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1 Information Request No..1 RR BCCA.BI.1.a-b Dated 04 May 16 March Insurance Corporation of British Columbia B RR BCCA.BI.1.a-b Reference: Page 5-2, paragraph 6, the first bullet point refers to "An increase in the general damages and future wage loss payments. 1.a To what extent are general damages increasing because bodily injury claimants are experiencing more pain and suffering or longer periods of pain and suffering caused by the injuries suffered in motor vehicle accidents? 1.b To what extent are future wage loss payments increasing because bodily injury claimants are not recovering as fully or as fast as they did previously, therefore their future disability is greater or their period of disability is longer? General damages do not equate to an empirical measure of pain and suffering. General damages include a combination of factors, such as the type of injury presented, court precedents and the individual characteristics of the claimant, as well as compensation for pain and suffering. One cannot accurately measure pain and suffering and therefore it is not possible to comment on whether increased general damages are as a result of claimants experiencing more or longer periods of pain and suffering. Future wage loss payments, as referenced in page 5-2 paragraph 6, refers to payments made to compensate a claimant for the loss of earning capacity that may occur in the future. This head of damage is not a strict mathematical calculation and requires an assessment of what might occur in the future. The assessment of this head of damage involves a number of factors, such as the individual characteristics and circumstances of the claimant, many of which are not necessarily dependant on the length of recovery or period of disability, as well as the length of recovery or period of disability. Therefore ICBC cannot comment on the extent to which recovery and or length of disability impacts future wage loss payments.

2 Information Request No..1 RR BCCA.BI.1.c Dated 04 May 16 March Insurance Corporation of British Columbia.1 RR BCCA.BI.1.c Reference: Page 5-2, paragraph 6, the first bullet point refers to "An increase in the general damages and future wage loss payments. To what extent has ICBC attempted to relate its increasing damages payments and claims costs to the state of health and recovery of bodily injury claimants? As set out in the response to information request.1 RR BCCA.BI.1.a-b, general damages are driven by a variety of factors. Although ICBC recognizes that a claimant s state of health immediately before an injury, during their recovery and subsequent to their recovery, will influence the assessment of damages, ICBC is unable to statistically correlate increasing damages payments and claims costs to the state of health of the claimant and recovery of bodily injury claimants or to attribute increases proportionally to health and recovery status.

3 Information Request No..1 RR BCCA.BI.1.d Dated 04 May 16 March Insurance Corporation of British Columbia.1 RR BCCA.BI.1.d Reference: Page 5-2, paragraph 6, the first bullet point refers to "An increase in the general damages and future wage loss payments. Do the increased damage awards relate at all to difficulty in access to treatment or delay in treatment? It is not ICBC s policy to direct treatments for injured claimants. Claimants arrange for and undertake whatever treatment they and their medical advisors deem necessary. As a result, ICBC is not aware of any difficulty or delay experienced by injured claimants in accessing treatment.

4 Information Request No..1 RR BCCA.BI.2 Dated 04 May 16 March Insurance Corporation of British Columbia.1 RR BCCA.BI.2 Reference: Page 5-2, paragraph 6, the third bullet point refers to "an increase in claim complexity represented by factors such as treatments. ICBC does not elaborate on the "treatments to which it refers. Please provide some detailed information on the "treatments to which reference is made and the context in which the "treatments have been analyzed. Please produce whatever statistical analysis has been done on "treatments to support the assertion made in this bullet point. ICBC s conclusion that an increase in claims complexity is contributing to the increase in bodily injury claims costs is based on a number of factors, including the increase in the percentage of closed bodily injury exposures where the claimant received ten or more treatments. For this analysis, treatments by general practitioners, physiotherapists and chiropractors were counted on bodily injury exposures closed in the years 2003, 2004 and Treatments by specialist doctors, massage therapists and others were not included. The increasing trend is seen from the following: Close Year % Closed Bodily Injury Exposures with More than ten Treatments % % %

