Neutral Citation: 2003 ONFSCDRS 151
FSCO A02-000299
FINANCIAL SERVICES COMMISSION OF ONTARIO
BETWEEN:
KYLE MCKNIGHT
Applicant
and
GUARANTEE COMPANY OF NORTH AMERICA
Insurer
DECISION ON A PRELIMINARY ISSUE
Before:
Catherine Skinner
Heard:
October 15, 2003, at the offices of the Financial Services Commission of Ontario in Toronto.
Appearances:
Charlia D. von Buchwald for Mr. McKnight
Gregory Van Berkel for Guarantee Company of North America
Issues:
The Applicant, Kyle McKnight, was injured in a motor vehicle accident on April 3, 2000. He applied for and received statutory accident benefits from Guarantee Company of North America ("Guarantee"), payable under the Schedule.1 Guarantee has declined to pay certain statutory accident benefits in respect of Mr. McKnight's injuries. The parties were unable to resolve their disputes through mediation, and Mr. McKnight applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended.
The preliminary issue is:
- What information may Guarantee require from Mr. McKnight in order to pay an attendant care benefit under section 16 of the Schedule?
Result:
- Pursuant to section 33 of the Schedule, Guarantee is entitled to information identifying the service provider and the dates and approximate times of service provision, in addition to the Form 1, before paying an attendant care benefit under section 16 of the Schedule.
SUBMISSIONS:
This hearing proceeded by way of oral submissions only. It is agreed that Mr. McKnight was injured in an automobile accident on April 3, 2000 and has been declared catastrophically impaired as a result. Mr. McKnight applied to Guarantee for attendant care benefits and submitted seven Assessments of Attendant Care Needs (Form 1) to Guarantee. Guarantee has paid some attendant care benefits, but not the full amounts claimed.
The dispute in this case concerns the amount of information the Insurer is entitled to receive in order to determine that an attendant care benefit is payable under section 16 of the Schedule. Mr. McKnight submits that the Insurer is not entitled to any information beyond that contained in the Form 1. Guarantee submits that it is entitled to information about the identity of the service provider and the nature of the services actually provided. For the reasons set out below, I agree with Guarantee that it is entitled to request information to satisfy itself that the attendant care services were provided.
Mr. McKnight submits that section 16 and section 39 of the Schedule provide a complete code with respect to payment of attendant care benefits. Subsection 16(4) of the Schedule requires that the monthly amount payable by the attendant care benefit shall be determined in accordance with Form 1. He submits that the mandatory language of this section confirms his position that the Insurer is not entitled to any additional information.
Mr. McKnight also refers to section 39 of the Schedule which sets out the Insurer's options upon receipt of a completed application for accident benefits. The first option is to pay the attendant care benefit pursuant to section 39(1)(a). The second option is to request a certificate from a health professional stating that the expenses claimed are reasonable and necessary pursuant to section 39(1)(b). Finally, the insurer may require the insured person to attend a Designated Assessment Centre for attendant care benefits as pursuant to section 39(4). Mr. McKnight submits that the Insurer must exercise one of the options set out in section 39 and is not entitled to request any additional information. He points out that there is no specific section in the Schedule which permits the Insurer to request additional information concerning the provision of attendant care benefits.
Guarantee submits that section 16 of the Schedule is intended to provide indemnity coverage for expenses actually incurred for services provided by an aide or attendant. It refers to subsection 16(2)(a) of the Schedule which provides that :
- (2) The attendant care benefit shall pay for all reasonable and necessary expenses incurred by or on behalf of the insured person as a result of the accident for,
(a) services provided by an aide or attendant..
Guarantee submits that the Form 1 on its own does not create an automatic obligation to pay the attendant care benefit. Rather, the insurer is entitled to satisfy itself that the services contemplated in the Form 1 have been provided and that an expense has been incurred before paying an attendant care benefit. It referred to section 33 of the Schedule which permits the insurer to request information reasonably required to determine entitlement to a benefit.
ANALYSIS:
Section 33(1) provides that a person applying for a benefit under the Schedule shall, within 14 days after receiving a request from the insurer, provide the insurer with any information reasonably required to assist the insurer in determining the person's entitlement to a benefit. I do not find that the Form 1 contemplated in section 16 displaces the insurer's right to request reasonable information to determine entitlement to an attendant care benefit under section 33.
