B.C. insurers may be on hook for all heath care costs in bodily injury claims

If Bill 22 is passed in British Columbia, insurers will be on the hook for all health care costs related to bodily injury claims, warns Jonathan Hodes of Clark Wilson, LLP.
Since the 1950s, the insurance industry in British Columbia had an unofficial agreement with the Ministry of Health that insurers would repay the government for hospital costs incurred by claimants injured as a result of the negligence of the insured, Hodes wrote in the Clark Wilson LLP April 2008 newsletter.
In practice, this occurs only occasionally and the agreement is likely unenforceable, he added.
But earlier this spring, BC’s legislature introduced Bill 22, the Health Care Costs Recovery Act.
Some key points of the legislation include:
when a plaintiff commences legal action for personal injuries or death, he or she must include a health care services claim in the legal proceeding;
health care services claims would include all government-funded services, including hospital costs, medicare and continuing and future care costs; and
if an insurer becomes aware that its insured has or may have caused personal injuries to or death of a beneficiary, the insurer must notify the government within 60 days. It must then comply with the ministry’s requests for further information.
“If Bill 22 is passed, insurers handling claims in British Columbia will have to contend with the added layer of damages in every claim,” Hodes writes. “In particular, [they] will have to ensure that the relevant notice provisions are complied with in order to close their files.
“U.S.-based insurers will see their BC claims fall into line with their experience south of the border, while Canadian insurers will see their exposure increase on virtually every claim.”