Insurer Request for Assessment "Deficient and Not Reasonable"

September 30, 2009, Kitchener, Ontario

Posted by: Robert Deutschmann, Personal Injury Lawyer

Arbitrator: Maggy Murray
Decision Date: May 25, 2009

Mr. Hyung Shin was injured in a car accident on January 13, 2004. He applied for statutory accident benefits from Co-Operators General Insurance Company. The preliminary issue of the hearing was to determine if thepsychiatric medical examination requested by Co-Operators under s.42(1) of the Schedule was reasonably necessary.

An insurer's right to examine its insured is set out in s.42 of the Schedule which states:“42(1) For the purposes of assisting an insurer determine if an insured person is or continues to be entitled to a benefit under this Regulation for which an application is made, an insurer may, as often as is reasonably necessary, require an insured person to be examined under this section by one or more persons chosen by the insurer who are members of a health profession or are social workers or who have expertise in vocational rehabilitation.”

Co-Operators forwarded to Mr. Shin a purported Notice of the proposed examination. Co-operators submitted that they were requesting that Mr. Shin undergo a s.42 examination with a psychiatrist because they had not assessed his psychiatric condition since April 2005. The insurer further submitted that its request that Mr. Shin undergo a psychiatric assessment followed receipt of an insurer's examination report in August 2008 by a physiatrist which included information regarding Mr. Shin’s mental health status.

Mr. Shin submitted that Co-Operators was trying to bolster its case for arbitration rather than adjust his claim and that the Notice of Examination did not contain the information required by s.42(4).

 Deficiency of Notice

Section 42 of the Schedule requires an insurer to provide the insured with a Notice of an Examination ("Notice"). The Notice must include the particulars contained in s.42(4) of the Schedule.

Because it is always open to an adjudicator to raise a legal issue on the facts before him or her and give the parties an opportunity to respond, the arbitrator raised the issue of whether the Notice was deficient, and gave the parties an adequate opportunity to address the issue. Co-Operators' position was that its Notice was not defective, but any "technical deficiency" was corrected by its letter to the Applicant of April 24, 2009. Co-operators also submitted that the type of examination could be "inferred" from the doctor's specialty.

In Part 2 of the Notice, under the heading "Type(s) of Examination," Co-Operators checked off the boxes "Post-104 Weeks Disability," "Medical and Rehabilitation Benefits" and "Housekeeping and Home Maintenance." This did not comply with s.42(4)(b) of the Schedule, which refers to "the type of examination that will be conducted." Post-104 weeks disability, medical and rehabilitation benefits and housekeeping and home maintenance are not an examinations that are conducted. They are benefits under the Schedule.

An "examination that will be conducted" is, for example, a psychiatric examination, a neurological examination, a functional abilities evaluation, to name but a few types of examinations. Indeed, all the items under "Type(s) of Examination" in the Notice refer to various benefits under the Schedule. It was stated in Smith v. Co-operators General Insurance Company:The use by the insurer of a prescribed form does not detract from its obligations under the Schedule.The industry practice of using a form prescribed by the Superintendent cannot somehow be a substitute for conformity with the SABS. There is no indication that insurers are legally prevented from adding to the prescribed form so that it is in conformity with the legal requirements.”

Moreover, in Ives and Wawanesa Mutual Insurance Company it was held that:
The legislature has set out information the insurer must give the insured if it seeks an examination, so that the insured can determine whether he or she wants to submit to the procedure. The parties cannot waive compliance with this section.”
Co-Operators did not indicate in its Notice or letter dated December 8, 2008 accompanying its Notice that the s.42 examination was a psychiatric examination. Co-Operators did not comply with s.42(4)(b) of the Schedule. Insurers must "explicitly and unambiguously advise" insureds in "straightforward and clear language, directed towards an unsophisticated person," the information set out in s.42(4) of the Schedule. Although Co-Operators attempted to rectify its error by its letter to Mr. Shin of April 24, 2009, arbitrators have rejected the piecemeal approach. Moreover, "requiring an Applicant to piece together information from scattered documents" is contrary to Smith.

Co-Operators failed to provide all the particulars required by s.42(4) of the Schedule. Therefore, they were not entitled to an Order that the proposed psychiatric examination of Mr. Shin was reasonably necessary. In the event that the arbitrator was incorrect regarding Co-Operators' Notice, she analyzed below whether the proposed psychiatric examination was reasonably necessary.

Was the medical examination requested by Co-Operators under s.42(1) of the Schedule reasonably necessary?