I do not agree with Mr. McKnight's interpretation of section 16(4) of the Schedule. He submits that the mandatory language of this section means that the insurer must pay the attendant care benefit in accordance with the Form 1. I find instead that the section requires the benefit to be paid in accordance with the amounts set out in the Form 1, only once entitlement to the benefit has been established. To determine entitlement, the insurer may in some cases require additional information under section 33 of the Schedule.
Subsection 16(2) of the Schedule contemplates that an attendant care benefit is to be paid for reasonable and necessary expenses incurred. The Form 1 identifies attendant care needs, but does not constitute evidence that expenses have been incurred.
The parties referred me to a number of FSCO arbitration decisions which interpret the term "incurred." Based on those decisions, I find that an expense does not need to have been paid to have been incurred. I am satisfied on my reading of the cases, however, that a service does need to have been provided in order for an expense to have been incurred. In S.D and TTC Insurance Company Limited (FSCO A00-000206, May 23, 2002), the arbitrator commented on the meaning of the term incurred as follows: "The very fact of the insured person's need for assistance, and the provision of that assistance by the family member, creates the incurred obligation." I rely on this principle to find that there must be both a need for services and the provision of services in order for an expense to have been incurred within the meaning of section 16 of the Schedule.
I find that the Insurer is entitled to request information to satisfy itself that an expense has been incurred, i.e. that a service has been provided, before paying an attendant care benefit under section 16. I am reinforced in this determination by the following comment from Director's Delegate Makepeace in Zurich North America and Stargratt (FSCO P01-00045, March 31, 2003): "Insurers are entitled to require documentation of caregiver and attendant care services claimed..."
In support of his position, Mr. McKnight referred me to the decision in L. F. and State Farm Mutual Automobile Insurance Company (FSCO A00-000364, August 21, 2002). Mr. McKnight submits that this decision stands for the proposition that the identification of need alone is sufficient to establish entitlement to a benefit. I do not accept his interpretation of this decision. In L.F., the arbitrator specifically found that the Applicant sustained a need for attendant care benefits and that, "there were reasonable expenditures of time and labour for attendant care, and that these are incurred expenses which the care providers earned and to which they are ultimately entitled." In determining entitlement to the benefit, the arbitrator referred to both the applicant's need and to the provision of attendant care services by his friends and family members.
Finally, Guarantee asks that I determine what information it is entitled to in order to determine eligibility for attendant care benefits under section 16 of the Schedule. The documentation reasonably required will depend to a large degree on the circumstances of each case. I am mindful of Director Delegate Makepeace's comment in Stargratt: "Although detailed contemporaneous record-keeping is ideal, evidentiary requirements should be tailored to the informal context." To require minute by minute accounting from the service provider may not be reasonable, particularly in informal arrangements. The reasonableness of the Insurer's request should be assessed in the individual circumstances of each case.
In this case, I find it reasonable that the Insurer would require information identifying the service provider and the dates and approximate times of the service provision in order to satisfy itself that the services were provided and the expenses incurred.
EXPENSES:
The parties made no submissions with respect to expenses. I leave the question of expenses to the discretion of the hearing arbitrator.
October 28, 2003
Catherine Skinner
Arbitrator
Date
Neutral Citation: 2003 ONFSCDRS 151
FSCO A02-000299
FINANCIAL SERVICES COMMISSION OF ONTARIO
BETWEEN:
KYLE MCKNIGHT
Applicant
and
GUARANTEE COMPANY OF NORTH AMERICA
Insurer
ARBITRATION ORDER
Under section 282 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:
- Guarantee is entitled to information identifying the service provider and the dates and approximate times of service provision, in addition to the Form 1, before paying an attendant care benefit under section 16 of the Schedule.
October 28, 2003
Catherine Skinner
Arbitrator
Date
Footnotes
- The Statutory Accident Benefits Schedule —Accidents on or after November 1, 1996, Ontario Regulation 403/96, as amended by Ontario Regulations 462/96, 505/96, 551/96, 303/98, 114/00 and 482/01.