Motor Vehicle Accidents
Why Ontario drivers pay the highest insurance premiums in Canada
Special to The Globe and Mail
The Fraser Institute’s landmark 2011 study on public-versus-private delivery of auto insurance in Canada concluded that Ontario’s private-sector insurance regimen enjoyed the questionable distinction of being the most expensive in the country – a conclusion even more damning because the report’s major takeaway was the overall superiority of the private system in other parts of Canada.
Read the complete article in the Globe and Mail.
Get the facts and the truth about some common Traffic Law Myths. Did you know that a traffic ticket cannot simply be dropped even if there was a mistake made on the ticket?
Do you have a favourite lawyer joke? Is it in our list of PG rated jokes?
Although the annual number of impaired driving charges is down, it only takes one impaired driver to cause a traffic incident and destroy a family for life. Read about FAID and Smitiuch Injury Law’s support of the Freeze the Keys campaign.
These are just a few of the interesting articles in this issue.
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The Financial Services Commission of Ontario (FSCO) has released a Pre-Arbitration Hearing Decision regarding Aviva Canada’s failure to have anyone from the insurer with authority available to resolve an accident benefits claim.
In the decision, Dabrowska and Aviva [FSCO A13-007793] a pre-arbitration discussion was held on February 27, 2014, and counsel for both parties reached an agreement on a “modest resolution” of the insured’s accident benefits claim. While Aviva had legal counsel and a representative present at the discussion, neither of them had authority to approve the settlement and no one with authority was available by either telephone or email.
Arbitrator John Wilson found Aviva in violation of Section 279(5) of the Insurance Act, which reads as follows:
If an insurer or an insured is represented in a mediation under section 280, an evaluation under section 280.1, an arbitration under section 282, an appeal under section 283 or a variation proceeding under section 284, the mediator, person performing the evaluation, arbitrator or Director, as the case may be, may adjourn the proceeding, with or without conditions, if the representative is not authorized to bind the party he or she represents.
The Arbitrator made the following comments:
“Authorized to bind” in the Act means that the representative never has to pick up the telephone to get instructions. Binding authority does not exist where the representative merely has authority to say “no” with no room to vary that position should further information be made available.
This pre-hearing was not a surprise to Aviva. It received the appropriate notices. Indeed, it sent an in-house counsel and an experienced representative, neither with any authority to do more than attend the pre-hearing.
The requirements of the Insurance Act should not have been a surprise to Aviva either. It has a legal department which appears frequently at FSCO arbitrations and pre-arbitrations, and should have been in a position to be aware of its responsibilities under section 279 of the Act and the related jurisprudence.3 Aviva is a sophisticated player and should have known better.
As a result Aviva was ordered to pay the time for the legal representative to prepare and attend the pre-hearing, as well as the actual travel expenses for the insured.
This decision can be read in its entirety by clicking here.
The Financial Services Commission of Ontario (FSCO) has released a revised Minor Injury Guideline (MIG) as well as a revised Treatment and Assessment Plan (OCF-18). Both of these become effective February 1, 2014.
These revisions reflect the changes to be made to the Statutory Accident Benefits Schedule (SABS) on February 1, 2014.
To access the FSCO Bulletin, as well as the documents, click here.
The Government of Ontario has announced upcoming changes to the Statutory Accident Benefits Schedule (SABS), effective February 1, 2014.
These changes include:
- A requirement that, in order for an insured with a minor injury to be considered outside of the Minor Injury Guidelines, documentation will need to be provided of, “…a pre-existing medical condition that was documented by a health practitioner before the accident…”
- If a “non-professional” is providing attendant care, the amount payable by the insurer will be limited to the actual amount of the economic loss sustained.
- Disallowing an insured to re-elect to a new benefit (income replacement, non-earner or caregiver) regardless of any change in circumstances.
The amendment can be reviewed in its entirety by clicking here.
The Government of Ontario has filed regulations governing health care clinics and assessment centres who provide services paid for by automobile insurers.
The following was reported on Willie Handler’s Blog this morning. Mr. Handler formerly worked in auto insurance regulatory policy for the Ontario government.