5 Information Request No..1 RR BCCA.BI.3.a Dated 04 May 16 March Insurance Corporation of British Columbia.1 RR BCCA.BI.3.a Reference: Page 5-2, paragraph 6, the third bullet point also refers to the "increased need for medical specialists/experts as a factor in an increase in claim complexity. To what does ICBC attribute the increased need for medical specialists/experts? While ICBC has not conducted specific analysis on the reasons for the increase, ICBC s observations based on the file reviews that have been conducted in 2006 and are that the following reasons have contributed to the increased need for medical specialists/experts: More claims with chronic injury allegations being presented. Difficulty in isolating, assessing and attributing which complaints and or injuries are results of the motor vehicle accident and which pre-dated the motor vehicle accident. Shifting demographics (aging) of the population. Lack of consistent medical documentation (more claimants have multiple practitioners managing their medical treatment due in part to greater use of walk-in clinics as the primary care givers). The need for medical specialists/experts arises from ICBC s duty to defend claims made against its insureds third party liability policy. ICBC s duty to defend means that it may need, depending on the specific facts of an individual claim, to arrange medical examination or reviews of medical records and reports in order to properly evaluate the claims that are being made against the insureds third party liability policy.

6 Information Request No..1 RR BCCA.BI.3.b Dated 04 May 16 March Insurance Corporation of British Columbia Page 1 of 2.1 RR BCCA.BI.3.b Reference: Page 5-2, paragraph 6, the third bullet point also refers to the "increased need for medical specialists/experts as a factor in an increase in claim complexity. Please provide information on the frequency with which ICBC uses medical specialists/experts. That is, in what percentage of bodily injury claims both generally and specifically in claims with a value less than $40,000. In claims less than $40,000 please identify the type of specialists/experts ICBC chooses and indicate the relative frequency of use for each type of specialist as a percentage of the whole. ICBC uses medical specialists and experts to assist in the assessment of injury claims. ICBC s current data capture for payments related to medical reports does not distinguish medical reports obtained by the claimant or their counsel from those medical reports, reviews and consultations obtained by ICBC. As a result, ICBC is unable to precisely determine the percentage of claims on which it retains independent specialists and experts. ICBC is able to provide a count of the number of exposures closed in 2006 for which payment was made for medical reports (the payments may represent one or more medical reports) obtained by the claimant or their counsel and ICBC which is set out in Figure 1. This information does not include payments made to the claimant s counsel for disbursements related to medical reports obtained by the claimant or payments made to defence counsel for disbursements related to medical reports. ICBC is unable to distinguish the different types of disbursement payments. Figure 1 Incurred Dollar Range Bodily Injury Exposures Closed in 2006 Number with Medical Report Payment % of Bodily Injury Exposures with Medical Report Payment $0 to $40,000 39,328 9,745 25% Over $40,000 4,343 2,607 60% Total Exposures 43,671 12,352 28% ICBC may retain orthopedic specialists, psychologists, psychiatrists, neurologists, general practitioners and other specialists/experts as required for the nature of the claim presented.

7 Information Request No..1 RR BCCA.BI.3.b Dated 04 May 16 March Insurance Corporation of British Columbia Page 2 of 2 ICBC is not able to identify from the data the frequency with which each type of medical specialist/expert is retained.

8 Information Request No..1 RR BCCA.BI.3.c Dated 04 May 16 March Insurance Corporation of British Columbia.1 RR BCCA.BI.3.c Reference: Page 5-2, paragraph 6, the third bullet point also refers to the "increased need for medical specialists/experts as a factor in an increase in claim complexity. What is ICBC s process and criteria for its selection of ICBC specialists/experts? ICBC uses medical specialists/experts to assist in the assessment of injury claims, and not for treatment purposes. The type of medical specialist or expert selected depends on the individual issues of a particular claim file and the risk the claim file represents. Adjusters have authority to retain a specialist/expert, but selection may require a discussion with either a claims examiner or manager to obtain approval before an expert is chosen and retained. The selection of a specialist/expert may also occur in consultation between the adjuster and defence counsel.

