Missing Information
An application does not necessarily have to be complete in order to trigger an insurer's obligation to respond. In the absence of either of the limited circumstances described in s. 32(7)(a) or (b), an insurer that receives an incomplete application must still determine whether a benefit is payable.1
Upon receipt of an incomplete application, notice must be given only in the following circumstances:
(a) the insurer, after a reasonable review of the incomplete application, is unable to determine, without the missing information, whether a benefit is payable; or
(b) the application has not been signed by the applicant.
No benefit is payable before the applicant provides the missing information noted above of signs the application. Only if the applicant has failed to comply with the requirements of ss.32 of the Schedule, without a reasonable explanation, then the insurer is not liable to pay the disputed benefits.
Where do I send the Application Form?
On occasion, an applicant will provide page 2 of the OCF-1 entitled “Where do I send the Application Forms?” This is simply a more reader-friendly version of Part 4: Details of Automobile Insurance.
Part 1: Applicant Information
This section contains the applicant’s basic information including their name, date of birth, address and contact information. Upon receipt of an OCF-1, it is crucial to confirm that the address listed in Part 1 matches the address listed on the policy. Depending on the facts of the specific situation, an incorrect address may be corrected by a request under section 33 or in more serious cases be construed as a wilful misrepresentation.
A purposeful failure by the applicant to disclose their correct address, may in some cases be construed as “wilful misrepresentation” or “an intentional failure to disclose a material change in risk to the contract” under ss. 31(1)(b), 52 and 53 of the SABS2 thereby warranting repayment or termination of benefits.
Wilful Misrepresentations
“accident” means an incident in which the use or operation of an automobile directly causes an impairment... |
Pursuant to section 53 of the SABS, an insurer has the ability to terminate benefits based on misrepresentations made by an insured person. During the course of investigation of a claim, an insurer may determine that misrepresentations have been made and must determine if those misrepresentations are ones that may require a denial of benefits. Specifically, was the misrepresentation both wilful and material?
Questions to ask oneself include (but are in no way limited to): Did the accident occur (See: Dwumaah and RBC General Insurance Company)?3 Was the applicant an occupant of the vehicle at the time of the subject accident?4
Where wilful misrepresentation or fraud go to the foundation of an entire claim for accident benefits, the applicant is liable to repay all sums paid by the insurer in relation to their claim.
Part 2: Applicant’s Representative
This section is only to be completed if the applicant injured in the subject accident is deceased, is a minor or has retained legal representation.
Part 3: Accident Details and Health Information
What is an “accident”?
Section 3(1) of the SABS defines “accident” as follows:
“accident” means an incident in which the use or operation of an automobile directly causes an impairment or directly causes damage to any prescription eyewear, denture, hearing aid, prosthesis or other medical or dental device; (“accident”)
There has been extensive case law with respect to this issue. In order to succeed in their claim, the applicant has the onus to:
- Establish that the use or operation of the vehicle was the cause of the injuries; (the purpose test); and
- Satisfy the Tribunal that there was no intervening act(s) that resulted in the injuries that cannot be said to be part of the “ordinary course of things”. In other words, the question (under the causation test analysis) is whether it could be said the use or operation of the vehicle was a “direct cause” of the respondent’s injuries. (the causation test)
Whether an event is an “accident” is highly fact-specific. The Tribunal has held an incident where a school bus driver left a special needs applicant on a parked bus alone for two hours resulting in psychological injuries meets the definition of an “accident” as defined by the SABS.5 A situation where an applicant was running down a street in the early hours of the morning and tripped, falling headfirst into a parked vehicle was deemed an accident.6
WSIB and the SABS
The next section asks the following:
- Did the accident occur while you were at work?
- Did you file a claim with the Workplace Safety and Insurance Board (the “WSIB”)?
When an applicant is involved in an accident whilst in the course of their employment, an insurer must turn their mind to section 61 (1) of the SABS which provides that an insurer is not required to pay accident benefits to an insured who is entitled to receive workers’ compensation benefits. Subsection (2) also states that an insured is entitled to elect out of workers’ compensation benefits and collect accident benefits, so long as the election is not made primarily for the purpose of claiming benefits under the SABS. One main reason to opt out of a Workplace Safety and Insurance Act (WSIA) action, would be if an injured person wanted to pursue a tort action.
