is a big shift in how we do our work. We keep getting better at it, but the growing pains were more significant in the beginning, for sure.

Stephanie Higginson (Chair): Do you have a follow-up question?

Steve Kooner: No.

George Chow: Thank you for the presentation.

I know you have a Fairness Office. When was that established?

And do you provide language translation for claimants?

Jason McDaniel: Great questions, thank you. On fairness, there’s two different things. We have a fair practices office that’s internal at ICBC. We have had that office, under different names, for a long time. What is also new is that there is an independent fairness officer who is not appointed or hired by ICBC. They’re appointed by order in council, and they sit, independent of ICBC, to take and receive process complaints. The importance of these roles has increased, but we’ve always tried to do that.

We absolutely have language services, direct, and booklets and pamphlets in Cantonese, Mandarin, Korean and Punjabi. We also have access to translation services — to, I believe, 180 other languages. That is where we’re at today in providing those services.

George Chow: Just a clarification on the translation: that’s just printed material, right? Do you have any kind of instantaneous translation to deal with your customers, your claimants?

Jason McDaniel: We absolutely do. As I mentioned, we can directly provide services in those languages I mentioned — Korean, Cantonese, Mandarin and Punjabi — and other translation services. Maybe I will hand it over to my colleague, Paul Setticasi, to tell you a bit more detail on how that works.

Paul Setticasi: We do offer language services directly. We actually have language desks, and Jason outlined Mandarin, Cantonese, Punjabi.… We actually have language desks in those languages. Then of course we do have translation services for a whole suite of, I think, up to 300 additional languages, in the event somebody speaks one of those 300 languages.

[12:25 p.m.]

George Chow: One of the cases that we take.… We do help our constituents in dealing with ICBC cases. I remember meeting with one policyholder, who basically was saying that ICBC’s attitude was that they were insinuating that this was a fault — you know, fraud — and that he found the experience very intimidating. Of course, these are

policyholder who basically was saying that ICBC’s attitude was that they were insinuating that this was a fall, fraud, and he found the experience very intimidating.

Of course, these are isolated incidents. What’s your approach in terms of dealing with the customer in a fair, open manner?

Jason McDaniel: Member, thank you, and I’m sorry to hear about that constituent’s experience.

I believe truly and the message we provide to our staff is we have to, especially in this enhanced-care model, start from a position of trust and faith with customers. That is the only way to do what is both right by customers and, ultimately, the smart decision to help people on their path to recovery. We must begin by taking people at their word.

Trust can be lost, but we should not be…. Our direction from senior leadership down and always…. I can’t promise it’s perfectly executed in every case, but I can say it is our commitment and our expectation that we show up with empathy, we take customers at their word as the starting point and trust is given. Only if the evidence leads you to a different path should that shift.

Brennan Day (Deputy Chair): Just before I start, I’m going to go back to the Lapu-Lapu slide. You said that you’d expect the benefits to be paid out to reach somewhere in the region of $20 million. Can you just confirm that I didn’t mishear that? We don’t have the transcripts in front of us.

Jason McDaniel: That’s my best estimate at this time. It’s $5 million already in the first year. That includes people that will have wage-loss claims for many, many years, medical and rehab needs for many years. It is hard to perfect exactly what the number will be, but that is a number that would not surprise me at all — $20 million.

Brennan Day (Deputy Chair): So the $20 million is the expected lifetime cost then?

Jason McDaniel: So $5 million so far, and what I expect for this claim is that it will be likely in the neighbourhood of $20 million, yes.

Brennan Day (Deputy Chair): Okay. That seems quite low considering there were 11 victims deceased and 32 directly injured.

Your slide cites 181 injured customers. Could you just expand on how many of those 181 injured customers are still receiving benefits?

Jason McDaniel: Member, I may have to get back to you on the specifics of it. The 181 will include, for example, some people who have just received some counselling because they witnessed the event, so there’s a long range.

If I could give some context, it is likely that the driver would’ve had $2 million in insurance coverage. So on a system based on lawsuits, if the driver was the only one at fault, $2 million minus contingency fees by lawyers would be all that would be available for lifetime. We’ve already spent over five million dollars to date. I feel very confident that the cost from ICBC premiums is much higher than it ever would’ve been in the old system, and as I’ve said, it is money we’re very happy to be spending.

Brennan Day (Deputy Chair): Okay, so in that same slide, I’ll just follow up since it is related — the no limit on recovery benefits per customer. I asked for clarification from you guys previously. Because now there’s no constrained limit when a suit gets settled, how is ICBC, one, staffing? Because you have, effectively, a parabolic caseload within ICBC as you add more cases every year, how are you constraining that cost long term?

It does seem like this sets you up in future to effectively be a social services agency more than an insurance company. Because you say that there’s no limit on recovery benefits in future, you inherit these people for life. So I’m just wondering how you’re removing people from that list and preparing for that sort of manpower growth, because, clearly, that file gets bigger every year.

Jason McDaniel: Thank you, Member, for the question. The vast majority of our customers, about half recover within six months. About 84 percent recover within two years. The work that it takes in supporting claims in the new model is really on the front end. Then as customers’ needs that are going to be long-term are understood and established, it becomes ongoing payments that are less labour-intensive.

[12:30 p.m.]

It has been the biggest challenge working in two worlds, where the old system was very much busy on the back end. Our new enhanced-care model is front end: how do we help people on their path to recovery? If we do it well, they’ll be back to functioning as quickly as possible.

So as we look out over the next few years, ICBC as a whole is not expected to grow. The folks in enhanced-care recovery are no more than 1 to 2 percent

end, and our new enhanced care model is front end. How do we help people on their path to recovery? If we do it well, they’ll be back to function as quickly as possible.