The Ontario Government filed new regulations as part of the process to eventually license health care clinics and assessment centres operating in the auto insurance sector. The regulations cover a public registry of licenced facilities (Regulation 350/13), licensing of providers (Regulation 348/13) and requirements of the principle representative of each licensed facility (Regulation 349/13). The report recommending a licensing system was made by the Automobile Insurance Anti-Fraud Task Force in 2012.
The public register of licensed and former licensed service provider’s licence to be maintained must contain the following information about each licensee and former licensee:
1. The name in which the service.
2. The licence number.
3. The licensee’s mailing address in Ontario.
4. The date on which the licence was issued.
5. Whether the licence is in good standing or is suspended.
6. Any conditions that apply to the licence.
7. Any periods of time during which the licence was suspended.
8. Any periods of time during which the licence was revoked.
9. The name of the licensee’s principal representative.
10. The address of every facility, branch or location in Ontario of the licensee.
Eligibility criteria for facilities
A service provider’s licence may be issued to an applicant if all of the following requirements relating to the applicant’s business systems and practices and the management of its operations are satisfied:
1. The applicant has a mailing address in Ontario that is not a post office box.
2. The applicant has an email address.
3. The application includes the particulars of the individual to be designated as the service provider’s principal representative.
4. The principal representative has provided an attestation on the applicant’s behalf relating to the applicant and the application and relating to the applicant’s compliance with the Act.
5. The application includes the particulars of each facility, branch or location in Ontario that the applicant operates or intends to operate.
6. The applicant must agree to bill insurance companies through HCAI.
In determining whether an applicant is not suitable to hold a service provider’s licence, the Superintendent is required to have regard to the following circumstances:
1. Based on past conduct of the applicant, there are reasonable grounds for the belief that the applicant will not carry out in accordance with the law or with integrity and honesty the completion or submission to an insurer, reports, forms, plans, invoices or other documentation or information authorized under the SABS.
2. Whether, having regard to the past conduct of any of the following persons, there are reasonable grounds for the belief that the applicant’s business systems and practices and the management of its operations will not be carried on in accordance with the law or with integrity and honesty:
- The applicant.
- If the applicant is a corporation, a director, officer or shareholder of the corporation.
- If the applicant is a partnership, a partner of the partnership.
- If the applicant is a sole proprietorship, the sole proprietor.
- The person to be designated as the applicant’s principal representative.
- An employee, agent or contractor of the applicant.
3. Based on past conduct, there are reasonable grounds for the belief that the applicant’s business systems and practices and the management of its operations will not be carried on in accordance with the law or with integrity and honesty.
4. Whether anyone associated with the business is engaged in a business or undertaking that would jeopardize the applicant’s integrity and honesty in relation to the applicant’s business.
5. Whether anyone associated with the business has made a false statement or has provided false or deceptive information to the Superintendent, with respect to the application for a licence, or in response to a request for information by the Superintendent.
Eligibility criteria for principal representatives
An individual who satisfies the following criteria is eligible to be designated by a licensed service provider as its principal representative:
1. The individual has the following status in relation to the licensee:
- If the licensee is a corporation, he or she is a director or officer of the corporation.
- If the licensee is a partnership, other than a limited partnership, he or she is a partner.
- If the licensee is a limited partnership, he or she is a general partner or a director or officer of a corporation that is a general partner.
- If the licensee is a sole proprietorship, he or she is the sole proprietor.
- If the licensee is not a corporation, a partnership or a sole proprietorship, he or she is responsible for the day-to-day control and management of the licensee.
2. The individual has the authority to make decisions on behalf of the licensee with respect to matters related to the licence and matters related to the licensee’s compliance with the Act and to communicate with the Superintendent about those matters.
3. The individual has the authority to exercise the powers and perform the duties described above.
Powers and duties of principal representatives
1. Take reasonable steps to ensure that the licensee complies with the Act.
2. Take reasonable steps to ensure that the licensee’s business systems and practices and the management of the licensee’s operations are carried on in accordance with the law and with integrity and honesty.
