Financial Services Commission of Ontario

Commission des services financiers de l’Ontario

Neutral Citation: 2004 ONFSCDRS 180

Appeal P03-00034

OFFICE OF THE DIRECTOR OF ARBITRATIONS

FRANCESCA DIGIOVANNI (Estate Of)

Appellant

and

AXA INSURANCE (CANADA)

Respondent

Before:

David Evans

Representatives:

Luigi DiPierdomenico for Ms. DiGiovanni's Estate

Jeffrey M.K. Garrett for AXA

Hearing Date:

By written submissions received September 3, 2004

APPEAL ORDER

Under section 283 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:

The appeal is dismissed, and the arbitration order dated August 28, 2003, is confirmed.
If the parties are unable to agree on appeal expenses, the matter may be resolved in accordance with Rule 79 of the Dispute Resolution Practice Code.

December 1, 2004

David Evans Director's Delegate

Date

REASONS FOR DECISION

I. NATURE OF THE APPEAL

Francesca DiGiovanni died as a result of injuries sustained in a motor vehicle accident on January 31, 2000. Her estate appeals the Arbitrator's decision of August 28, 2003, that her death is not an impairment for the purpose of qualifying for caregiver benefits pursuant to s. 13 of the SABS-1996.¹

II. BACKGROUND

Caregiver benefits pay for reasonable and necessary expenses incurred as a result of an accident, as defined in the SABS-1996, in caring for a "person in need of care" [s. 13(2)]. A person in need of care means, in respect of an insured person like Ms. DiGiovanni, another person who is less than 16 years of age or who requires care because of physical or mental incapacity [s. 2(1)]. Ms. DiGiovanni allegedly met the criteria to qualify for caregiver benefits in s. 13(1), in that at the time of the accident she was residing with persons in need of care (five grandchildren and her father) to whom, for no remuneration, she gave primary care. She also had to have sustained an impairment as a result of an accident. An "accident" means an incident in which the use or operation of an automobile directly causes an impairment, and an "impairment" means a loss or abnormality of a psychological, physiological or anatomical structure or function [Definitions, s. 2(1)].

This is not a case where an estate is claiming benefits owed an insured person up to the date of death. Here, the estate claims ongoing caregiver benefits for caregiving expenses incurred after Ms. DiGiovanni's death. It presented the argument that, by dying, Ms. DiGiovanni suffered an impairment — that is, her death constituted an impairment. The Arbitrator disagreed, as summarized at the end of his decision: "In conclusion, having regard to the Schedule as a whole, I cannot conclude that it is reasonable to include death within the meaning of 'impairment.'"

III. ANALYSIS

In my opinion, the estate's argument is focused on the wrong issue. Clearly, Ms. DiGiovanni suffered an impairment in the accident — she died. The real issue is whether, in any meaningful sense, Ms. DiGiovanni can be said to be still impaired and entitled to ongoing benefits. Looked at in that way, the estate's argument is absurd.

Most SABS-1996 benefits are payable to the insured person. The caregiver benefit specifically provides that the insurer "shall pay an insured person who sustains an impairment as a result of an accident a caregiver benefit" if the other criteria are met. The requirement that the insurer shall pay an insured person a benefit is repeated for the following benefits: income replacement [s. 4(1)]; non-earner [s. 12(1)]; medical [s. 14(1)]; rehabilitation [s. 15(1)]; attendant care [s. 16(1)]. It is not at all obvious that the insurer owes an ongoing duty to pay benefits after the insured person dies.

By way of contrast, death [s. 25] and funeral [s. 26] benefits are payable in respect of an insured person who dies as a result of an accident. They are not payable to the deceased. This is consistent with s. 279(3) of the Insurance Act, which deems those claiming death and funeral benefits to be insured persons for the purposes of dispute resolution.²

While some types of accident benefits could be paid to others, they clearly terminate with the insured person's death. For instance, certain individuals are entitled to travel expenses [s. 21(1)1-4], but only for expenses incurred "in visiting the insured person during his or her treatment or recovery." Once the insured person dies, there is no more treatment. Section 24 examination expenses focus on treatment of the actual, extant insured person. The arbitrator in K.M.³ referred to housekeeping benefits⁴ and wrote: "If the insured person were to die, she could neither incur expenses for housekeeping, nor have them incurred on her behalf. The prospect is absurd."⁵

The optional dependant care benefit in s. 28(1)⁶ does provide a "death exclusion" in s. 28(2): "No payment is required under this section in respect of an expense incurred after the insured person dies." A careful review of the wording and the mechanism for terminating benefits explains the drafter's choice. Unlike the caregiver benefit, the dependant care benefit does not require payment to the insured person. I agree with State Farm that, as the dependant care benefit is not directed to be paid to the "insured person," it is therefore capable of being paid to others, including after the insured person's death. Accordingly, the only basis for the termination of the dependant care benefit is s. 28(2). Contrary to the submission of the estate, s. 28(2) is required, not because "impairment" includes death, but because death does not obviate the potential payment to others.

In conclusion, I can see no basis on which to treat caregiver benefits differently from income replacement, non-earner, medical, rehabilitation, or attendant care benefits. They terminate on the insured person's death, and so do caregiver benefits.

Accordingly, the appeal is dismissed.

IV. EXPENSES

If the parties are unable to agree on appeal expenses, the matter may be resolved in accordance with Rule 79 of the Dispute Resolution Practice Code.