Licence Appeal Tribunal File Number: 23-014535/AABS
In the matter of an application pursuant to subsection 280(2) of the Insurance Act, RSO 1990, c I.8, in relation to statutory accident benefits.
Between:
Bereket Ayana Mekonnen
Applicant
and
Sonnet Insurance Company
Respondent
DECISION
ADJUDICATOR:
Jeff Chatterton
APPEARANCES:
For the Applicant:
Ivy So, Paralegal
For the Respondent:
Karly Lyons, Counsel
HEARD:
In Writing
OVERVIEW
1Bereket Mekonnen, the applicant, was involved in an automobile accident on September 24, 2021, and sought benefits pursuant to the Statutory Accident Benefits Schedule – Effective September 1, 2010 (including amendments effective June 1, 2016) (the “Schedule”). The applicant was denied benefits by the respondent, Sonnet Insurance Company, and applied to the Licence Appeal Tribunal – Automobile Accident Benefits Service (the “Tribunal”) for resolution of the dispute.
2This application went to a preliminary issue hearing and in a decision dated August 7, 2024, the Tribunal determined that the applicant was not barred from proceeding with his claim because he had a reasonable explanation for not submitting the OCF-1 pursuant to section 34 of the Schedule.
ISSUES
3The issues in dispute are:
i. Is the applicant entitled to a non-earner benefit of $185.00 per week from September 24, 2021 to September 24, 2023?
ii. Is the applicant entitled to $1,508.37 for physiotherapy services, proposed by Revive Health Centres Inc, in a treatment plan / OCF-18 dated March 14, 2023?
iii. Is the applicant entitled to interest on any overdue payment of benefits.
4The other issues in the CCRO have been settled, leaving only the treatment plan and non-earner benefits in dispute.
RESULT
5The applicant is entitled to a partial payment of non-earner benefits and interest on overdue payments. The applicant is not entitled to the treatment plan in dispute.
ANALYSIS
NEB - Was the initial denial letter of December 13, 2022 compliant with the Schedule?
6The applicant has not submitted any medical evidence in support of his entitlement to an NEB or the treatment plan in dispute. The applicant relies exclusively on his claim that the notices provided by the insurer were not in compliance with the Schedule. Specifically, the applicant claims the initial denial letter was not compliant with 36(4)(b), and that the insurance companies actions were not compliant with 36(5).
7I find the notice issued December 13, 2022 was compliant with the Schedule.
8The applicant submitted a complete OCF-1 to the insurer on September 20, 2022, approximately one year after the accident. The applicant applied for a NEB at this time.
9The respondent issued a denial letter, dated December 13, 2022. In this letter, the insurer writes, in part:
As you have failed to provide us with a reasonable explanation for the delay in the submission of your Application for Accident Benefits (OCF 1), it is our determination that your entitlement to Accident Benefits is barred under Section 32 of the [Schedule] and no benefits are payable.
10Section 36(4) of the Schedule sets out the particulars that must be included in the insurer’s denial letters when it decides the applicant does not meet the test for specified benefits. It states that within 10 business days after an insurer receives an application and a completed Disability Certificate (“OCF-3”), the insurer shall:
i. pay the specified benefit;
ii. give the applicant notice explaining the medical and other reasons why the insurer does not believe the applicant is entitled to the specified benefit and, if the insurer requires an examination under s. 44 relating to the specified benefit, advising the applicant of the requirement for an examination; or
iii. send a request to the applicant under s. 33(1) of s. 33(2).
11Should the requirements outlined in s. 36(4) of the Schedule not be met, s. 36(6) of the Schedule states:
If the insurer fails to comply with subsection (4) or (5) within the applicable time limit, the insurer shall pay the specified benefit for the period starting on the day the insurer received the application and completed disability certificate, and ending, if the insurer subsequently gives a notice described in subsection (4)(b), on the day the insurer gives the notice.
12The applicant submits that the denial letter dated December 13, 2022 was not compliant with the Schedule. He submits that there was no medical reason provided for a denial, so it was not in compliance with s. 36(4)(b).
