A financial foul-up that's going to cost the Insurance Corporation of B.C. $110 million will be resolved within 90 days, says a release by the Crown corp. on Sunday.
The release came after The Province revealed the accounting mix-up, in which some customers were overcharged for optional insurance while others didn t pay enough.
ICBC didn鈥檛 respond Saturday to queries about the error. But on Sunday, corp. CEO Mark Blucher pointed the finger at a 40-year-old computer system, where errors could be made in identifying the proper trim level of a vehicle.
While 95 per cent of vehicles were correctly identified, errors were made with the others. Blucher admitted ICBC doesn t know how long the errors have been piling up, because there are only six years of computer records. The rest have been purged.
鈥淲e鈥檙e committed to going back as far as we can accurately 鈥� and that鈥檚 six years,鈥� said Blucher.
ICBC got approval to update its computer system in 2008 and has slowly been doing so, with a target completion date of 2015 and a price tag of $400 million.
Vehicle identification number decoders will be in place by July to eliminate misidentifying vehicles.
Blucher said the problem became apparent in 2013 as part of the computer update. But it was understood to be an issue as far back as 2010.
鈥淚t鈥檚 taken us some time to discover the size and complexity and scale of this issue,鈥� he said.
Transportation Minister Todd Stone was finally told about the problem in late February. But then the situation was uncovered through an anonymous tip to The Province.
鈥淚 am as angry as I expect British Columbians to be over this operational error at ICBC, which for the past six years has been overcharging some customers and undercharging other customers for optional insurance,鈥澛� Stone said in a statement. 鈥淭his is not acceptable ... "
Blucher defended the decision to delay informing the public until there was a plan for a fix and a repayment program. But Mabel Elmore, the NDP s critic for ICBC, expected more from Stone.
鈥淭he question that arises is why the transportation minister kept this secret for over a month when he knew about this information,鈥澛� said Elmore, the MLA for 91原创 Kensington. 鈥淲hy did he hide it until he got a question from the media?鈥�
The $110 million is made up of $36 million that Stone has said ICBC must repay to overcharged customers, plus $3 million in interest, along with $71 million it has undercharged and will not recoup.
In addition, it will cost ICBC some $4 million to address the problem, including manually reviewing 18 million transactions to calculate the refund. The $4-million estimate includes everything from extra staff time to postage for mailing out refunds.
Customers who overpaid will get their money back, with the average annual overpayment being $21. Interest will also be paid, with refunds expected to arrive in July.
The average underpayment per year was $34, but people who didn鈥檛 fork out enough won鈥檛 be billed for the error.
Car shoppers at the Richmond Auto Mall Sunday were surprised to hear how long it took for ICBC to discover the error.
鈥淚t looks as if the auditors have missed this for six years,鈥� said Julio Bello of Burnaby, comparison shopping a Honda Civic and a Mercedes B200. 鈥淢y concern would be that for six years somebody has turned a blind eye ... Where is the quality control?鈥�
Surrey鈥檚 Dilbar Mahal, checking out an Infiniti convertible, wonders if he鈥檚 been overcharged.
鈥淚 have 20 years聽 experience, with no accidents, but I still pay over $2,000 (a year for insurance),鈥澛� said Mahal. 鈥淚t doesn t look very good.鈥�
Des Balakrishnan of 91原创, tire-kicking an Audi SUV, said in the grand scheme of things it鈥檚 not a big amount.
鈥淚t鈥檚 not huge,鈥澛� said the owner of three vehicles and a motorbike. 鈥淚f it鈥檚 $20 on an average of $1,500 a year, I guess it happens.鈥�
