ICBC explains how vehicles sold with incorrect repair history

From Bodyshop Magazine

- Daily News Wednesday, July 23, 2008

The Insurance Corporation of British Columbia has cleaned house and implemented new policies in the wake of investigations into the sale of vehicles repaired at ICBC's Burnaby-based research and training facility.

PricewaterhouseCoopers was retained by ICBC to conduct an independent, external investigation into concerns that some vehicles repaired at the facility were sold with a repair history that was incorrectly documented and not disclosed to buyers.

The PwC report released in July substantiated ICBC's initial findings that there was a general lack of controls and conflicting policies and procedures regarding the appropriate vehicle designation and around employee purchase of vehicles repaired at the facility. In addition, the report found that appropriate actions were not taken by the management responsible when concerns were raised about the facility prior to January, 2008.

What went wrong?

These are excerpts of ICBC's explanation to the media, released in July in conjunction with the PricewaterhouseCoopers report.

"After a vehicle is identified as a total loss, ICBC's Salvage Department gives it one of four designations: Dismantle Purposes Only; Salvage; Total Theft; Vehicle Repaired. These internal designations are used to trigger the appropriate status in the Vehicle Registration System – the information the public sees.

A vehicle designated as salvage can be repaired. It can be licensed and insured after being structurally and mechanically inspected by a Designated Inspection Facility. Once this is complete it is considered a rebuilt vehicle. A vehicle designated as vehicle repaired was originally estimated as repairable and sent to an external collision repair shop. In some circumstances, over the course of the repairs, the costs increased making the vehicle a total loss. While in other circumstances, ICBC decided to buy the vehicle from the customer for customer service reasons.

The damage history of 94 vehicles repaired at the research and training facility was not properly documented and disclosed. This means the true repair state of the vehicle was not reflected in the vehicle registration system – the information the public sees. This was done one of two ways:

ICBC salvage department designation switched from Salvage to Vehicle Repaired. Payment code changed from 'total loss' to 'cash settlement'.

The practice of some employees and managers purchasing vehicles was condoned by a specific line of authority within ICBC. While this practice did not explicitly violate ICBC's policies and procedures, it resulted in inappropriate actions and the appearance of a conflict of interest. This management group also condoned the improper use of the facility.

ICBC has already taken steps to make sure nothing like this happens again, and we are committed to implementing all of the recommendations in the PwC report."