LICENCE APPEAL TRIBUNAL
Safety, Licensing Appeals and Standards Tribunals Ontario
Date: October 5, 2016
Tribunal File Number: 16-000216/AABS
In the matter of an Application for Dispute Resolution pursuant to subsection 280(2) of the Insurance Act, RSO 1990, c I.8, in relation to statutory accident benefits.
Between:
M. R.
Applicant/Responding Party
and
Aviva Insurance Company of Canada
Insurer/Moving Party
DECISION ON A PRELIMINARY ISSUE
Adjudicator: J.R. Richards
Appearances:
For the Applicant: Fabio Longo, counsel; Kristy Kirwin, counsel
For the Insurance Company: Todd Morris, counsel
HEARD: Teleconference: August 8, 2016
OVERVIEW
1The applicant and responding party on this motion, M. R., was injured in a motor vehicle accident on December 6, 2013. She submitted an Application for Accident Benefits (OCF-1) to Aviva on February 11, 2014, approximately two months after the accident. Aviva responded to M. R.’ Application in Explanation of Benefits letters dated February 18, 2014, March 4, 2014, April 29, 2014 and May 6, 2014. In the letters, Aviva informed her that she was to be treated under the Minor Injury Guideline (MIG), and therefore she did not qualify for attendant care benefits. It is Aviva’s position that these letters are valid denials of M. R.’ application for attendant care benefits.
2Aviva alleges that M. R. is barred from bringing her attendant care benefits claim to the Tribunal as it denied her attendant care claim as early as February 18, 2014 and she did not apply to the Tribunal to dispute the denial until May 6, 2016. In its view, M. R. did not file her claim for dispute resolution within the two-year limitation period, pursuant to ss. 280(2) of the Insurance Act (the Act) and ss. 56 of the Statutory Accident Benefits Schedule (the “Schedule”).
3M. R. states that she did not claim attendant care benefits at any point prior to March 12, 2016 when she underwent an Assessment of Attendant Care Needs. She then applied for attendant care benefits, which Aviva refused to pay. M. R. applied to the Licence Appeal Tribunal on May 6, 2016 disputing Aviva’s refusal. She asserts that Aviva cannot deny a benefit prior to her application for that benefit.
DECISION
4For the reasons that follow, I find that M. R. is not barred from bringing her claim to the Tribunal: as Aviva cannot deny a benefit for which M. R. did not apply; and Aviva’s Explanations of Benefits are not valid denials.
ANALYSIS
Law
5Section 14 of the Statutory Accident Benefits Schedule, effective September 1, 2010 (the “Schedule”), states that an insurer is liable to pay attendant care benefits to a person who sustains an impairment as a result of an accident, if the person’s impairment is not a minor injury.
6Section 42 of the Schedule outlines a comprehensive framework for an application for attendant care benefits. The section states that an application for attendant care benefits for an insured person must be on a form entitled “Assessment of Attendant Care Needs”. The form must be prepared by and submitted to the insurer by an occupational therapist or a registered nurse. Once it has received the approved form, an insurer is required to give the insured person notice that specifies what expenses the insurer agrees to pay or refuses to pay and the medical reasons for the insurer’s decision.
7Both section 281.1(1)1 of the Act and section 56 of the Schedule require that a mediation proceeding, evaluation, court proceeding or arbitration shall be commenced within two years after the insurer’s refusal to pay the benefit or amount claimed.
Denial Prior to Application
8I find that in M. R.’ case the limitation period did not begin to run under the Act and the Schedule when Aviva sent her Explanations of Benefits on February 18, 2014, March 4, 2014, April 29, 2014 and May 6, 2014.
9The OCF-1 form that M. R. submitted to Aviva on February 11, 2014 is a general application. The form asks a broad range of questions concerning an applicant’s living and family arrangements, employment status and medical condition, among other categories. The OCF-1 is not an Assessment of Attendant Care Needs.
10In response to M. R. submitting the OCF-1, Aviva responded with an Explanation of Benefits form (OCF-9). It is Aviva’s position that the February 18, 2014 Explanation of Benefits form triggered the limitation period regardless of whether M. R. was eligible, entitled to or had applied for attendant care benefits. In its view, it is irrelevant that M. R. did not submit an Assessment of Attendant Care Needs in February 2014. According to Aviva, she submitted an Application for Accident Benefits and Aviva denied the benefits, thereby triggering the limitation period.
11I disagree. I find that the Schedule requires that an insured person apply for attendant care benefits in a very specific manner. The Schedule requires a specialized form completed by either an occupational therapist or a registered nurse. Given that this specialized form was not filled out, there were no attendant care benefits for Aviva to deny.
12As authority, Aviva relies on Bustamante v. The Guarantee Company of North America, 2015 ONCA 530, Sagan v. Dominion of Canada General Insurance Company, 2014 ONCA 720, and Sietzema v. Economical Mutual Insurance Company, 2014 ONCA 111. These cases are distinguishable from M. R.’ circumstances.
13Bustamante is primarily about the right to re-elect benefits. In that case, the insured had elected income replacement benefits. Years later, after the insurer had terminated income replacement benefits, the insured attempted to re-elect non-earner benefits.
14The decision in Bustamante is predicated on the insured making a choice for a particular type of benefit and engaging with the insurer over an extended period about that benefit. In M. R.’ case, at the time of the purported denial, she had not chosen attendant care benefits and had no interaction whatsoever with Aviva about attendant care benefits.
15Sietzema is also an election case. What distinguishes Sietzema from the case before me is that the applicant in that case had made a claim, whereas M. R. did not claim the benefit Aviva alleges it denied.
