May 3, 2021 by David Gambrill
Ontario’s Licence Appeal Tribunal (LAT) has ordered a cost award of $8,598.95 against Security National Insurance Company for failing to confirm receipt of an auto accident victim’s disability certificate and then not replying to her follow-up correspondence for more than a year.
“The [auto insurance] applicant is a vulnerable individual because she was injured in an accident,” LAT adjudicator Rebecca Hines wrote in A.J. v. Security National Insurance Co., released Apr. 30. “I am not commenting on whether she met the test for entitlement to NEBs [non-earner benefits] when the updated OCF-3 [disability certificate] was submitted, as no evidence is before me to confirm same.
“However, the OCF-3, which the [insurer] ignored, supported that she suffered a complete inability to carry on a normal life, which is a serious impairment. The [insurer] should have taken the OCF-3 more seriously and had a duty to respond promptly.”
The insured, cited in the case decision as “A.J.,” was injured in an automobile accident on May 27, 2016, and sought accident benefits payments from Security National. Whether or not she was entitled to receive the non-earner benefits was not under review by LAT in this decision. The tribunal was only asked to consider whether A.J. was entitled to a cost award because Security National had unreasonably withheld benefits and whether LAT had the jurisdiction to determine bad faith awards. (It did not, Hines confirmed.)
About two weeks after being involved in an auto accident, on June 13, 2016, A.J. submitted a disability certificate (OCF-3) to Security National. The certificate supported her contention that she had suffered a complete inability to carry on a normal life and therefore met the test for an NEB.
However, at that time, A.J. did not qualify for payment of the NEB. Under Ontario regulations, an insured is not entitled to an NEB for the first 26 weeks following the onset of disability. In this case, A.J. wasn’t eligible to claim the NEB until Nov. 27, 2016.
More than two months before A.J.’s eligibility date, on Sept. 16, 2016, Security National requested that A.J. submit an updated OCF-3 by Oct. 11, 2016. The insurer’s letter stated that an updated OCF-3 was required in order to determine A.J.’s entitlement to NEBs. She did not reply to Security National’s letter.
On Nov. 4, 2016, the insurer advised A.J. that her entitlement to NEBs was suspended because she had failed to submit an updated OCF-3 by the deadline. She was also advised that three in-person insurer’s examinations (IEs) were scheduled to help determine: 1) her eligibility for NEBs, and 2) whether her impairments fell within the province’s Minor Injury Guideline.
A.J. wrote back to the insurer, saying its notice of the IEs did not conform to regulations because it did not state the medical reasons why the IEs were necessary. During the tribunal, Security National argued that it did not have to provide its medical reasons for the IEs because the date of the auto accident pre-dated the change in regulations that required the medical reasons to be provided.
A.J. supplied her updated OCF-3 form to the insurer on Nov. 28, 2016.
A.J.’s counsel followed up with Security National in correspondence dated Dec. 20, 2016, Feb. 1, 2017, Aug. 17, 2017, and Feb. 13, 2018. Security National did not respond to this correspondence or acknowledge receiving the updated OCF-3, Hines found.
A preliminary tribunal hearing was held to determine the issue of whether A.J. had to attend the IEs required by the insurer. The tribunal held that A.J. could proceed with her claim for NEBs because the insurer did not provide medical reasons, although the insurer’s request for the IEs was reasonable. At that time, the insurer issued A.J. an NEB payment for $28,663, plus interest, for the period between Nov. 28, 2016, and June 16, 2019.
A.J. went to the tribunal to seek an award for how Security National handled the claim, citing an unreasonable delay in providing the benefits.
“I find the [insurer] took an unreasonable and stubborn approach in its handling of [A.J.’s] claim for a NEB,” Hines wrote in her reasons. “First, it suspended payment of [A.J.’s] NEBs prior to her being eligible to claim the benefit. Second, when [A.J.] submitted the [updated] OCF-3, the [insurer] never acknowledged receiving it, and ignored several requests made by [A.J.] requesting confirmation and updates on the status of payment.”
What’s more, Hines found that A.J.’s request to the insurer to postpone the IEs was reasonable, because it was possible that the updated OCF-3 in November would not support A.J.s contention that she was entitled to NEBs.
“Therefore, the IEs may not have been required at all,” Hines wrote. “In my opinion, since [A.J.] demonstrated that she was trying to cooperate with the [insurer’s] request, [Security National] should have showed more leniency rather than automatically holding her in non-compliance.”
Feature image courtesy of iStock.com/BrianAJackson