13The respondent submits they have the right to issue a denial letter citing “other reasons” if there is no medical basis for the denial. To support their claim, they rely on Varriano v. Allstate Insurance Company of Canada, 2023 ONCA 78. In Varriano the Court of Appeal states “if the insurer is relying on a non-medical ground under s. 37(2), the provision requires only that the insurer provide notice of the cancellation of the benefits and to provide the insured with the non-medical reason for that determination.”
14I do not accept the applicant’s argument that the denial was not valid because it did not provide a medical reason. In keeping with Varriano, which is binding on me, I find that the denial letter of December 13, 2022 provided a valid non-medical reason for the determination that the applicant was not entitled to NEBs – specifically, because of the late submission of an OCF-1.
15Further, although the preliminary issue decision found that the applicant had a reasonable explanation for filing the OCF-1 late and was therefore not barred from proceeding with his claim, the respondent was not aware of the Tribunal’s determination at the time it issued its December 22, 2022 letter. As the Court of Appeal found in Turner v. State Farm Mutual Automobile Insurance Co., 2005 CanLII 2551 (ON CA), the respondent’s reasons do not need to be legally correct.
16Therefore, I find, on the balance of probabilities, that the applicant has not established that the December 13, 2022 denial is non-compliant with section 36(4) of the Schedule.
Is the applicant entitled to NEBs pursuant to section 36(6) of the Schedule?
17I find that the applicant is entitled to NEBs pursuant to s.36(6) of the Schedule because the respondent failed to pay or deny NEBs following his eventual compliance with the respondents s.33 request. However, I also find that the applicant’s compliance with the respondents s.33 request was delayed, and that the applicant did not provide a reasonable explanation for this delay. Therefore, the respondent is not liable to pay NEBs for the duration of the applicant’s non-compliance.
18The applicant submitted that he is entitled to NEBs because the insurer did not pay or deny NEBs after he complied with the respondent’s section 33 requests as required by s.36(6) of the Schedule.
19Section 36(5) of the Schedule provides that if the respondent sends a request to the applicant under subsection 33(1) or (2), the insurer shall, within 10 business days after the applicant complies with the request, pay the specified benefit or give the applicant a notice described in section 36(4)(b).
20Section 36(6) of the Schedule provides a ‘shall pay’ provision if the insurer fails to provide a compliant notice as per s.36(5).
21Section 33 of the Schedule provides the respondent the ability to request information from the applicant. Section 33(1) states that, within 10 business days, the applicant shall respond to the respondent’s request for information reasonably required to assist it in determining his entitlement to a benefit.
22Section 33(6) of the Schedule states that the respondent is not liable to pay a benefit in respect of any period during which the applicant fails to comply with the request.
23Section 33(8) of the Schedule states that an applicant may provide a reasonable explanation to the insurer to explain why they were non-compliant, which would render the applicant back into compliance. In effect, s.33(8) is an ‘off ramp’ from the consequences of 33(6).
24In its denial letter of December 13, 2021, the insurer made a request for information pursuant to s. 33. The applicant did not provide the requested information within 10 business days as required by section 33(1), and provided the requested information to the insurer in three parts, with the final requested information being provided on September 17, 2023.
25The applicant did not provide an explanation as to why they did not provide the information to the insurer within ten days, as per their right under s.33(8).
26The applicant argues that the insurer did not respond after the applicant provided the requested information, and therefore he is entitled to NEBs pursuant to section 36(5).
27The respondent did not make submissions regarding their lack of a response after s.33 requests were received.
28Section 36(6) is the ‘shall pay’ consequence if the respondent fails to provide a compliant notice. Because the respondent did not issue a proper denial after s.33 requests were received as required by s.36(5) of the Schedule, I find that s.36(6) is triggered and the insurer is required to pay NEBs from the date of application until the end date, which according to s.12(1) of the Schedule is 104 weeks after the date of the accident.
29However, I also find that section 33(6) is applicable to the circumstances of this case. As set out above, pursuant to section 33(6), the respondent is not liable to pay a benefit in respect to any period during which the insured person fails to comply with subsection (1) or (2). In this case, the applicant was not in compliance because the s.33 requests were not complied with until September 17, 2023. Therefore, no NEBs are payable during the period of non-compliance.