3. Ensure that the licensee takes reasonable steps to deal with any contravention of the Act.
4. Make recommendations to the licensee regarding changes in its business systems and practices and the management of its operations, as necessary, to ensure that these standards are achieved.
5. Take reasonable steps to ensure that a system of supervision is in place to ensure that these standards are achieved.
6. Provide such attestations on the licensee’s behalf relating to the licensee and relating to its compliance with the Act, as may be required by the Superintendent and within the time required by the Superintendent.
The Financial Services Commission of Ontario has allowed the appeal of a previous arbitration decision with respect to the Minor Injuries Guidelines (MIG).
In the appeal decision Scarlett and Belair Insurance [FSCO P13-00014] Director’s Delegate David Evans allowed the appeal of the earlier decision by Arbitrator Wilson. Our original blog post on this decision can be referenced by clicking here.
Director’s Delegate Evans has ordered that all issues be subject to a full hearing before another arbitrator.
This appeal decision provides a few glimpses of what is likely to come from a new arbitration hearing with respect to the Minor Injury Guidelines:
- The dominant test of whether a person falls into the MIG is if the injury was predominantly a minor injury;
- The burden of proof always rests on the insured, not the insurer, of proving that he or she fits within the scope of coverage;
- “Compelling evidence” is more than “credible evidence”; and
- The MIG is binding and is not only advisory.
The Director’s Delegate also noted that the arbitrator’s decision breached procedural fairness by raising cases and statutory provisions of his own accord after the arbitration hearing without providing notice to the parties or an opportunity to respond.
FSCO Releases Decision Clarifying What Is a “Medical Reason” for Denial of a Benefit and Insurer’s Examination
The Financial Services Commission of Ontario (FSCO) has released a decision clarifying what is considered to be a “medical reason” for an insurer to deny a benefit and for the insurer to demand that an insured attend an insurer’s examination under Section 44 of the Statutory Accident Benefits Schedule (SABS).
In the decision, Kadian Augustin and Unifund Assurance Company [FSCO A12-000452] Arbitrator Susan Sapin considers whether or not Ms. Augustin is allowed to dispute the insurer’s denial of treatment because she failed to attend an insurer’s examination. In order to make a determination Arbitrator Sapin needed to consider whether or not the insurer’s examination was compliant with the SABS.
Unifund wanted to send Ms. Augustin to an insurer’s examination to determine if she was within the Minor Injury Group (MIG) after receiving a treatment plan that, if approved, would take her out of the MIG. Unifund provided the following notice to Ms. Augustin in their Explanation of Benefits: “Based on our review of the medical documentation provided to date, we require an assessment by an independent medical assessor, in order to determine if your impairment is predominantly a minor injury as described in the Minor Injury Guideline. Please see the Notice of Examination for further details.”
Arbitrator Sapin found that this explanation did not comply with Section 38(8) of the SABS because it did not state that Unifund “believes” the MIG applies, or why. Nor did it state the “medical reasons and all of the other reasons why the insurer considers any goods or services, or the proposed costs of them, not to be reasonable and necessary. The arbitrator noted that it provided no reason, medical or otherwise, explaining why it refused to pay the benefit.
Arbitrator Sapin goes on to explain,
Although this might seem a very fine point, that is what the sections [38(8), 38(9) and 38(10)] actually say. The legislature chose this wording, and recognised principles of statutory interpretation require me to interpret it in a reasonable fashion and in the overall context of the accident benefits scheme. Given that an insured person’s treating practitioner must provide a factually based medical opinion to support a claim for treatment outside the MIG, I find it is reasonable to require an insurer who chooses to refuse to pay an initial claim to counter with something more than simply a desire “to determine if your impairment is predominantly a minor injury as described in the Minor Injury Guideline,” as Unifund has done in this case. This is particularly so where, as in the case here, Unifund refused to pay for the treatment pending an IE, a response I find undermines the stated purpose of the MIG to provide access to early treatment, a purpose based on sound medical principles.