9 Information Request No..1 RR BCCA.BI.4.a-b Dated 04 May 16 March Insurance Corporation of British Columbia.1 RR BCCA.BI.4.a-b Reference: Page 5-4, paragraph 11, refers to reducing the overall time that a claim is open. 4.a Is the length of time that files are open increasing? If so, present the data supporting this conclusion. 4.b If so, to what does ICBC attribute the lengthening time that claims are open? For the purposes of ICBC s investigation of the underlying causes of the increase in the bodily injury claims costs referenced in paragraph 6 on page 5-2 of Chapter 5 of the Revenue Requirements Application, ICBC analyzed file open time data for the years 2003 to The results of that analysis is set out below and is based on average number of days open for exposures closed in the year: Year Average Days Open However, in mid-2006 ICBC introduced claims handling initiatives that included greater focus on bodily injury claims with early indication that these initiatives have resulted in a higher claim closure rate in 2006 and a reduction in pending claims and claim open time (as described in paragraph 29 on page 5-11 of Chapter 5 of the Revenue Requirements Application). ICBC does not have any analysis as to the causes of the increase in file open time between 2003 and 2005.

10 Information Request No..1 RR BCCA.BI.5.a Dated 04 May 16 March Insurance Corporation of British Columbia.1 RR BCCA.BI.5.a Reference: Page 5-4, paragraph 12, the third bullet refers to the "Official Disability Guidelines. Please produce a copy of the Official Disability Guidelines ("ODG ) that will apply to consumers? The Official Disability Guidelines are a web-based application accessible by subscription. Reproduction of the Official Disability Guidelines would violate the licensing agreement. Information about the Official Disability Guidelines is available at the Work Loss Data Institute website at

11 Information Request No..1 RR BCCA.BI.5.b Dated 04 May 16 March Insurance Corporation of British Columbia.1 RR BCCA.BI.5.b Reference: Page 5-4, paragraph 12, the third bullet refers to the "Official Disability Guidelines. What is the Work Loss Data Institute? Where is it based? Who does it represent and how is it compensated? What is the source of origin for the data upon which it relies? The Work Loss Data Institute is an independent database development company focused on workplace health and productivity with offices in California and Texas. ICBC is not able to respond on behalf of the Work Loss Data Institute as to who they represent and how they are compensated, but the intervenor can access information about the Work Loss Data Institute at Please see the response to information request.1 RR BCCA.BI.5.c with respect to the origin of data.

12 Information Request No..1 RR BCCA.BI.5.c Dated 04 May 16 March Insurance Corporation of British Columbia.1 RR BCCA.BI.5.c Reference: Page 5-4, paragraph 12, the third bullet refers to the "Official Disability Guidelines. Please explain how the ODG can be truly applicable to Whiplash Associated Disorder ("WAD ) when the guidelines are primarily created from workplace injuries and work loss data and not motor vehicle accidents? The Work Loss Data Institute confirms that the Official Disability Guidelines were based on over 10 million cases reported to the Center for Disease Control (U.S.) and the Occupational Safety and Health Administration (U.S). Although the Occupational Safety and Health Administration information pertains mainly to occupational injury or sickness, the Center for Disease Control information covers non-occupational cases that include injuries from auto crashes. The proportion between occupational and auto-crash injuries depends significantly on the specific medical condition. The Work Loss Data Institute estimates that more than 50% of the whiplash injuries considered were a result of auto crashes. The Work Loss Data Institute s Official Disability Guidelines are widely used by U.S. property and casualty insurers, primarily in the realm of automobile and workers compensation insurance. The Work Loss Data Institute s client list includes such major insurance companies as: AIG, Allstate, GEICO, Liberty Mutual and State Farm.

13 Information Request No..1 RR BCCA.BI.5.d Dated 04 May 16 March Insurance Corporation of British Columbia.1 RR BCCA.BI.5.d Reference: Page 5-4, paragraph 12, the third bullet refers to the "Official Disability Guidelines. What other source of guideline or equivalent information did ICBC consider besides the Work Loss Data Institute. ICBC considered published reviews of various disability duration guidelines that are available commercially. Published reviews considered included: The Journal of Workers Compensation, Vol.10, No.4, Summer 2001 Disability Medicine, The Official Periodical of the American Board of Independent Medical Examiners, Vol.2, No.3, July September 2002 California Workers Compensation Enquirer (CWCE) Magazine, August The disability duration guidelines and the published reviews were US-based. ICBC is not aware of any Canadian disability duration guidelines, other than those developed by provincial workers compensation boards for their own use.