As we look out over the next few years, ICBC as a whole is not expected to grow. The folks in enhanced care recovery are no more than 1 to 2 percent in any given year because the bulk of the work is for people in that first six months of their injury.

Janet Routledge: Thank you. This is a very informative, interesting presentation. The piece I’d like to pick up on is…. You referred to staff training and how staff training under the enhanced care model has shifted. I’d be interested to know more about the staff training.

I wrote down “empathy.” I think you referred to some other characteristics as well, but that was the one I wrote down. So I’d be interested to know. When you’re hiring, how do you assess someone’s potential to be empathetic? How do you train them, and how do you monitor it? I would think that they would absorb an awful lot of trauma from the people that they’re talking to.

Jason McDaniel: That’s absolutely true, Member. I’ll start high level. I’m going to pass over to my colleague to give you some of the very specific details on that question.

In our environment, we are focusing in two areas. Our new recruitment, new hiring, often has people with health-care-related backgrounds. We’re also giving folks that have committed careers to ICBC a chance to adjust and learn to the new model. So we are doing both. There’s how we recruit for new recruits and then how we retrain our staff that have moved over from the old system.

And you’re right about the emotional burden of the role. So maybe I’ll turn it to John Beesley to give some specifics.

John Beesley: Thanks for the question. And it’s a great question. When we established enhanced care, that was the imperative piece. How do we — to Jason’s point — make sure that everyone is on the same page?

We’ve developed a recovery learning team that has truly established cohort training. That’s for every new employee, whether they’re coming over from another area of ICBC or new to ICBC as well. Everybody goes through that training, and they have peer-to-peer mentorship to really get to understand that difference between transactional and transformational relationships with customers.

In addition, we’ve also done customer experience training. All 700 specialists that support our customers have gone through customer experience training and a year of customer experience reinforcement, establishing an understanding of how we actually put empathy in practice. Those are really important pieces to what ICBC’s overall strategy is with customer-driven support as well.

Janet Routledge: So you have an internal training program.

John Beesley: That’s correct. What we’ve done is brought in external consultants with the subject matter experts on what the right approach is in delivering that type of training and then how we relate it to ICBC and the customers they serve.

Steve Kooner: Have there ever been situations where benefits have been cut off by ICBC for victims under enhanced care and then, subsequently, those people that had benefits cut off visited the media and then their benefits were reactivated by ICBC? Have there ever been situations like that?

Jason McDaniel: Thanks for the question, Member. There have been situations where that has occurred. But if I gave some context…. Sometimes the media hear about the issue before senior leadership in the claims team has ever heard of the complaint.

There are internal escalation processes. And sometimes those internal escalation processes were not requested by a customer. ICBC does not, as policy, determine benefits based on who calls us. But what has happened is that more senior people become aware of the claim, and they apply a different layer of judgment. Unfortunately, they become aware of the claim after the media request.

[12:35 p.m.]

Steve Kooner: Just a follow-up to that. Under the new system, there are no lawyers involved. Do you think there’s a communication gap between people that are dealing directly with ICBC, now that they don’t have lawyers to advise them of what information they can actually get from ICBC, and that has led to some people going to the media?

Jason McDaniel: Well, I don’t know that. I would say, Member, if I were to do my best to answer the question, that lawyers are allowed to be involved in the new system. It isn’t as lucrative to be involved in the system for lawyers

advise them of what information they can actually get from ICBC and that has led to some people going to the media?

Jason McDaniel: Well, I don’t know that. I would say, Member, if I were to do my best to answer the question, that lawyers are allowed to be involved in the new system. It isn’t as lucrative to be involved in the system for lawyers now as it was in the old model, but lawyers are not forbidden to taking on the interest of customers.

There are other issues and disputes in our broader world that isn’t particularly lucrative that many lawyers take on. We have no issue with lawyers taking on battles on behalf of their customers if they think that’s right. It is a very expensive delivery of navigation support.

What we’re really looking at is what are other ways that are much more economical when people think they haven’t been able to properly articulate their needs, like the brain injury support program, like our customer support desk, other ways that can more efficiently and effectively get people the help they need without shifting back to a very expensive adversarial model.

George Chow: Thank you. Can you give an example without giving the details people actually took to the court to resolve some issues? We heard from the AG you could sue the carmakers, or if it was a criminal intent and that kind of stuff, perhaps. Since we came on to this enhanced model, that there are cases that people are going into the courts.

Jason McDaniel: There are a few open lawsuits that are related to whether or not there is a right to sue and seek compensation. In most of those cases, though, they’re not against an ICBC-insured, so ICBC is outside of the scope of that. Those examples in a criminal conviction case…. And there are examples. I know of at least one. Again, there is opportunity to get more detail, Member, on specifics, but there are examples of criminal cases.

There are also claims that, of course, aren’t directed at ICBC. The pub that over-served someone, the facility that didn’t fix someone’s brakes. We don’t have as much visibility to those types of claims. I don’t believe there have been very many of them, though. I think the concept is there are situations, if the goal is to have consequence, certain behaviours allow pursuit of those. Consequence means auto insurance doesn’t pay for it. That’s what consequence means. Some of those exist. We could provide a list of the lawsuits we know of. I’d be very happy to do so. It isn’t a long list, but they are there.

George Chow: Oh, one last question. Would ICBC pursue a lawsuit on behalf of its policyholder victims under the system now?

Jason McDaniel: Thanks, Member. There are two forms. In the event, say, for example, a vehicle manufacturer created a defective vehicle that led to injuries, both ICBC and the customer are able to pursue their costs recovered. ICBC can pursue what it’s paid in care and benefits treatment. The customer can pursue what they would want to recover as far as punitive damages or pain and suffering.

I haven’t yet encountered how we would combine those together in a single lawsuit is the true answer, but they would have to be combined so they both exist and if that situation arose we would work collaboratively with the customer in pursuit of those claims.