Opting out of the WSIA does however require that the injured person show that their right to commence an action is not precluded by section 28 of the WSIA which disallows Schedule 1 and 2 employees from commencing claims against their respective employers and directors, officers and employees of those employers. If the applicant and the tortfeasor were (1) both Schedule 1 or both Schedule 2 employees (note that what constitutes an employee or a self-employed person is very fact-specific); (2) in the course of their employment at the time of the accident; and (3) there is a real and substantial connection to Ontario, then the applicant may be barred from bringing a tort action and may be bound to the WSIA scheme.
Subsection (4) states that no income replacement, non-earner or caregiver benefit is payable till this election is made. Under subsection (5), an insurer is required to pay full benefits to the insured pending a resolution of any dispute as to whether under subsection (1). These interim benefits are payable as long as there is an approved assignment of WSIB benefits on file such that an insurer may be reimbursed from the WSIB if that is determined.
Note that section 32 (discussed above) places a positive obligation on the insurer to assist the applicant, and overall to adjust the claim. This obligation continues with section 61, such that the insurer should provide the applicant with a WSIB assignment form and make full payments of benefits pending a WSIB entitlement dispute.
Different Classes of Vehicles - Loss Transfer
Loss transfer is a mechanism whereby, in certain circumstances, the first party insurer, may be indemnified by the second party insurer when the second party is partially or entirely at fault according to the Fault Determination Rules, Regulation 668, R.R.O 1990. Please see the below table7:
Automobile insured by first-party insurer8 |
Automobile insured by second-party insurer |
When does second-party insurer reimburse the first-party insurer? |
How much does the second party insurer pay? |
When are payments made by the second-party insurer? |
|
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When the driver of the automobile insured by it is partially or entirely at fault in the incident, according to the Fault Determination Rules, Regulation 668, R.R.O 1990 |
The amount is calculated based on the percentage that the driver of the vehicle covered by the second-party insurer was at fault in the incident. No reimbursement is available for the first $2,000 in no-fault benefits paid by the first-party insurer. |
On an ongoing basis (i.e., when invoiced by the first-party insurer) |
Any automobile other than a heavy commercial vehicle (over 4,500 kg) |
A heavy commercial vehicle9 (over 4,500 kg) |
Same as above |
Same as above |
Same as above |
General Exclusions
Section 31 lists general exclusions to payment of specified benefits (specifically an insurer is not required to pay income replacement benefits, a non-earner benefits, education expenses, visitor expenses and housekeeping expenses:
- in respect of a person who was the driver of an automobile at the time of the accident, if
- in respect of a person who, at the time of the accident,
(i) if the driver knew or ought reasonably to have known that he or she was operating the automobile while it was not insured under a motor vehicle liability policy,
(ii) if the driver was driving the automobile without a valid driver’s licence,
(iii) if the driver is an excluded driver under the contract of automobile insurance, or
(iv) if the driver knew or ought reasonably to have known that he or she was operating the automobile without the owner’s consent;
(i) was engaged in an act for which the person is convicted of a criminal offence, or
(ii)was an occupant of an automobile that was being used in connection with an act for which the person is convicted of a criminal offence;
In the case of the above-noted criminal convictions, the insurer is obliged to hold amounts in trust pending a judgement on the criminal matter. If the person is found guilty, amounts are returned to the insurer, and if they are found not guilty, the person is entitled to payment.
Part 4: Details of Automobile Insurance
Further, the section entitled “Where do I send the Application Form?” mentioned above, section 4 addressed the issue of Priority, which is governed by O. Reg. 283/95, Disputes Between Insurers.
There is no issue regarding priority when an applicant is the named insured, in other cases, the hierarchy follows the list indicated under “A” in Part 4. If none of the listed circumstances under “A” applies, then the list continues onto “B”. If none of those options applies, then an application to the Motor Vehicle Claims Fund may be necessary as listed in Part 10: Motor Vehicle Claims Fund.
There are several instances when priority may become an issue. However, there are three main instances when priority disputes generally arise:
(1) when there is a dispute about whether a named applicant is a dependent of a named insured;
(2) when there is a dispute about whether a named applicant is a spouse of a named insured;
(3) when there is a dispute about whether an applicant has regular use of an automobile during the course of their employment.
Even if priority is a potential issue, the Disputes Between Insurers Regulation states that is incumbent upon the first insurer that received a completed application (see above re: missing information) to pay benefits. This same insurer cannot direct the applicant to another insurer nor deny the application for benefits. This insurer also has a positive obligation to assist the applicant with the application.
