Disability Certificate Not Enough to Determine Eligibility for IRB

October 20, 2016 | Ashleigh T. Leon

In an October 3, 2016 preliminary issue hearing (16-000063 v. Dominion of Canada General Insurance Company, 2016 CanLII 67139), Adjudicator Marzinotto of the License Appeal Tribunal allowed an applicant to proceed to a hearing disputing both entitlement to Income Replacement Benefits and Non Earner Benefits. The decision turned on Dominion’s apparent failure to provide the applicant with the required election.

Briefly the facts of the case are as follows:

The applicant was involved in an MVA on November 10, 2013;
She submitted an incomplete OCF-1 to Dominion on January 10, 2014 and a complete OCF-1 on March 28, 2014.  On both OCF-1s the applicant indicated that she was unemployed;
In response to the OCF-1s, Dominion informed the applicant that she may qualify for NEBs and did not qualify for IRBs because she was unemployed;
On October 22, 2014 Dominion received an OCF-3 which confirmed that the applicant qualified for both NEBs and IRBs further indicating that she was self-employed at the time of the accident. Dominion informed the applicant on October 24, 2014 that she did not qualify for IRBs as her OCF-1 indicated she was unemployed.  Insurer examinations were arranged to determine her eligibility for NEBs;
The insurer examinations were completed in November and December 2014.  The assessors concluded that the applicant did not qualify for NEB but during the course of the assessments it was learned that the applicant had an import/export business.  Dominion wrote to the applicant to inform her that while she was ineligible for NEB it believed she qualified for an IRB and required proof of declared income from self-employed in order to calculate the benefit.

During the hearing, the applicant argued that because Dominion had failed to provide her with the required election form, she did not have to make an election. Dominion, on the other hand, argued that because the applicant qualified for an IRB she was not entitled to make an election.

Adjudicator Marzinotto found, consistent with the decision in Galdamez v. Allstate Insurance Company of Canada, 2012 ONCA 508 (CanLII), that the status of an insured as being employed or self-employed does not automatically establish that the insured does not qualify for NEB but instead there is a two prong test for entitlement to IRB, the second prong of which requires the insured to establish that she meets the relevant disability criteria (suffers a substantial inability to engage in the essential tasks of her pre-accident self-employment).  In the case at hand, the Adjudicator held that the applicant had not yet met the second prong of the test for entitlement to IRB as insurer examinations to determine entitlement had not occurred.  This was despite the fact that the applicant had submitted an OCF-3 confirming that she did in fact meet the relevant disability criteria for IRB.

At the end of the day, Adjudicator Marzinotto determined that the submission of the OCF-3 triggered Dominion’s requirement to provide the applicant with an election and since they failed to do so and the applicant had not established entitlement to an IRB she was able to proceed to a hearing to determine entitlement to either benefit.

The reasoning in this decision seems to suggest that entitlement to a specified benefit cannot be determined by the submission of a disability certificate, but instead is not established until insurer examinations have been conducted. This seems at odds with the intention of the relevant specified benefit provision which requires insurers to pay specified benefits within 10 days of receiving the OCF-1 and OCF-3 or arrange insurer examinations.  There is no requirement that an insurer dispute the applicant’s entitlement to a benefit for which the disability certificate indicates she is entitled to.

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