Brennan Day: I guess a lot of the feedback we’re getting from both recently retired claims adjusters from ICBC and victims is the dispute mechanism process with enhanced care. Could you just confirm how many injured people have filed disputes over enhanced-care benefit decisions? I guess the more important question is: how many of those disputes were actually successful? Because it’s one thing to have a complaint system that accepts complaints; it’s another to actually settle them appropriately so that everybody feels heard.

Jason McDaniel: Thank you for the question, Member. I can give you that information. I will note it is a bit of a, I would say a catch-22. If ICBC was wholly unsuccessful in the disputes, I think that would be a source of criticism, and if ICBC is successful in many of them, it arguably raises different questions.

[12:40 p.m.]

But 735 disputes, about 0.2 percent, so 1/5 of 1 percent of customers that have received benefits have filed disputes in enhanced care.

One thing about the Civil Resolution Tribunal is it has a facilitation stage and an opportunity to resolve claims. Many resolve amicably through the facilitation stage. We’ve had

135 disputes, about 0.2 percent, so 1/5 of 1 percent of customers that have received benefits have filed disputes in enhanced care. One thing about the Civil Resolution Tribunal is it has a facilitation stage and an opportunity to resolve claims. Many resolve amicably through the facilitation stage.

We’ve had 200 decisions. ICBC was sort of wholly successful in about half of them, 102. There were mixed results — as in some of ICBC’s position was accepted and some of the customer’s position was accepted — in 73 of them. In nine, about 5 percent, ICBC lost, so everything the customer sought, they succeeded. And then there were some that were sort of…. For failure to sort of finish the process, some files just didn’t get to the end. But those are the statistics I have.

Stephanie Higginson (Chair): Do you have a follow-up, MLA Day? Not another question, but a follow-up.

Brennan Day: Yeah, I do have a bit of a follow-up.

Does ICBC consider right now the onus to be reasonable and the access to be reasonable to that dispute tribunal? Or what recommendations and criticisms have ICBC been made aware of in that system that need improvement?

Jason McDaniel: Well, the recommendations we’ve seen are more focused on what I see as: how do we help people? I think people need more navigation skills. We want to provide what is owed in this system, and sometimes people need help to articulate that. That’s why our focus has been on the customer support desk. That’s why our focus has been on the partnership with the brain injury associations and making the online tools easier and the language and the other opportunities.

Civil Resolution Tribunal is designed to be accessible, without the need for a lawyer, but doesn’t forbid the use of a lawyer. I believe it is much faster and readily available for a person who doesn’t have a legal background than the court systems by many-fold. It is the best, most accessible system I know for resolving disputes without having to spend a lot of premium-payer money into the legal system.

Stephanie Higginson (Chair): Okay, I have a quick question in the case of out-of-province. What happens for a British Columbian who’s in another province with their B.C. vehicle or, vice versa, another out-of-province vehicle here, and they’re involved with a B.C. vehicle?

I think I know the answer, but I hear a lot about this, so I’m just wondering if you could walk me through it.

Jason McDaniel: British Columbians in their vehicles will have entitlement to enhanced care no matter where in North America they are.

Now, what they also do is they could be sued if they’re in a jurisdiction…. They are becoming fewer and fewer jurisdictions with lawsuits. Soon you’ll be able to drive to the Atlantic provinces and Ontario will be the only one you pass with lawsuits. But if you were to be in Ontario in an accident and sued, you still have liability coverage from ICBC for that instance. Brokers will encourage people, especially if they’re travelling, to make sure they buy the right amount of coverage.

But as far as injury protection goes, it is not limited to B.C. If you’re a B.C. resident in a B.C. vehicle, you will be covered no matter where you are in North America.

Jeremy Valeriote: Does that include Mexico?

Jason McDaniel: I remember…. I’m about 90 percent sure the answer is yes, but I’m going to take it away just to make sure I don’t give you a wrong answer on the record. But I believe it to be true for parts, but we’ll get back to you.

Brennan Day: I’m just noting from the slide deck that $1.9 billion in enhanced-care benefits have been paid out. How much of that was directly paid to injured people as income replacement or some sort of cash benefit?

Jason McDaniel: Sorry, I’m going to make a correction on my 90 percent. It does not include Mexico, Members. If I just circle back and answer that, we have a rapid team who has provided the answer. My apologies. Canada and the United States.

[12:45 p.m.]

Sorry, do we have the breakdown of…? I don’t have the breakdown of all of the categories for that right now. I believe we have it. But 96 percent is for the benefit of customers. That I can say. So it’s either payments to them for permanent impairment benefits or wage loss or death benefits or reimbursement of medical costs, medical equipment, care and recovery.

as I…. But 96 percent is for the benefit of customers, that I can say, so it’s either payments to them for permanent impairment benefit or wage loss or death benefits or reimbursement of medical costs, medical equipment, care and recovery. So 96 percent is the benefit of the customers, as I’m trying to give folks here the chance to find the breakdown because I know we have it. So, we…. Thank you.

Medical and rehabilitation costs to date is $1.232 billion. So that portion would be usually to providers. To customers, the permanent impairment benefit has been $122 million to date; death benefits, $92 million; funeral costs, $6.8 million; grief counselling, $1.7 million. And indemnities…. Income replacement, sorry, is $451 million. So it is roughly…. A third goes to the clients, and two-thirds goes to their health care providers — or medical equipment, anything that’s being reimbursed.

Stephanie Higginson (Chair): And there is further information on this on the supplementary information that was provided to us so there’s, in print, a bit of a more detailed breakdown there as well.

Do you have a follow-up, MLA Day?

Brennan Day: Sure, I guess, that the…. Along with that $1.9 billion, what is the estimated cost that ICBC saved in legal costs since enhanced care began, since that was sort of the purpose of enhanced care?