The insured has an obligation to provide the insurers with all the relevant information... |
Upon receipt of a completed application, the first insurer has 90 days to provide notice to any other insurer that it intends to dispute its obligation to pay benefits under section 268 of the Insurance Act, R.S.O. 1990, c. I.8. The 90 day deadline applies unless the 90 days was not sufficient to determine if another insurer was liable, or the first insurer made reasonable investigations to determine another insurer was liable in the 90 days. This first insurer also has to give notice to the insured person. The insured person then has 14 days to advise if they object the transfer of the claim. In this case, the insured may be entitled to participate in the dispute.
The insured has an obligation to provide the insurers with all the relevant information needed to determine who is required to pay benefits under section 268 of the Act. The first insurer is also entitled to conduct an Examination under Oath limited to the issue of priority.
Examinations under Oath
An applicant is obligated to attend a maximum of two examinations under oath: (1) one regarding a claim for accident benefits and (2) regarding a private dispute between insurers.
Part 5: Applicant Status and Part 6: Student Attending School
This section is used to determine the applicant’s eligibility for Income Replacement (IRBs), Non- Earner (NEBs) or Caregiver Benefits.
Income Replacement Benefits
To be eligible for income replacement benefits, an applicant must, within two years from the date of the accident, have suffered a “substantial inability to perform the essential tasks” of their employment as a result of the subject accident. They also must meet one or more of the following qualifications:
- employed at the time of the accident (including self-employment);
- or was not employed but worked for 26 or more weeks out of the 52 weeks10 preceding the accident or was receiving Employment Insurance11
- at the time of the crash;
- not employed but at least 16 years old and excused from attending school at the time of the crash; and
- as a result of and within two years after the accident, suffers a substantial inability to perform the essential tasks of the employment (or self-employment), in which the insured person spent the most time during the 52 weeks before the accident.
If more than two years have passed, the individual must satisfy the stricter test of a “complete inability to engage in employment for which he or she is reasonably suited by reason of education, training, or experience.”
Subsection 35(1) provides as follows:
35. (1) If an application indicates that the applicant may qualify for two or more of the income replacement benefit, the non-earner benefit and the caregiver benefit under Part II, the insurer shall, within 10 business days after receiving the application, give a notice to the applicant advising the applicant that he or she must elect, within 30 days after receiving the notice, the benefit he or she wishes to receive. [Emphasis added.]
As stated in paragraph 29 of Galdamez v. Allstate Insurance Company of Canada, 2012 ONCA 508 (CanLII), 111 O.R. (3d) 321 (CA) (“Galdamez”), an insured’s status as an employed person does not in itself establish that the insured is ineligible for the NEBs. Case Law suggests that if the insurer knew or ought to have known that the applicant may have been eligible for the IRB or the NEB (through the adjusting of the file), the insurer has a positive obligation to provide the applicant with an election form.12
Non - Earner Benefits
Under the SABS, the applicant may qualify for non-earner benefits if (1) they were unemployed or retired at the time of the accident or (2) were a full-time student or a recent graduate at the time of the accident. In addition to being unemployed, a student, or a recent graduate, the applicant must be found to suffer a “complete inability to carry on a normal life” as a result of and within 104 weeks after the accident.
For accidents that occurred prior to June 1, 2016, the non-earner benefit is payable six months after the date of your accident (the “waiting period”). After the waiting period and for up to two years post-accident, you will receive $185 per week. You may continue to receive the weekly $185 benefit two years after the accident provided you suffer “a complete inability to carry on a normal life” as a result of your accident-related injuries. This benefit is available for life for individuals over 16 years of age, with a set formula ramping down the benefit at age 65.
For accidents that occurred after June 1, 2016, the non-earner benefit of $185 per week is payable after a four week waiting period to a maximum of two years post-accident.
For accidents that occurred shortly after June 2016, the date of policy renewal is very important due to the substantial difference in NEBs payable.
Part 7: Caregiver
For applicants who are determined to be Catastrophically impaired, Caregiver Benefits are payable (without a waiting period), if the applicant is substantially unable to continue caregiving activities. These benefits are payable at maximum of $250 per week for the first person, plus $50 for each additional person in need of care. After two years, the applicant must be found to be suffering a complete inability to carry on a normal life to continue to qualify for these benefits. This benefit terminates once children attain age 16 or the person needing care no longer needs it. There is no adjustment at age 65. An applicant is not entitled to Caregiver Benefit if they are entitled to either IRBs or NEBs.