30Accordingly, I find the applicant is entitled to NEBs for the following two periods:
i. For the time between when the OCF-1 was received until 10 business days after requesting information as per s.33. According to submissions I find this as from September 20, 2022 (the date of the application) to December 29, 2023 (10 days after the initial request for documentation was made.) This is 14 weeks and two days. After this point in time, the applicant became non-compliant because they had not submitted all of the requested information to the insurer.
ii. From the time the applicant complied with the s.33 requests, until NEBs are no longer available as per 12(1) of the Schedule, 104 weeks after the date of the accident. According to submissions, I find this as September 17, 2023 (the day the applicant submitted the last batch of information to the insurer) to September 22, 2023 (104 weeks after the accident.) The subtotal is five days.
iii. The total of both time periods equals exactly 15 weeks.
31In summary, I find the applicant is entitled to a non-earner benefit for a period of fifteen weeks. The Schedule dictates this shall be paid at the rate of $185.00 per week, minus any other income replacement assistance received by the applicant. Interest applies, in accordance with section 51 of the Schedule.
Did the applicant receive a proper denial for physiotherapy?
32I find that the applicant is not entitled to the treatment plan for physiotherapy services and submitted on March 14, 2023. The treatments would only be payable if incurred between March 28, 2023 and March 29, 2023, when a valid denial was issued.
33The applicant is not making submissions regarding substantive entitlement to this treatment plan but argues that the treatment plan is payable as per s38(11) because the Respondent failed to provide a proper notice as per s38(8.)
34Section 38(8) of the Schedule requires an insurer to inform an insured person, within 10 business days after it receives the treatment plan, of the medical and other reasons why it considered the goods and services not to be reasonable and necessary if it denies a plan. Pursuant to s. 38(11), if an insurer fails to comply with its obligations under section 38(8), it must pay for the goods and services that relate to the period starting on the 11th business day after the insurer received the application and ending on the day the insurer gives a notice described in s. 38(8) and it is prohibited from taking the position that the insured person has an impairment to which the MIG applies.
35The applicant submits that the denial letter for physiotherapy services dated March 29, 2023 is improper because it did not list a medical reason. Further, he submits that if a denial letter is issued after ten business days, the insurer is not allowed to rely upon the MIG as a reason for denial. The denial letter for physiotherapy services was issued March 29, 2023, which is eleven days after the OCF-18 was submitted. In the letter, the respondent states, in part:
We have reviewed this OCF-18, along with the other medical information that has ben provided on your file to date and do not agree this plan is reasonable or necessary for the following reasons:
The Accident Benefit claim was denied in accordance with the Statutory Accident Benefits Schedule.
Please refer to our correspondence dated December 13, 2022, which outlines the reason your claim is being denied.
Also, it is our belief that the Minor Injury Guideline (MIG) applies to your claim, and the treatment claimed in the above-referenced OCF-18 is not reasonable and necessary.
36I find that the March 29, 2023 letter is a valid denial. I agree with the applicant that, pursuant to section 38(11), the respondent is prohibited from relying on the MIG as the sole reason for the denial. However, I find that the respondent also relied on the fact that it had denied the applicant’s accident benefit claim and referenced its December 13, 2022 letter denying her claim for benefits pursuant to section 32 of the Schedule. I find that, in the circumstances of this case, the March 29, 2023 letter offers a principled rationale for the denial of the OCF-18.
37Further, as set out above, the respondent’s reasons do not need to be legally correct, and the respondent was not aware of the Tribunal’s preliminary issue determination at the time it issued its March 29, 2023 letter. In my view, the March 29, 2023 denial letter is valid.
38The denial letter was due March 28, 2023, but provided March 29, 2023. As the applicant has not provided evidence that any treatments were incurred between March 28, 2023 and March 29, 2023, I find the treatment plan is not payable.
Interest
39Interest applies on the payment of any overdue benefits pursuant to s. 51 of the Schedule. Interest applies on the overdue amounts owing of the NEB’s, as per the schedule.
ORDER
40The applicant is entitled to a non-earner benefit in the amount of $185.00 per week for fifteen weeks, minus any income replacement benefits received. Interest is payable as per the schedule. The applicant is not entitled to the treatment plan in dispute.
Released: October 7, 2025
Jeff Chatterton
Adjudicator