It is unreasonable to request an examination where circumstances indicate that its only apparent purpose is to acquire medical evidence to bolster the insurer's case at a hearing. Consequently, a proposed insurer medical assessment must be for the purpose of adjusting the claim.

Determining the appropriateness of a request for a medical examination requires a balancing of the interests of the parties, in the context of the particular facts. The following are the relevant factors in determining whether a s.42 examination is "reasonably necessary":

1. The timing of the insurer's request. The closer a request is made to a hearing, the more stringent the scrutiny of its reasonableness should be to ensure that there is no avoidable delay or that the insured's preparation for the hearing is not prejudiced.Absent a clear explanation, examinations scheduled on the eve of a hearing suggest the kind of tactical brinkmanship that arbitrators have rejected as part of this system.

A medical/rehabilitation DAC psychological assessment conducted on April 25, 2005 reported that Mr. Shin had "severe levels of anxiety and depression." Co-Operators waited over three years between receiving this DAC report and requesting that Mr. Shin undergo a s.42 psychiatric examination.

2. The possible prejudice to both sides. If there will be a delay of the start of the arbitration hearing in order for an insured to attend an insurer's examination that may be considered prejudicial to the Applicant.
The arbitration hearing was scheduled to commence August 10, 2009. Co-Operators submitted that it rescheduled the psychiatric assessment to July 15, 2009. Section 39.1 of the Dispute Resolution Practice Code – Fourth Edition requires that all documents to be introduced at a hearing must be served on a party at least 30 days before a hearing. The rescheduled assessment date was less than 30 days before the hearing. Therefore, Co-Operators could not comply with s.39.1 of the Code.
3. The number and nature of previous insurer's examinations.

Mr. Shin underwent a disability DAC assessment on June 14, 2004 with a physiatrist and an occupational therapist. The DAC concluded that he did not suffer a substantial inability to perform the essential tasks of his employment.Mr. Shin underwent a s.42 psychiatric examination on August 20, 2004 which concluded that he did not suffer from any psychiatric disorders as a result of the accident.

Mr. Shin underwent a medical/rehabilitation DAC assessment on October 26, 2004 with a psychologist which concluded that Mr. Shin had psychological or emotional impairments as a result of the accident that warranted psychological intervention.In another medical/ rehabilitation DAC assessment conducted April 25, 2005, the psychologist concluded that a referral for a psychiatric assessment would have been a prudent and effective approach in alleviating Mr. Shin’s distress.

In a disability DAC assessment conducted July 28, 2008, Dr. B (physiatrist) stated: "Mr. Shin presents as a seriously depressed individual. This may be one of the most important sources of impairment, but the origin, and severity do not fall within my scope of practice … I cannot speak to his depression, other than to note that it does appear that he has a significant and poorly controlled psychiatric impairment that could well disable him."

Mr. Shin had undergone numerous examinations to assess his mental health.
4. The nature of the examinations being requested.

There was a reasonable nexus (a means of connection) between the psychiatric examination requested and Mr. Shin’s complaints.
5. Whether there are any new issues raised in the applicant's claim that require evaluation. Where there are changes in the nature of an insured person's medical or psychological condition which are relevant to a disability claim, further examinations are reasonable. 
Dr. D (psychologist) reported in a s.24 assessment in August 2004 that Mr. Shin had symptoms consistent with "significant depression."In a medical/rehabilitation DAC assessment conducted in October 2004, Dr. M (psychologist) concluded that Mr. Shin's "accident-related psychological or emotional impairments … warrant psychological intervention."
There were no new issues raised by Mr. Shin. Mr. Shin’s diagnosis of depression had continued since August 2004.


Co-Operators were aware of Mr. Shin's limitations caused by the accident as early as November 19, 2004, the date which it received the medical/rehabilitation DAC assessment conducted October 26, 2004. Co-Operators waited over three years to request a s.42 examination. Because of the delay in requesting a psychiatric examination, the arbitrator found that Co-Operators had not met its onus of establishing that the s.42 examination is reasonably necessary. Because Co-Operators did not serve Mr. Shin with a Notice that complied with s.42 of the Schedule, they were not entitled to an Order staying this arbitration proceeding. In addition, Co-Operators' request that Mr. Shin undergo a s.42 examination was not reasonably necessary.

Posted under Accident Benefit News, Automobile Accident Benefits, Car Accidents, Catastrophic Injury, Disability Insurance, Slip and Fall Injury, Treatment

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