14 Information Request No..1 RR BCCA.BI.5.e Dated 04 May 16 March Insurance Corporation of British Columbia.1 RR BCCA.BI.5.e Reference: Page 5-4, paragraph 12, the third bullet refers to the "Official Disability Guidelines. In relation to managing WAD, what were the criteria that caused ICBC to choose to purchase the Work Loss Data Institute s information? How much has ICBC paid or will pay to use the ODG? Access for ICBC staff is US$10,017 per year. When the Official Disability Guidelines are introduced to physicians this year, the cost will be US$47,700 per year inclusive of ICBC access.

15 Information Request No..1 RR BCCA.BI.5.f Dated 04 May 16 March Insurance Corporation of British Columbia.1 RR BCCA.BI.5.f Reference: Page 5-4, paragraph 12, the third bullet refers to the "Official Disability Guidelines. What measures does ICBC have in place to assess the effectiveness of the ODG? The Official Disability Guidelines are reference materials that are used by ICBC claims handlers as a benchmarking resource with regard to medical case management, treatment plans and disability. The Official Disability Guidelines assist adjusters in communicating with primary care physicians and other health care practitioners who treat ICBC injured claimants. The effectiveness of the Official Disability Guidelines, as a resource for ICBC s adjusters, is assessed on the basis of the frequency of use (web-site hits ) and anecdotal feedback from adjusters and from the treating health care providers such as primary care physicians, chiropractors, and physiotherapists.

16 Information Request No..1 RR BCCA.BI.6 Dated 04 May 16 March Insurance Corporation of British Columbia.1 RR BCCA.BI.6 Reference: Page 5-5, paragraph 12, the fifth bullet refers to increasing the overall skill level of adjusters. With ICBC enhancing adjuster training, how will ICBC ensure that adjusters are appropriately trained to co-ordinate or provide input or direction on "treatment options described in the ODG? It is not ICBC s policy to direct care. The medical management of the file rests with the health care providers who are treating the injured claimant. Adjusters receive basic training on the Official Disability Guidelines with respect to its use as a benchmarking and communication tool.

17 Information Request No..1 RR BCCA.BI.7 Dated 04 May 16 March Insurance Corporation of British Columbia.1 RR BCCA.BI.7 Reference: Page 5-5, paragraph 13, What skills will Litigation Centre staff possess which enables them to better handle highrisk/high-complexity claims? The Litigation Centre employees went through a rigorous hiring process that identified employees with a proven track record of success in their current position. ICBC specifically looked for employees who demonstrated superior ability in the following categories: technical knowledge relating to bodily injury claims, including all relevant legislation and regulations relating to bodily injury claims and the Supreme Court Rules, analytical and problem solving skills, organizational skills, leadership abilities, communication and interpersonal skills, skills in influence and persuasion and relationship management skills.

18 Information Request No..1 RR BCCA.PM.1.a Dated 04 May 16 March Insurance Corporation of British Columbia.1 RR BCCA.PM.1.a Reference: Page 8-7 and 8-8, Figures 8.4 and 8.5 reflect that ICBC receives its lowest Claims Services Satisfaction scores in "fairness and "kept informed in both tort and accident benefit claims. What steps has ICBC taken to identify the reasons for its low scores in "fairness and "kept informed? As part of the customer satisfaction surveys, ICBC collects customer feedback and detailed comments on specific service attributes. In addition to this customer feedback, ICBC has collected feedback from employees on service.

