So many claimants are caught in this problem of not knowing what benefits they are entitled to?

How is that so many claimants are caught in this problem of not knowing what benefits they are entitled to? Fundamentally the system is so complicated and difficult to navigate that the Financial Services Commission ought to be obligated to offer a course of study just so we would be able to read through it - is it deliberately complicated? We think so.

2014-02-11

Sietzema v. Economical Mutual Insurance Company, 2014 ONCA 111 (CanLII)

 

[9]         The appellant’s submission before the motion judge and in this court is that the respondent misled her concerning her entitlement to Non-Earner Benefits. She thought she could never receive the benefits because she had been working at the time of the accident, so she did not apply for them when her Income Replacement Benefits were terminated. At the time the respondent terminated her Income Replacement Benefits, she should have been told of her right to apply for Non-Earner Benefits.

[10]      The motion judge held that although the appellant may have been personally misled, she had hired a lawyer in early 2006 to advise her of her rights as a result of the accident and this would have included her right to accident benefits. Her lawyer would have known that limitation periods were running. The OCF-9 contained a clear refusal to pay Non-Earner Benefits, and this triggered the limitation period in s. 51(1) of the SABS, which required mediation to be commenced “within two years after the insurer’s refusal to pay the amount claimed.”

[11]      The appellant says the motion judge erred. The fact that she retained a lawyer in 2006, and did not commence an action until 2011, is irrelevant and has no effect on the insurer’s duty to provide complete information to its insured. She relies on Smith v. Co-Operators General Insurance Co., 2002 SCC 30 (CanLII), 2002 SCC 30, [2002] 2 S.C.R. 129, in which the Supreme Court of Canada emphasized the importance of consumer protection in insurance law and the need for “bright-line boundaries between the permissible and the impermissible” (at para. 16). In that case, a majority of the court held the limitation period did not begin to run because the insurer had failed to notify the claimant of the limitation period as a feature of the dispute resolution process.

[12]      Here, the appellant submits the insurer breached its duty to provide her with a written explanation of the benefits available and to assist her in applying for them: SABS, ss. 32(2)(b) and (c). We disagree. The information package sent to the appellant complied with the SABS and stated the test for Non-Earner Benefits as it was then understood, including the requirement that the claimant suffer a complete inability to carry on a normal life as a result of the injuries sustained. The appellant’s physician stated that she did not meet this “disability test”. The appellant’s real complaint is that she was given an incorrect reason for her ineligibility for Non-Earner Benefits.

[13]      That argument is answered by this court’s decision in Turner v. State Farm Mutual Automobile Insurance Co.2005 CanLII 2551 (ON CA), (2005), 195 O.A.C. 61. In that case, this court held that clear and unequivocal notice given by the insurer, cancelling the insured’s benefits, was sufficient to trigger the limitation period, notwithstanding the insurer gave legally incorrect reasons for cancelling the benefit. The court stated, at para. 8:

We also conclude that the Divisional Court erred in requiring that the reasons for cancelling the benefit must be legally correct. Section 24(8) of the Statutory Accident Benefits Scheme obliges the insurer to give the insured “the reasons for the refusal”. It does not provide that the reasons must be legally correct. The purpose of the requirement to give reasons is to permit the insured to decide whether or not to challenge the cancellation. If the reasons given are legally wrong the insured will succeed in that challenge. Requiring that the reasons be legally correct goes beyond both the requirement in the relevant regulation, and the purpose of such a notice.

See also Katanic v. State Farm Mutual Automobile Insurance Co., 2013 ONSC 5103 (CanLII), 2013 ONSC 5103, [2013] O.J. No. 3605; and Sagan v. Dominion of Canada General Insurance Co., 2013 ONSC 7886 (CanLII), 2013 ONSC 7886, [2013] O.J. No. 6022.

[14]      Here, the OCF-9 sent to the appellant clearly stated that she had been approved for Income Replacement Benefits, which would terminate on March 2, 2006, and that the respondent had determined she was not eligible for Non-Earner Benefits. The form gave her clear notice of her rights to mediation, followed by arbitration, litigation or neutral evaluation if she wished to dispute the refusal or reduction of benefits. It also gave her clear notice of the two year limitation period. She admitted on cross-examination that when she received the OCF-9 she knew she was being denied Non-Earner Benefits. The limitation period began to run when the appellant’s claim for Non-Earner Benefits was refused.

[15]      There is nothing in the Insurance Act or the comprehensive SABS regime to require an insurer, on termination of benefits, to give the claimant a further notice advising that he or she may have a right to renew a claim for a benefit that had previously been denied. As this court observed in Haldenby v. Dominion of Canada General Insurance Co. 2001 CanLII 16603 (ON CA), (2001), 55 O.R. (3d) 470, at para. 30,

there is no provision in the [Insurance Act] or the SABS which allows a claimant to reapply for further benefits after an insured person’s benefits have been terminated by the insurer. The only remedy for the insured person is to appeal the termination of benefits within the two-year period.

[16]      If we accepted the appellant’s argument, the limitation period for making a claim for Non-Earner Benefits never began to run. This would defeat one of the primary purposes of the SABS regime, namely, to ensure the timely submission and resolution of claims for accident benefits.

Source: http://www.fairassociation.ca/