ICBC to mail out $38 million in refunds for overcharges
ICBC is preparing to mail out 309,000 refund cheques ranging from $1 to $350 to optional auto insurance customers it overcharged since 2008.
Wrong rates were used because of incorrect descriptions assigned years ago to many vehicles that are only now being fixed.
The average customer who overpaid all six years will get a refund of around $108, ICBC spokesman Adam Grossman said. The cheques will begin to go out around Aug. 20.
The average overpayment was $18 per year.
The refunds plus interest being paid total nearly $38 million.
Nearly 370,000 other motorists were undercharged because of the glitches.
ICBC won't go after them for the $53 million in lost revenue.
The faulty vehicle descriptions affected only optional insurance, not basic rates.
The refunds were calculated as part of two independent external reviews that checked millions of insurance transactions over the past six years.
Auditors who examined ICBC's handling of the issue concluded ICBC knew the problem was systemic as early as 2009 but management hid it from ICBC's board of directors until mid-2013.
Various fixes were contemplated but discarded, according to the auditors' report.
ICBC managers feared a solution might harm its relationship with brokers and that disclosure of inaccurate pricing would hurt ICBC's business position against optional insurance competitors.
The corporation ultimately opted to fix the errors and issue refunds as part of its sweeping $400-million technology upgrade program.
The long-running overcharges were finally made public in April by Transportation Minister Todd Stone – only after he was directly questioned by the media.
ICBC's board had intended to wait until it had a refund strategy ready to roll out.
Customers renewing their auto insurance since July have been required to update their vehicle's descriptions, Grossman said.
The error isn't expected to recur because ICBC's modernized system will pull the correct description from the vehicle identification numbers, instead of being entered manually by Autoplan agents.