19 Information Request No..1 RR BCCA.PM.1.b Dated 04 May 16 March Insurance Corporation of British Columbia.1 RR BCCA.PM.1.b Reference: Page 8-7 and 8-8, Figures 8.4 and 8.5 reflect that ICBC receives its lowest Claims Services Satisfaction scores in "fairness and "kept informed in both tort and accident benefit claims. Is ICBC able to identify why customers perceive ICBC to be performing worse in the context of "fairness and "kept informed. ICBC understands this question to mean that fairness and kept informed receive the lowest satisfaction results in comparison to the other attributes underlying the claims services satisfaction and accident benefit only satisfaction measures. Through the specific customer surveys, feedback, customer complaint tracking and ad hoc customer focus groups, ICBC is able to identify many of the reasons why these two attributes perform lower than other service attributes. Please see the response to information request.1 RR BCUC for additional information on steps taken to improve performance in keeping the customer informed.

20 Information Request No..1 RR BCCA.PM.2 Dated 04 May 16 March Insurance Corporation of British Columbia.1 RR BCCA.PM.2 Reference: Page 8-10, Figure 8.8 Customer Approval Index reflects what appears to be a uniformly poor score on the public perception of ICBC. Please amplify the reasoning for not setting a corporate target for the customer approval index. If ICBC is attempting to "develop communications that promote informed opinions and a better understanding of the value of ICBC (as stated on page 8-9), then is it not appropriate to have a corporate target? What approval index score does ICBC consider to be acceptable? ICBC does not set a corporate target for the customer approval index survey as it is a directional indicator only of public perception and not a performance measure, with information from that indicator being used to better understand public perception. Targets are not set for indicators, as there is no goal associated with a directional indicator.

21 Information Request No..1 RR BCCA.PM.3.a Dated 04 May 16 March Insurance Corporation of British Columbia.1 RR BCCA.PM.3.a Reference: Page 8-10, Legal Representation Rate. What are the Legal Representation Rates for claims with a value under $40,000 for each of 2004, 2005, and 2006? The legal representation rate, as described on page 8-10 in Chapter 8 of the Revenue Requirements Application, is a ratio of Y indicators (a yes or no field to indicate whether a file is represented) to the number of newly opened bodily injury exposures. As the bodily injury exposures are newly opened, the final value amount of the exposure is not determined, so the legal representation rate cannot be calculated on an amount basis. ICBC can provide the percentage of closed bodily injury exposures with the total paid under $40,000 with representation for the close years 2004, 2005 and Those percentages are set out in Figure 1 below. Figure 1 Percentage of Closed Bodily Injury Exposures with Total Payment under $40,000 with Representation Close Year Close Year Close Year % 33% 30%

22 Information Request No..1 RR BCCA.PM.3.b Dated 04 May 16 March Insurance Corporation of British Columbia.1 RR BCCA.PM.3.b Reference: Page 8-10, Legal Representation Rate. To what extent can ICBC relate its representation rate to its management of accident benefit claims, that is, can ICBC measure or determine the extent to which consumer frustration with accident benefit issues drives them to retain legal counsel? ICBC would be able to determine whether accident benefit issues lead claimants to retain legal counsel on bodily injury exposures (the legal representation rate is based on bodily injury exposures) only by surveying the accident benefit claimants. ICBC is constrained in its ability to conduct timely research into the reasons that accident benefit claimants who also have a bodily injury claim retain counsel due to issues with their accident benefit claim. It would be inappropriate for ICBC, or an agent on ICBC s behalf, to contact to survey represented claimants.

23 Information Request No..1 RR BCCA.PM.3.c Dated 04 May 16 March Insurance Corporation of British Columbia.1 RR BCCA.PM.3.c Reference: Page 8-10, Legal Representation Rate. Can ICBC identify when, in the course of a claim, legal representation generally occurs. For example, X% have lawyers retained within 3 months, or 6 months, etc. ICBC tracks whether a bodily injury claim file has legal representation by running a report to show the number of bodily injury claims that have a Y-indicator. A Y-indicator is a yes or no field to indicate whether a file is represented and is information entered by the adjuster in to the field. The presence of a Y-indicator does not necessarily provide accurate information on the timing of legal representation. Currently, the only way for ICBC to accurately determine when in the course of a claim legal representation occurs is to perform a manual review of all bodily injury claim files.