16Finally, in Sagan, the insured argued that the limitation period did not begin to run until there was a denial of a valid claim. In that case, the insured argued that the claim was not valid because it did not include a disability certificate. Since the claim did not include a disability certificate, it did not trigger the limitation period. The Court disagreed and stated that the disability certificate was to be filed with the application and that the disability certificate was not the application itself.2
17M. R.’ case is again distinguishable, as she never made an application for the attendant care benefits. There was nothing for Aviva to deny.
18I am persuaded by the authority on which M. R. relies, Guarantee Co. of North America v. Do, 125 O.R. (3d) 585, 2015 ONSC 1891(Do).
19In Do the court affirmed the decision of the Financial Services Commission of Ontario (FSCO) and agreed that it would be an absurd consequence that a limitation period would begin to run before a benefit was even claimed.
20In Do, the crux of the appeal was whether an insurer’s refusal to accept an insured as catastrophically impaired was a refusal of a benefit and, if so, was the insurer’s refusal clear and unequivocal such as to trigger the limitation period. FSCO agreed that the denial of the status of catastrophic impairment was not a refusal to pay a benefit. A catastrophic impairment determination may have a direct relationship to monetary or time limits for certain benefits, but is not itself a benefit.3 Ultimately, the court agreed, that a limitation period does not run from the date any decision has been made. It runs from the insurer’s refusal to pay the benefit claimed.4
21I agree with M. R. and find that a plain reading of Section 281.1(1)5 of the Insurance Act confirms that a mediation proceeding shall be commenced within two years after the insurer’s refusal to pay the benefit claimed. The sentence does not stop after the words “insurer’s refusal to pay”. For the application to be statute barred, the benefit in dispute must have been both “claimed’ and “refused”. In February, March, April and May 2014, M. R. did not claim attendant care benefits, so there was nothing for Aviva to refuse.
22I find that the trigger for the limitation period is the application for the attendant care benefit. Section 42 of the Schedule specifically requires an insured person to submit an Assessment of Attendant Care Needs form to receive an attendant care benefit. M. R. did not submit this form until March 12, 2016. Even though Aviva determined that M. R. should be treated under the MIG, absent the application for attendant care benefits, there was nothing for Aviva to refuse or deny.
Invalid Denials
23I also find that the Explanations of Benefits Aviva sent to M. R. were not valid denials as they were not clear and unequivocal. Therefore, the limitation period did not begin to run.
Language used in the Explanations of Benefits
24In order for a denial to be valid for the purposes of triggering a limitation period, the denial must be clear and unequivocal. The insurer must use straightforward and clear language, directed to an unsophisticated person. Smith v. Co-Operators General Insurance Co., 2002 SCC 30, [2002] 2 S.C.R. 129.6
25Aviva asserts that it clearly and unequivocally notified M. R. on four dates of its refusal to pay attendant care benefits. Further, that it specifically stated in its correspondence that M. R. did not qualify for the attendant care benefit as there was no coverage for it under the MIG. Aviva’s position is that a non-sophisticated person would understand that it had denied the benefit.
26The Explanation of Benefits forms Aviva sent to M. R. on February 18, 2014, March 4, 2014, April 29, 2014 and May 6, 2014 all stated:
“You do not qualify for the Attendant Care benefit as there is no coverage for this under the Minor Injury Guideline”
27Advising someone that you do not qualify for a benefit, as there is “no coverage” is not the same as refusing to pay a benefit that has been claimed.
28I find that the language Aviva used was not clear and unequivocal and was not sufficient to trigger the limitation period.
Structure of the Explanation of Benefits Forms
29Aviva’s Explanation of Benefits form states “Not Eligible/Stoppage of Benefit” when Aviva addresses non-earner, income replacement and caregiver benefits. However, when addressing attendant care benefits the form does not say “not eligible” or “stoppage of benefit”. It states, “you do not qualify as there is no coverage” for the benefit under the Minor Injury Guideline.
30The Schedule requires an insurer to state clearly what amounts of an attendant care claim it will pay and what amounts it will deny. In M. R.’ case, Aviva’s Explanations of Benefits left the sections pertaining to this requirement blank. Aviva’s Explanations of Benefits form then explains what to do if your claim for accident benefits has been reduced or denied by your insurer. It does not explain what to do when an insurer states “coverage is not available.”
31I find that in the context of Aviva’s forms the term “no coverage” would not be understood or appreciated by an unsophisticated person. The form neither reduces nor stops a benefit, as required by the Insurance Act. Nor do the forms address what Aviva will pay, as required by the Schedule. Instead, Aviva uses the blanket term “no coverage”, which renders the form unclear.
32Aviva appears to alter the standard Explanation of Benefits form to allow it to address a specific application for benefits prior to an insured person making that specific application. Accident victims’ conditions can change over time, and often fluctuate or deteriorate. Accepting Aviva’s position would permit an insurer to issue a denial for a benefit prior to an insured person applying for the benefit. This would allow Aviva to make a blanket denial, and then not continuously adjust the file over time as is required of an insurer. This would effectively limit an insurer’s exposure to pay for a benefit to two years and would be unfair.
DECISION AND ORDER
33I find that in M. R.’ case the limitation period did not begin to run under the Act and Schedule when Aviva sent her Explanations of Benefits on February 18, 2014, March 4, 2014, April 29, 2014 and May 6, 2014. I also find that the correspondence Aviva sent to M. R. on these dates did not amount to clear and unequivocal denials.
34Further, I find that M. R. is not barred from bringing her claim to the Tribunal, as she did not exceed the two-year limitation period set out in the Act and the Schedule.
Released: October 5, 2016
J.R. Richards, Vice-Chair