Part 8: Income Replacement Determination
Under the new SABS, the applicant (before age 65) is entitled to 70% of their gross income till a maximum of $400.00 per week (after a one week waiting period) subject to deductions with respect to any collateral benefits received. There is a downward slope with respect to IRBs for applicants whose date of loss was before their 65th birthday, after age 65. Applicants over the age of 65 at the date of loss who qualify for IRBs are only entitled to a total of 4 years (208 weeks) of this benefit, with the amount payable being decreased by a set factor every year.
If an applicant temporarily returns to work within the 104 weeks but then is unable to continue their employment or self-employment, they may be entitled to a resumption of benefits.
Part 9: Other Insurance or Collateral Benefits
Sections 268(6) and (7) of the Insurance Act states that the benefits available under the SABS are excess insurance to any other insurance indemnifying the injured person or in respect of a deceased person for expenses.
“Other income replacement assistance”, as defined in section 4(1) of the SABS are 100 per cent deductible from the IRB calculation. Generally speaking, Canada Pension Plan disability benefits, short-term and long-term benefits are deductible from IRBs. Severance and retirement allowances are not deductible.
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Pre-accident EI benefits that continue post-accident (including EI-maternity13) may be deductible from IRBs (at 70 per cent) as they are considered “gross employment income”. Post-accident EI (including EI-sickness benefits) is specifically excluded from “other income replacement assistance”. Note that eligibility for EI regular benefits suggests that a person is ready, willing and capable of working each day which is in direct contrast to the spirit of IRBs. As such an applicant may be required to pay back EI benefits to the government, in which case the applicant is entitled to IRBs sans deduction.
An insurer may also deduct “temporary disability benefits” from IRBs or NEBs if the benefit is received after the accident due to an impairment that occurred before the subject accident, pursuant to section 47(1) of the SABS. Temporary disability benefits are defined in section 47(3) as IRBs or NEBs, caregiver benefits, EI benefits, and certain WSIB benefits, depending on the date of the injury and the applicable legislation.
Ontario Disability Support Program benefits are not deductible from NEBs. Section 60 (1) of the SABS states:
The insurer shall pay benefits described in this Regulation even though the insured person is entitled to or has received social assistance or similar payments, services or benefits under an Act of the Legislative Assembly or under similar legislation in another jurisdiction.
However, the Ministry of Community and Social Services, which administers ODSP benefits, is entitled to reduce ODSP benefits by the NEB amount. This avoids the double compensation problem. In fact, most insureds are required to authorize an assignment of benefits back to ODSP, specifically referenced in section 62(2) of the SABS.
Closing Remarks
The Application for Accident Benefits (OCF-1) gives us a glimpse of potential issues that may unravel in the adjusting of a claim and a thorough review of same allows pro-active management of the claim. The above information is merely a primer to assist in deciphering the complexities that may be encountered from the very inception of a claim. Please note that each claim has different and all decisions made with respect to any claim in questions must be based on its own unique facts.
1 17-000456/AABS v. Aviva Insurance Canada, 2018 CanLII 81897 (ON LAT).
2 16-004349 v “Mr. P”, 2017 CanLII 148395 (ON LAT)
3 FSCO A03- 000956, May 3, 2005
4 Aviva Insurance Canada v 17-004352, 2018 CanLII 39447 (ON LAT)
5 16-000218 v Aviva Insurance, 2017 CanLII 56680 (ON LAT)
6 16-000131 v TD Insurance Meloche Monex, 2017 CanLII 43837 (ON LAT)
7 https://www.fsco.gov.on.ca/en/auto/autobulletins/archives/Documents/a-09_92-1.pdf
8 Provided that motorcycles or motorized snow vehicles are the only types of automobile insured under the policy.
9 Provided that the automobile is used primarily to transport materials, goods, tools or equipment.
10 However, it should be noted that receipt of EI benefits does not qualify towards this 26 weeks total when the employment relationship had ceased. This was confirmed in Vega and Certas (FSCO A12-001531).
11 EI waiting period does not qualify as being in receipt of EI benefits. See Kazimierczuk and Pembridge Insurance Company (FSCO Appeal P16-00057)
12 See the decision of Adjudicator Marzinotto in 16-000063 v. The Dominion of Canada General Insurance Company, 2016 CanLII 67139 (ON LAT). In this case, the applicant’s OFCf-3 listed that he was self-employed even though his OCF-1 listed him as unemployed.
13 See 17-005302 v Aviva Insurance Company of Canada, 2018 CanLII 83535 (ON LAT)
