June 20, 2018, Kitchener, Ontario
Posted by: Robert Deutschmann, Personal Injury Lawyer
KG and Certas 2018 CanLII 39499 (ON LAT 16-003633)
Heard Before: Adjudicator Robert Watt
LIMITATION PERIOD: insurer sends out incorrect response to applicant; EOB does not constitute denial of benefit in compliance with Schedule; applicant may continue with IRB claim
KG was injured in a car accident on June 1, 2013, and sought SABs. The parties participated in settlement discussions but were unable to resolve all the issues in dispute.
- Is KG prevented from bringing her application forward on the basis that the proceeding was not commenced within two years of the refusal to pay, subject to section 56 of the Schedule?
- More specifically, does the July 25, 2013 explanation of benefits letter (EOB) constitute a denial in compliance with the Schedule which would then preclude KG from proceeding with her IRB claim?
- Does s. 7 of the Licence Appeal Tribunal Act apply to Statutory Accident Benefit matters?
- The July 25, 2013 EOB does not constitute a denial in compliance with the Schedule.
- KG can proceed with her IRB claim.
KG was a passenger in a vehicle that was rear ended on June 1, 2013. She saw her family doctor and was referred to physio and rehab. On July 22, 2013 KG faxed an OCF 1 to Certas. That form indicated that KG was on EI Benefits and had been working as caregiver at the time of the accident. KG’s OCF 1 was faxed to Certas by CBI on July 22, 2013.
Certas apparently replied to KG on July 25, 2013, with an EOB letter. KG claims to have never received this EOB. The explanation by Certas indicated that KG did not qualify for IRBs “as she was not employed or deemed employed at the time of the accident”. There was no further evidence of any letter from Certas clarifying the contents of the July 25, 2013 letter.
KG’s previous lawyer apparently had possession of the July 25, 2013 EOB. When he obtained the EOB or how he obtained it is unknown, but according to KG, it would have been in the latter part of 2014, when KG finally retained counsel. A quality assurance advisor with Certas, gave evidence that she had no recollection of the July 25, 2013 EOB letter being returned to Certas as undelivered and therefore, she expected KG had received it. Notes indicate that KG had not received the AB package at that time and that KG was to call her when she received the package to go over it. No other calls between KG and Sabrina Vurro were recorded on Sabrina Vurro’s notepad.
KG’s counsel asked for a copy of the AB file. There were no letters or documents contained in the file from Certas showing an explanation of available benefits or letters indicating that KG was ineligible for or denied any benefit by Certas. On November 11, 2015, KG provided Certas with an election of benefits, indicating that she was electing for the first time to receive the income replacement benefit (IRB). On October 25, 2016, KG filed an application for Auto Insurance Dispute Resolution under the Insurance Act for the IRB.
When an insured person applies for benefits under the Schedule, the insurer is required to provide the appropriate forms, a written explanation of the benefits available, information to assist the person applying for benefits and information on the election relating to income replacement, non-earner and care giver benefits, if applicable. The Applicant then has 30 days to submit a completed and signed application after receiving the forms.
The Adjudicator found there is no evidence that Certas sent out the required information package, as required by the Schedule. On this basis the Adjudicator found that Certas breached its obligations and duty of good faith under the Schedule to properly educate KG as to benefits that she was entitled to, and what benefits to make elections on. Certas sent out an EOB denying an IRB which was the wrong response, since it was not the required information package. There was no election by KG at this time for any benefit, because KG had not received proper notice of the process from Certas.
The July 23, 2013 EOB letter does not constitute a proper denial in accordance with the Schedule for the following reasons:
As there was no election by KG at the time of the EOB letter, for any specific benefit, including an IRB. KG had submitted a general application (OCF 1) setting out personal information about herself, her employment, her medical conditions, and family information, etc. There cannot be a denial on a benefit before it is claimed. KG made her first claim for an IRB on November 11, 2015, once she was properly advised, that she could make the claim.
Certas did not comply with the Schedule to properly inform KG what benefits she could elect. The July 23, 2013 EOB letter was incorrect on KG’s rights to elect an IRB. These factors make the response not clear and unequivocal to an unsophisticated person. The Supreme Court requires all denials to be clear and unequivocal. Further, an insurer’s obligation of good faith and fair dealing carries a positive obligation to inform an insured of the nature of the benefits available under a policy.
On this basis KG is not barred from bringing her claim to the Tribunal, as she has not exceeded the two year limitation period set out in the Insurance Act and the Schedule, because there was no clear and unequivocal denial by Certas which would trigger the limitation period.