ICBC criticized over delayed response to database snafu

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One hundred staff with the B.C. auto-insurance corporation have been working in secret for the past five months to fix and assess the damage caused by a database error that has incorrectly billed thousands of customers over the past six years.

Mark Blucher, the president of the Insurance Corporation of B.C., said in an interview Monday that the plan was to tell customers in July – once ICBC could provide specific figures about the situation as opposed to speculation.

But while ICBC quietly worked away on the issue, someone talked to a B.C. newspaper, resulting in a weekend report that forced ICBC to open up. ICBC officials said they do not know if that person was an ICBC staff person.

"On balance," Mr. Blucher said of the July target, "we feel that was a better decision for us to have taken because customers wouldn't have the anxiety and concern that we find ourselves now in, where they don't know if they are one of the affected customers."

As it is, ICBC is working up a website that will allow customers to instantly determine if they have been affected.

Mable Elmore, the NDP opposition ICBC critic, said ICBC and Transportation Minister Todd Stone, who was told about the matter in February but kept it under wraps, should have come clean on the matter. "We expect to be informed of what's happening at ICBC in a timely manner," she said.

But on Monday ICBC defended the decision to keep the issue quiet for months, saying the approach was designed to fully develop a ready-to-go response once they broke the news about the $110-million error that saw 240,000 optional-insurance customers overcharged by $21 a year on premiums over the past six years, and 350,000 undercharged by $34 a year.

The company says 95.5 per cent of clients will not be affected. But 2.7 per cent will have been paying too little, while 1.8 per cent will have been paying too much. Refunds to overcharged customers will cost a total $36-million, plus $3-million in interest. The cost of underpayments is $71-million.

There's also a $4-million cost for staff and other costs to manage and resolve the problem.

Mr. Blucher said they're not "insubstantial numbers," but won't hurt in light of $3.9-billion in premiums collected in 2012 – with claims of more than $3-billion. "We've been able to absorb these costs into the company without affecting the financial position of the company to any real degree," he said.

Communications vice-president Steve Crombie said Monday that the team trying to assess and fix the problem in the new ICBC computer system was in place in mid-December, but took six weeks to understand the scale of the error.

"We made the deliberate decision to wait until we had the full picture and the solution in place before distressing our customers any more than they need to be distressed," said Mr. Crombie, also in charge of customer relations.

"The difficulty we had was not knowing the scope [of the problem]. Even when we started to better understand the scope towards the end of January, we still didn't have the number of people affected. We didn't have the dollar amount. We were still working through that and decided we wouldn't be able to tell customers very much. All we'd be able to do was say, 'We've uncovered this problem. We don't really understand the problem fully and can't really tell you what the impact is going to be.'"

Mr. Stone was unavailable for comment Monday, but said in a weekend statement he was "angry" about the matter and expected ICBC to fix the problem without adjusting rates, and have an outside auditor assess the matter.

ICBC officials were wary about calling the situation a secret, although it was only just disclosed to the media. Mr. Blucher said there have been open discussions with ICBC's governance committee, its board, the provincial government and its external auditors. "We've certainly involved and communicated with a lot of people," he said.

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