Jason McDaniel: Thank you, Member. It is significant, and then, if 96 percent of claims costs are now going directly to the customer, it’s at 4 percent. That is administrative costs and legal costs and things combined. But about 2 percent are related to legal costs now where….

You know, you have the numbers from the ministry this morning but those numbers were significantly higher. We were in the…. Overall, including claims that settled with no lawyers, it was in the low 80 percent. Of course, other files would be more like two-thirds to the customer and one-third to the lawyer, plus the legal dispute. So the drop is very significant.

Steve Kooner: Just a follow-up to MLA Day’s question there. So, was ICBC paying lawyers out directly for that 25 to 33 percent? How was that working?

Jason McDaniel: Thank you, Member. What we do is we keep track of a few things. They exist in what we call the blue book, which is the statement of financial accounts. And so we track how much goes to ICBC’s defence firms in a given year. That was about $250 million.

We also tracked how much was going in trust to plaintiff counsel firms per year for every law firm that received over $10 million in those checks. That number is over $2 billion at the top end on the biggest years. And as we said, which is, I believe, uncontroversial that lawyers’ fees from that is between 25 and 33 percent. So we know, and what I believe is a conservative estimate, that between a quarter and a third of that would ultimately go to the law firm. And then we have the amounts we paid to those law firms in the $200 million plus for costs and disbursements — not money that went to the lawyer but money that went to legal process.

When you combine all of those up, the conservative number, that doesn’t include our internal work, doesn’t include our in-house legal team, is about $1 billion a year.

Steve Kooner: Just to follow up to that, were any of the clients forced to get lawyers when they were going out to get lawyers? Was it the decision of the people that were dealing directly with ICBC?

Jason McDaniel: Member, I would say that getting a lawyer and a very large claim and paying the contingency fee in an adversarial system was not unwise. And I don’t believe the lawyers did anything wrong in retaining and advocating for their clients and taking the contingency fees in that adversarial system.

[12:50 p.m.]

I think everyone was making logical decisions and doing the jobs they should be doing in the model we had. It is just a model where premium payers have to pay a significant portion of their premiums towards legal costs but I cast no judgment on any of those decisions or any of those fees. It is the way to work in a model that’s built

was making logical decisions and doing the jobs they should be doing in the model we had.

It is just a model where premium payers have to pay a significant portion of their premiums towards legal costs, but I cast no judgment on any of those decisions or any of those fees. It is the way to work in a model that’s built on fighting instead of built on care.

Jeremy Valeriote: I’m just trying to anticipate what we’re going to hear in the coming months, and I’m hoping for a preview from your point of view. You mentioned that of the 200 decisions on disputes, ICBC was upheld in half. There are roughly 100 where there was a mixed result, or ICBC lost.

Maybe slightly weighted towards the ones that were lost, can you give us an idea of what categories or what the flavor of those is? And then I’m going to ask the same question for complaints that we’re likely to hear about later on in this committee.

Jason McDaniel: Of the ones filed, I don’t have a breakdown specifically into the ones we lost versus the ones we won. But of the disputes, about 28 percent are about wage-loss benefits, 30 percent health-care-related benefits and about 35 percent for permanent impairment compensation. Then they all get much smaller: caregiver benefits, 4 percent; death benefits, 1.6 percent; benefits for students, 1.3 percent. So that’s the nature of the disputes related to benefits, starting with the majority being the permanent impairment benefit, the health care and rehab benefits and the income replacement benefit.

Jeremy Valeriote: I’m going to ask the same question about…. Yeah, I’ll be frank. I haven’t had that many complaints come into my constituency office. It sounds like others maybe have a different one. Given the state of the Sea to Sky Highway, I’m surprised I haven’t heard more about this.

But I’m guessing we’re going to get submissions and appearances from people who have specific complaints and very case-specific….

Before we get into those weeds, I’m hoping to understand a bit from your perspective, what…. When I say flavor, I mean…. I appreciate the breakdown of what kind of benefits are in dispute here. But I’m wondering if you can give us a sense of what some of these complaints will be, will look like. I mean everything from outright fraud, which I’m sure you see, to a dispute over numbers, essentially, and wage loss. It sounds like there’s various ways that somebody might calculate their own wage.

But if you can give us, I would appreciate, on a general level, how many of those different types of things we’re about to see so that we can help to categorize them when we hear them.

Jason McDaniel: Thanks, Member. I’m going to start, and if my colleagues who are deeper in it day to day have anything to add, I will give them a chance. I think, at its core, people don’t really pay attention to what the auto insurance system is until they need it. So they will remember a system that resolved with a cheque. And our system is now about providing ongoing care and benefits as needed for as long as you need them. But it doesn’t resolve, especially for temporary injuries, with one lump sum payment.

I think if you were used to that as we’ve changed systems, there are definitely customers, maybe with or without a full context of what the old system used to look like, that want a cheque. And this system is about getting you back to health, not about reducing it to a single amount that guesses what you have needed and will need in the future and resolves it in one instance.

But I’d invite my friends here if they have anything to add to the nature of challenges. I think that’s the core of it.

Stephanie Higginson (Chair): I’ll just also remind the group that we have the opportunity after all of the submissions to bring folks back and ask their opinions on trends that we’re seeing. So that might be easier answered at that point.

[12:55 p.m.]

George Chow: I was curious about going in front of the Civil Resolution Tribunal. Who pays the costs? Like, for the victims, in terms of legal representation, expert witnesses, who pays for that cost, going forward?

the Civil Resolution Tribunal, who pays the cost, like for the victims, in terms of legal

representation, expert witnesses? Who pays for that cost going forward?