The arbitrator also provides a guideline for insurers for a proper denial of an application for a benefit that would take the insured out of the MIG as follows:
I find it follows logically from these requirements that in its s. 38(8) notice to the insured person that medical benefits will not be paid, the insurer, in explaining why the benefits are not payable, must indicate that it has reviewed the Treatment and Assessment Plan and any medical documentation provided; compared it to the criteria in the MIG; and determined either that there is insufficient compelling evidence (of pre-existing injuries or conditions, for example) or insufficient medical documentation to persuade it that the accident injuries fall outside of the MIG, and therefore, the insurer believes the MIG applies and the treatment claimed is not reasonable or necessary (because the treatment does not conform to the MIG treatment protocols, for example). I find that type of response would meet the insurer’s obligation to provide “medical reasons” as required by s. 38(8) when it chooses to refuse benefits because it believes the MIG applies.
Also of note is the arbitrator’s distinction between a “medical reason” and a “medical opinion”:
A medical opinion, such as that required of the health practitioner who submits the Treatment and Assessment Plan, is based on facts obtained from an assessment of the insured person’s medical condition, in person or otherwise. As stated above, an insurer does not have the benefit of its own medical opinion at the time it receives the initial treatment plan, and can only obtain one by exercising its right to an IE, founded in s. 38(10), and for which rules are set out in s. 44(5).
With respect to the need for a medical reason to be provided by an insurer when notifying the insured for their need to attend an insurer’s examination under Section 44 of the SABS, Arbitrator Sapin states as follows:
As stated above, I find s. 38 and s. 44 must be read together, as the right to an IE is founded in s. 38(10) and arises from the insurer’s right under s. 38(8) to refuse a claim for treatment. I have already identified that the “medical reasons and all of the other reasons” in the refusal notice should include, at a minimum, a statement that the claims adjuster has reviewed the MIG and the treating health practitioner’s medical opinion, and has concluded that the health practitioner has not provided compelling evidence that the person’s injuries are outside the MIG, or that the treatment claimed is reasonable or necessary. The “medical and other reasons for the examination” in the Notice of Examination under s. 44(5) should contain substantially similar information.
This decision can be read in its entirety by clicking here.
In a recent Ontario Superior Court of Justice decision, State Farm v. Bunyan [2013 ONSC 6670 (CanLII)], State Farm Insurance Company was not allowed to consider an accident benefits claimant as not being an “insured” under the policy five years after the motor vehicle accident.
This decision deals with Christian Bunyan, who was a pedestrian who was struck by a truck in Alberta in September of 2007 and suffered catastrophic injuries. At the time of the accident he did not have a driver’s license. He was dependent on his mother, who lived in Ontario and had a valid automobile insurance policy with State Farm. Under Ontario law, a person who is considered insured under an Ontario policy can apply for accident benefits in Ontario if their accident occurs anywhere in Canada or the United States.
State Farm accepted the accident benefits claim and also accepted that Mr. Bunyan was catastrophically impaired. Five years after the accident State Farm then took the position that Mr. Bunyan was not dependent on his mother and was, therefore, not deemed to be an “insured person” under the policy. Mr. Bunyan asserted that he was dependent upon his mother at the time of the accident and that, since State Farm was raising this issue five years after the accident, he had lost the opportunity to apply for benefits through any other insurer. In other words, if he was not considered dependent on his mother and not eligible for further Ontario accident benefits he would have no other insurer to provide his much-needed benefits.
D.L. Corbett J. ruled that Mr. Bunyan was dependent on his mother at the time of the accident and also ruled that State Farm was barred by the legal principal of estoppel from taking this position five years after the accident. Estoppel basically means that a party is not allowed to assert a fact or a claim inconsistent with a previous position, especially when it has been relied or acted upon by others. In other words, since State Farm had accepted that Mr. Bunyan was an insured person for five years and Mr. Bunyan had relied on that position and had not applied to other insurers because of that, State Farm was now estopped from changing their position.
The Court’s decision is also helpful because it expands on what constitutes dependency. At the time of the accident Mr. Bunyan was living in Alberta, had recently acquired a low-paying job, had recently separated from his girlfriend and their son, and was relying on his mother for financial support. As Judge Corbett stated in his decision, “It can be difficult to determine precisely when an adult child ceases to be dependant on his parents. Functionally, the change from dependence to independence is more a transition than an event.”