The applicant insurer sought judicial review of a decision by a delegate of the Financial Services Commission of Ontario, which upheld an arbitrator's ruling that the respondent insured's claim for income replacement benefits was not statute-barred.
The insurer conceded that its notice of denial did not meet the strict requirements set out in Smith v. Co-operators General Insurance Company, but argued that the delegate should have applied a contextual approach rather than a bright-line test.
The Divisional Court dismissed the application, finding that the delegate reasonably applied the bright-line test from Smith.
The court noted that the Court of Appeal in Golic confirmed that the analysis must focus on the notice itself, precluding consideration of outside circumstances to relieve an insurer of its obligation to provide proper notice.