Jason McDaniel: Well, thank you, Member. As far as experts go, the nature of our system is it removes guessing the future. Even when you go to Civil Resolution Tribunal, it is about benefits needed today. As a result, direct medical evidence, as opposed to experts with opinions that are deciding what your pathway is in the future. So there’s far less availability of experts.

There is a limited amount of money that is available for experts. The legal fees themselves are not recoverable the system.

Paul Choi (Chair): Follow-up, MLA Chow?

George Chow: So the legal…. If someone were to represent herself or himself, I guess, then there are no fees involved, but if that person were to call for expert witnesses, who pays for that? The victims?

Jason McDaniel: There is an amount recoverable — as I look to my right and left for the amount recoverable for it. It is a set amount. I am just trying to get the number for you, but there is a specific amount that is recoverable.

We have to get back to you, Member. I apologize, but there is a defined amount in the regulations under the Civil Resolution Tribunal for how much is payable for expert witnesses. It’s a defined amount. Unfortunately, I don’t have the number at my fingertips. So I commit to getting that back to you and the committee.

George Chow: Sure. Only if the claimants are successful, right?

Jason McDaniel: Correct.

George Chow: Yeah. Okay, thanks.

Yeah, I’d like to hear about the amount. Thank you.

Brennan Day: Okay, so this one is going to need a little bit of a preamble, because I’m not quite sure how to ask the question.

In the previous system, I understand that it was possible to sue either the B.C. government or the private contractors for negligence in maintenance. We know that maintenance has dramatically declined over the last six years. We know budgets are constrained.

I’m just wondering what impact enhanced care has had on the ability to effectively rectify the Crown or Ministry of Transportation or their contractors, because it does seem like enhanced care takes away the ability to go after them. If you could just sort of explain how the operational negligence piece of road maintenance works and what that looks like.

It does seem like it’s a bit of a liability shield for government to actually do their proper maintenance of their system. So maybe some statistics in terms of what those lawsuits used to look like under the previous system and now what they look like under the current system.

Jason McDaniel: Thank you, Member. I think we will have imperfect information on this, because of the nature of it, but I will sort of do my best to tell you what I know.

There is a limitation with the shift to enhanced care on claims against road maintenance crews for negligent maintenance. I have no evidence. Crash rates per policy are pretty flat. I have no evidence or reason to believe that that shift has led to more collisions or more injuries. We don’t have any information to suggest that has changed.

Because those are claims not against an ICBC insured, I don’t have good baseline information on what those lawsuits were and how much they resolved for. A road maintenance crew or the province would not be insured by ICBC, per se, for those types of claims. So we have a bit of an absence of information.

That may be a question best for the Ministry of Attorney General.

Brennan Day: Okay. But to confirm, enhanced care does limit people’s ability to go after road maintenance as a mitigating factor in accidents.

[1:00 p.m.]

Jason McDaniel: Yes, Member, that’s true. It replaces it with enhanced-care benefits. So in the situation with the black ice, for example, and Amanda’s story.

What I would say is those benefits and those entitlements come without the need to determine whether or not that was someone’s fault. So what it’s replaced with is quick access to care and benefits and treatment without

with the black ice for example and Amanda’s story, what I would say is those benefits and those entitlements come without the need to determine whether or not that was someone’s fault. And what it’s replaced with is quick access to care and benefits and treatment without figuring out whether the issue was the result of negligence or not.

Brennan Day (Deputy Chair): That does seem like a bit of a problem, because it doesn’t hold one side of the ledger to account for potential negligence. I’ll just make that note.

Stephanie Higginson (Chair): Other questions?

Steve Kooner: Right now, under enhanced care, whether you’re at fault or not, you get benefits. I would like to know the amount of at-fault drivers that have currently received benefits. What’s their share? How much have they received — the individuals that have caused these accidents and now getting benefits? What has been paid to them, so far under enhanced care?

Jason McDaniel: Can I clarify, Member, do you mean even if no one’s at fault? Do you mean if you hit a moose on the road. Is that the category that you’re concerned about benefits being provided as well?

Steve Kooner: Yeah. For example, under the old system, they would have been denied a claim, right? Because they were at fault. But now, their claim gets accepted, and they are paid out enhanced-care benefits. To that degree, I would like to know how much has been paid out so far to those individuals that would not have been paid out prior to the system change.

Jason McDaniel: Thanks member. I would frame it slightly differently, because there’s no denial of benefits to customers in any situation. What would happen is…. Did they have someone to sue that had enough money or enough insurance to pay them? ICBC’s role in those cases was not as insurer for the person injured. It was as insurer for the person that caused the injury. So there was no difference in entitlement to first-party benefits from ICBC based on fault. The question was: did you have someone to sue that had enough money to pay you?

If it’s “how much are we paying in benefits to customers who wouldn’t have had someone to sue in the old system?”, we can take that away and try to come up with the number. We’ll look at it. It will probably take a little bit of work, but I think at least a round number is something we would be able to come up with, and we’ll provide that.

Stephanie Higginson (Chair): I’m just going to seek some clarity here, because I’m unfamiliar with this scenario that you’re describing, MLA Kooner. I think what I’m hearing — and feel free to correct me; maybe you’ll correct me — from you is, that under the previous system, somebody was at fault….

Let’s get blatant. Somebody drove recklessly and caused an accident. Whether they hurt somebody else or even if they were the only ones involved in the accident, I think what I’m hearing from you, MLA Kooner, is that, under the old system, they were not provided benefits to support their recovery, but in the new system, they are. Is that what you’re saying?

Steve Kooner: Well, I believe Mr. McDaniel was stating that under enhanced care and under the old system, there was a first-party insurance system, but in addition to that, there was a tort system. The tort system essentially allowed for individuals to claim what was outside of the first-party system. That’s where a lot of the benefits or compensation actually came for victims. So a lot of the people that would have caused those accidents, they would be entitled to first-party insurance, but there was only limited compensation that they could actually get under that.