24 Information Request No..1 RR BCCA.PM.4 Dated 04 May 16 March Insurance Corporation of British Columbia.1 RR BCCA.PM.4 Reference: Page 8-16, Figure 8-15, Bodily Injury Paid Severity. Please provide the severity measure for claims above and below $40,000 for each of 2004 and 2005 as well. If not available, please explain why? The bodily injury paid severity for the years 2004 and 2005 for above and below $40,000 is as follows: Bodily Injury Paid Severity 2004 Actual 2005 Actual Total Bodily Injury Paid Severity Below $40,000 Above $40,000 $21,024 $8,091 $131,188 $24,488 $8,717 $135,031

25 Information Request No..1 RR BCCA.PM.5 Dated 04 May 16 March Insurance Corporation of British Columbia Page 1 of 2.1 RR BCCA.PM.5 Reference: Page 8-17, Figure 8.16 Accident Benefit Paid Severity. Since the inclusion of claims over $100,000 adds "volatility" to this measure, please provide the accident benefit paid severity for each of 2004, 2005, and 2006 excluding all claims for accident benefits over $100,000. Further, to the extent that the BCUC and ICBC distinguish between claims over and under $40,000 in the bodily injury category, please provide the accident benefit paid severity for claims where the bodily injury severity was over and under $40,000. The object is to allow a comparison of the trends in relation to accident benefits and bodily injury severity within a consistent category of claims. Accident benefit paid severity is calculated on the basis of total payments on accident benefit exposures closed in a year, regardless of the year of loss (and as a result, is distinct from actuarial data which is based on loss year, regardless of when the claim is reported or when it is closed). Figure 1 below sets out the accident benefit paid severity for the years 2004 to 2006 after excluding accident benefit exposures over $100,000. Figure 1 - Accident Benefit Paid Severity Excluding Exposures over $100, Actual 2005 Actual 2006 Actual Accident Benefit Paid Severity $1,318 $1,449 $1,410 Figure 2 below sets out the total accident benefit paid severity for bodily injury exposures closed in each of 2004, 2005 and 2006, separated into closed bodily injury exposures over and under $40,000. The accident benefit paid severity set out in Figure 2 related to the bodily injury exposures is calculated on the basis of the close year for the bodily injury exposure in order to be able to determine the value of the bodily injury exposure, rather than the close year for the accident benefit exposure, as is done for the calculation of accident benefit paid severity in Figure 8-16 of Chapter 8 of the Revenue Requirements Application and for the total accident benefit paid severity shown in Figure 2.

26 Information Request No..1 RR BCCA.PM.5 Dated 04 May 16 March Insurance Corporation of British Columbia Page 2 of 2 Figure 2 Accident Benefit Paid Severity by Bodily Injury Paid Severity Over and Under $40, Actual 2005 Actual 2006 Actual BI Exposures Below $40,000 $ 905 $ 913 $ 858 BI Exposures Above $40,000 $8,625 $8,799 $8,123

27 Information Request No..1 RR BCCA.PM.6 Dated 04 May 16 March Insurance Corporation of British Columbia.1 RR BCCA.PM.6 Reference: Appendix 8-A, Performance Statistics, reveals that from 2005 to 2006 accident benefit paid severity decreased while bodily injury paid severity increased. For, ICBC projects a 1.9% increase in accident benefit paid severity but a 4.9% increase in bodily injury paid severity. Has ICBC explored the relationship between decreasing AB payouts and rising BI severity? If so, what conclusions has ICBC made? A decrease in the average accident benefit paid severity does not equate to a reduction in the accident benefit payouts. The accident benefit paid severity measure is an average of total payments on accident benefit exposures closed in a year and does not measure a change in the value of the amount paid on individual accident benefit exposures. Accident benefit paid severity is affected by the number of exposures, the mix of exposures, in particular the number of large loss exposures, and the total payments. In addition, not all accident benefit exposures have a corresponding bodily injury claim. Exposures related to claims handled within the Low Velocity Impact Guidelines are not related to a bodily injury claim. Consequently, it is not possible to directly correlate changes in accident benefit paid severity with changes in bodily injury paid severity.