Say, for example, somebody became a quadriplegic or something, and it was their fault. They drove recklessly. They had a habit of driving recklessly. They’ve been in ten accidents before. They caused another one. Under the old system, the system really looked at the actual driver, the conduct of the driver. But now, under the new system, regardless of the conduct, everybody’s entitled to the same benefits and the same amount of benefits.

[1:05 p.m.]

Jason McDaniel: If I could add a little further…. Thank you Member.

In the old system, most of your insurance went to protecting you from being sued, but a little bit went towards much more limited accident benefits. I mentioned it was $150,000 for medical and rehabilitation up to 2019, $300,000 after that

Jason McDaniel: If I can add a little further. In the old system, most of your insurance went to protecting you from being sued, but a little bit went towards much more limited accident benefits. I mentioned it was $150,000 for medical and rehabilitation up to 2019, $300,000 after that. Everybody, whether you made a mistake or not, could access that.

Now, the system also had people suing people, which became a source of compensation. ICBC’s role was taking care of the person that was at fault, not the person that was injured.

If you had no one to sue, that doesn’t necessarily mean you were reckless. It could be you just had no one to sue. You hit a pothole, and that pothole was no one’s fault. Or you hit a moose.

As the father of a young woman and young male drivers, I worry. How good is their judgment when they turn left at the yellow light before the oncoming traffic is coming? For all those situations, if you had no one to sue, your entitlement to care and benefits was much more restricted. We don’t do that.

Now, if you have a criminal conviction, there are some limitations on your entitlement to care and benefits. But driving is an inherently dangerous activity. People will make mistakes on the road. This system acknowledges that and shifts you buying insurance, much like your long-term disability coverage. I’m unaware of anyone being denied long-term disability coverage because they made a mistake. Our system compensates you even if you made a mistake and you got injured.

Stephanie Higginson (Chair): Okay, any more questions for our guests?

Steve Kooner: I was asking the Ministry of Attorney General earlier about ICBC profits and how that works. Now we’ve switched to a different model of enhanced care, and one aspect of changing was that it was supposed to bring savings.

My question to you is: what has been the profit coming from ICBC, and what happens to the profit? What happens? Does it get reinvested into new programs, or does it get held, or is some of that revenue given to the government? Like, how does all that work? Knowing that you probably have a better understanding of that, I’m going to pose that question to you.

Jason McDaniel: The money stays in ICBC. Now, when ICBC earns a profit in a given year, it is usually because, especially if it’s a large profit.... There are a lot of things you have to assume in a year. On the liability side, you’re assuming: how many collisions will there be? This ties sometimes to: what’s the weather going to be like this year? And of those collisions, how many people will be injured? How long will those injuries last? And how much will I pay for the rest of the lives for that group?

That’s what you pick in the given year on your liability side. On your assets, we have $18 billion in investments, and any change in the valuation of those assets shows up as income, in addition to how many people bought policies. So there’s always some uncertainty in predicting.

A 1 percent change in the valuation of our investments, for example, is about a $180 million swing. Sometimes when we earn a profit, it’s that our estimates for that given year are not exactly as we thought.

The real benefit of the system is not about the income. It’s about the maintaining of the rates. The income stays in the organization. Yes, it can be invested, but one of the ways it’s invested is truly invested, which means we get a return on investment which we assess and predict for future rate needs.

When you have a system that’s stable, that doesn’t have changes to those liabilities, you store it away because you realize litigation’s getting more expensive. I’ve got to add another billion to what we put away. When you have that kind of system, you end up with more capital. That capital is invested for the benefit of ratepayers, and it offsets future rate needs.

Brennan Day: When ICBC says that there is no limit, can you just confirm what that no limit means on approved care benefits? That doesn’t seem to limit.... That does seem to put a limit on compensation fairly heavily. It’s doing a lot of heavy lifting in your guys’ communications, and I understand why. But it doesn’t seem to fully compensate people for what an injured person has actually lost.

[1:10 p.m.]

I mean, in the Lapu-Lapu example that you used today, $20 million, even if you just divide it by the 11 victims who lost their lives, would be less than half a million dollars per life lost, which seems quite low, to be fair.

You say that if they had different coverage, it would be less. It just seems like it’s doing a lot of heavy lifting. So can you just

even if you just divide it by the 11 victims who lost their lives, that would be less than half a million dollars per life lost — which seems quite low, to be fair — and you say that if they had different coverage, it would be less. It just seems like it’s doing a lot of heavy lifting.

Can you just confirm that that means no limit on approved care benefits only? That, I think, needs to be clarified.

Jason McDaniel: Sure. Let me do my best with that number. There are some sub-limits in individual categories, but what happens is you don’t, over your lifetime, top out and then get no more benefits. So, for medical and rehabilitation expenses, medical equipment, there’s no limit where, once you’ve received a certain amount, for the rest of your life you won’t receive more.

There are limits, I mentioned, on wage loss. There is — which I know came up this morning with the Ministry of Attorney General — a separate payment for activities of daily living, which has a monthly maximum amount. So there are some sub-limits within the system.

I will say — and I welcome this committee in looking at compensation for fatality claims — that I think the question shouldn’t be about the lawsuit model versus this model, personally, but there may be opportunities to improve compensation. I don’t know the right amount for the loss of a loved one. The old lawsuit model, though — we should be under no illusion that it provided tons of money; it did not. It was also very limited.

On the question of, “Should it be more?” — and a lot of these claims involve children; I’m a father of four children — I don’t know what the right amount is to address the grief and pain you would feel, but I have no objection at all to challenges from this committee to raise that number. I think that’s a completely appropriate ask.

Brennan Day: I guess I’ll just follow up, then, since we’re sort of dealing with actuarial tables here. What was the average settlement for loss of life before enhanced care came in, and what is it now under enhanced care?

Jason McDaniel: Every scenario is a little different. When the head of a household is lost, the financial earner, under enhanced care, it can be up to $500,000 to the spouse — very similar to what might have been available in the old system.

Both under the old Family Compensation Act and under enhanced care, the loss of someone who is not a financial provider is limited. In many cases for ICBC, for loss of a child, to each parent, it’s in the neighbourhood of $20,000, plus grief counselling. In the old model — and I’ve looked into this — many claims in a similar world would settle in the $30,000-to-$90,000 range before the contingency fee was applied, and after, usually, many years. So they were in the same neighbourhood of one another.

That doesn’t mean they’re the right number. I don’t know what the right number is. It depends what the compensation is intended to provide. I think it is a completely appropriate area for further exploration.

Jeremy Valeriote: I’m just looking at the supplementary information, which is helpful. Slide 11 is titled: “Auto Insurance Costs Across Canada.” It’s actually not costs; it’s percentage change, which is valuable to see. I appreciate that this is the difference between the old system and enhanced care, but when it comes to the bottom line, it would be helpful.…

I mean, I could make it myself, but in some future, when you come back to us in the fall, the bottom line from slide 9 is the average premium. Given that it’s going to be a big part of the public’s interest, it would be helpful to have this in a graphical format, so that people can actually see.

[1:15 p.m.]

Then in that table there are a couple of questions. I figured out what “Mi” is under Ontario — I’m on the Ontario column, the medical and rehab line — a pretty minor thing, but is it $651,000, non–minor injury? Or does that “1K” mean something?

Jason McDaniel: Yeah, there’s minor injury. “Cat” is for catastrophic claims.

I think we could do a better job; I agree. We could come back with a better visual representation. I think the reason these two

or does that “IK” means something?

Jason McDaniel: Yeah, there’s minor injury. CAT is for catastrophic claims. I think we could do a better job. I agree, Member. We could come back with a better visual representation.

I think the reason these two slides, which are 8 and 9 in my numbers, complement one another is the average premium…. It’s difficult to assess because it depends on who you are. People pay very different premiums, but also it is the trending that is really relevant.

In Atlantic provinces, there are fewer cars to bang into, incomes are lower, and cars are older. Premiums as a base are lower as a result, but their annual year-over-year increases, their chunk out of people’s wallets, are on the uprise, where in the care models they are not. So I think they’re both relevant, the trending and the average rates. But I will take away a better way to show this and bring it back.

Stephanie Higginson (Chair): Follow-up?

Jeremy Valeriote: Yeah, just a follow-up.

Thank you for that. I appreciate that people would be mostly interested in how we compare to the rest of the country, given that we talked about North America and maybe not Mexico. But I’m wondering if there would be value, whether there’s apples-to-apples comparison of what somebody might pay in the United States and whether it varies. Well, it probably does vary state by state, but maybe some direct comparables like Washington state, California, Oregon.

Jason McDaniel: We could absolutely do that. I will preface that it isn’t apples to apples. What happens in most U.S. jurisdictions is…. I said most of your money went to protection from being sued. In many U.S. jurisdictions, you only have to hold in the neighbourhood of about $40,000 worth of protection. Our minimum is $200,000. The vast majority have at least $1 million in protection from being sued if you’re in a lawsuit-based system. So that does impact rates, but it also very meaningfully impacts your ability to claim against at-fault drivers.

But with some context, we’ll try to provide some of that information as well.

George Chow: Can you make any comments on dealing with cyclists? Of course, they don’t have insurance. Is there any difference under the enhanced system versus the old system?

The other question I have…. You mentioned investments. So ICBC carries cash reserves, and you invest the money yourself? Or is that given to an investment firm to look after?

Jason McDaniel: Sure. On the second question, ICBC’s investments are done through BCI, which holds for a lot of large organizations, WorkSafeBC. They have in the sort of hundreds of billions of dollars worth of assets that they manage for many very large pension funds and other organizations. All of that information is public and available and the return on investment is assessed and benchmarked.

Apologies, I’ve lost the first one.

George Chow: The vulnerable cyclists.

Jason McDaniel: Oh, for cyclists. Sorry, Member.

Yes, anybody injured and a car is involved is entitled to our enhanced-care benefits without assessing fault, so that’s what’s different. If a car is part of the interaction, then if you are a cyclist or a pedestrian, you’ll be entitled to the exact same benefits as everyone else.

We started a couple years ago. We received feedback. We weren’t doing as good a job as we could, so we’ve changed our process for facilitating claims for vulnerable road users, including cyclists, to make it an easier path.

Not everyone that’s cycling has a car or is familiar with ICBC, so right from when people first call into ICBC to tell us about it, we have created a faster path for them to get access to what they need, including, when the driver is at fault, getting them a new bicycle.

Brennan Day (Deputy Chair): Okay, I’ll just go back to the slide deck where it says that pre-approved treatments are available for the first 12 weeks and 92 percent of customers seeking treatment extensions beyond the first 12 weeks are approved. I’m just wondering what the reasoning and rationale is behind the 12 weeks and if you guys could provide some more information in terms of what the bell curve looks like for when those extension requests drop off.

[1:20 p.m.]

You mentioned two years most are fully resolved. Again, it seems like 12 weeks is relatively arbitrary. If you could just sort of give us some more detail on that.

Jason McDaniel: I mean, I think that’s a fair comment, Member, as far as why 12 weeks. But the reason we start out without any process is we want people to get in to get care as quickly as possible because we know that’s their

Again, it seems like 12 weeks is relatively arbitrary. If you could just sort of give us some more detail on that.

Jason McDaniel: I mean, I think that’s a fair comment, Member, as far as why 12 weeks. But the reason we start out without any process is we want people to get in to get care as quickly as possible because we know that’s their best path to health faster. Ultimately, some treatments may stop. They may do no harm, but they may not be the best path towards recovery to function.

And so we’ve chosen 12 weeks as the time when we want articulation. Why do you need more chiropractic treatments? What are your recovery goals from getting more chiropractic treatments? What do you expect to be the outcome? And as that evidence continues to support recovery and that there were goals and that after doing more treatment, those goals were achieved and there’s a new set of goals, then approval usually follows.

I’ll ask my colleague if he wants to add any detail.

John Beesley: We can certainly come back with that bell curve that you mentioned, MLA Day. But the process is reliant on the health care provider providing that information on what is recommended or what is needed for that further functional recovery. And that is truly what we’re trying to support — the benefit decision that is directed by the health care provider.

Now, the 92 percent you just referenced is a high number because it is reliant on the health care provider knowing that we need additional treatment. As that goes on and if functional progress isn’t happening, then we look at…. Okay, what are some of the alternative recovery options for the customer to…? We’re always working with the health care providers for that recovery pathway.

Brennan Day (Deputy Chair): Okay. I guess just a quick follow-up then. Could you just go into what the medical background of the people making the determination on those files is — what the minimum educational standard is? Obviously, if a doctor issues a report to your team and somebody’s denying it, we want to make sure that person’s not denying it. And who would be on the hook, then, if ICBC turns it down?

And I guess the next obvious question to that line of thinking is: how many of those go to dispute resolution when there is a dispute between the injured individual’s medical practitioner and ICBC? How does that get resolved?

Jason McDaniel: Thanks, Member. I’ll start and then pass back to John Beasley to give you more detail.

ICBC does not make medical determinations. We’re not qualified to make medical determinations, and we do not. So the question for those that are qualified is: can you articulate…? Not just, so to say: “I want to give them ten more treatments.” We would ask: “Can you tell us what your recovery goals and expectations are from ten more treatments?”

We don’t say that it won’t work; that’s not our job. And this is where I’ll turn over to John to give you more detail. We have access to medical support if we need it, but our staff are not expected and not qualified to make medical decisions about care and recovery.

John Beesley: To that point, we have a clinical advisory group. This group is made up of health care practitioners that are currently and actively practising in the community. They provide medical expertise or recommendations based on questions that our recovery specialist may have with the recovery of a customer.

Now, if there’s a conversation that is also needed with a health care provider, these clinical advisors can also have those peer-to-peer discussions. They include family physicians, chiropractors, acupuncturists, physiotherapists and the whole sort of treatment modalities to help support both the customers and our recovery specialists to make sure we’re making the right benefit decision.

Brennan Day (Deputy Chair): Okay, so I hear a little bit of a differing there. You said you don’t have any medical…. You don’t make medical decisions, but you do have a medical advisory board.

I guess I’ll go back to the question then. Of the 92 percent of customers that get the extension, what is the percentage of those customers that end up being denied coverage ongoing? Again, it would be great to see it in a graph. When does it get cut off?

[1:25 p.m.]

Because we are sort of second-guessing the primary care providers’ clinical knowledge. I think that’s worthy of our committee having a little further discussion to see if that’s being adequately done. I’m sure we’ll hear that from people that are coming forward with complaints, right? Because they’d be the outliers.

sort of second-guessing the primary care providers’ clinical knowledge.

I think that’s worthy of our committee having a little further discussion to see if that’s being adequately done. And I’m sure we’ll hear that from people that are coming forward with complaints, right? Because they’d be the outliers. I know the success rate looks pretty well, but I mean, this system has to deal with the outliers as well.

Stephanie Higginson (Chair): Just before you answer it, I just want to remind our members that I’m not sure that it’s our job yet to presuppose the problems that we’re going to hear. I appreciate the line of questioning. I see its relevance to section 11, but I’m not sure that it’s our job to presuppose the issues that we’re going to hear, but that these folks are available to come back to us after we have heard from people and have identified trends and have developed questions on what we need to hear.

So just noting the questions and the line of questioning, I want to remind folks of that.

I’ll turn it back over to you to answer.

Jason McDaniel: You know, I would say…. If I backed up just on the to make sure there’s consistency, our claims specialists, the people you call and the people who are assigned to your files that work directly with our customers, are not making medical determinations. They have access…. It’s not access on the majority of files. They have access to that clinical advisory group if they need further clarity on whether or not more treatment is likely to support care and recovery and then usually have the medical professionals talk to each other and see if they can’t come to the same page.

But in our business, that’s not what we do. I understand the question of what happens to that 8 percent, and we will endeavour to get you the best answer we can to that question.

Stephanie Higginson (Chair): Okay. Further questions?

Steve Kooner: On this graph here of page 8 of these tables, it states the average premium in 2023 was $1,200. This is under the enhanced-care model. What was the average premium prior to the enhanced-care model?

Jason McDaniel: It was approaching $1,800, Member. As I said, the total premiums dropped at that time, following the shift, by 28 percent. Basic hasn’t changed since. There have been some increases in optional, but we are still, as you can see, even today, cheaper than we were six years ago.

Stephanie Higginson (Chair): Any further questions?

Okay. With that, then, I will thank our presenters for your time, your thorough answers and your willingness to continue to provide information and work constructively with the committee throughout our review. I appreciate your enthusiasm for the review and your connection to how the review can help you be better and do better.

We look forward to that opportunity to work with you, and I am certain that once we have heard from the public and gone through those submissions, we will be asking for further information from you.

Thank you for the time today.

For the committee, this concludes our business. I’m going to seek a motion to adjourn.

Motion approved.

The committee adjourned at 1:28 p.m.