Auto insurers: Dos and don’ts for sending out IE notices

Ontario auto insurers don’t have to send out requests for independent medical exams (IME) at the same time they send out claim denial letters, nor are they barred from requesting IMEs after claimants have applied to the Licence Appeal Tribunal (LAT) to challenge denials.

But insurers must take care they are sending out their IME forms to the proper contacts, and that the medical reasons for denying the claim are clear, lest they run the risk of putting their legal position in jeopardy, as suggested in a LAT decision released Friday.

In Ritchie v Aviva Insurance Canada, Melissa Ritchie was involved in an auto accident in February 2014.  In May 2021, she submitted a treatment and assessment plan (an OCF-18 form) to her insurer, Aviva Canada, for almost $34,000 in home modifications. Aviva sent a denial letter to Ritchie on June 4, 2021, finding she took too long to make her claim.

On June 21, 2021, Aviva sent a notice requiring Ritchie to attend a medical examination (otherwise known as an insurer examination, or IE) scheduled for June 28, 2021.

Ritchie filed an application to LAT to dispute Aviva’s denial of her claim on June 24, 2021. She did not attend the IE on June 28, 2021.

Aviva sent out a second IE notice to Ritchie on July 14, 2021, requesting her to attend an IE scheduled for July 29, 2021. One day later, Ritchie’s lawyer sent Aviva the following email:

“This will advise that my client will not be attending the Insurer Examination. The Explanation of Benefits sent June 4 did not request an IE, so it is clear that Aviva did not require any additional information to make its decision to deny your insured her benefits. It was not until after the LAT application was filed before the Notice was provided. Given that the insurer had clearly stated its denial prior to the LAT application being filed, it appears clear that this examination has been requested for the purpose of litigation and is therefore an improper abuse of process.”

On July 20, 2021, Aviva sent Ritchie’s lawyer an email informing him that the fax requesting the initial IE was sent on June 21, 2021 (three days before Ritchie filed her application with the LAT). Aviva attached a fax confirmation, but Ritchie’s lawyer observed the fax number on the confirmation was incorrect.

On Aug. 11, 2021, Aviva sent Ritchie’s counsel a third notice of examination, scheduled to take place on Sept. 9, 2021. Ritchie’s lawyer informed Aviva Ritchie would not be attending that IE either.

The LAT ultimately rejected Ritchie’s claim. It noted Aviva was obligated to collect information to maintain its file on Ritchie’s health, and it was not obligated to send out an IE request along with its initial claim denial letter.

Also, the tribunal observed, Ritchie was required to attend the IEs, as long as Aviva was sending out legally valid IE requests. Aviva was not barred from sending out IE notices even though Ritchie had already applied to LAT to challenge the denial.

“[Ritchie] has not put forward a reasonable explanation for her non-attendance at the IEs,” LAT ruled. “I find this to be unreasonable. Just as much as the insurer has a duty of good faith to adjust the claim and provide [Ritchie] with medical and any other reasons why the IE is required, I find [Ritchie] has a duty to cooperate with [Aviva] where the IE notice is compliant.  Refusing to attend the rescheduled IEs frustrated [Aviva’s] respondent’s ability to assess the applicant.”

However, not all of Aviva’s IE notices were compliant, LAT found. The first one was found to be deficient, whereas the second and third notices were compliant. Ultimately, LAT found the second and third notices made up for the deficiencies in the first notice.

“The reasons [for denying the claim in the first IE notice] do not mention [Ritchie’s medical] conditions, which forms the basis for the insurer’s decision,” LAT ruled. “Nor does it identify the information about the insured’s condition that the respondent requires but does not have. The benefit in dispute is not mentioned. I find that the reasons [in the first IE notice] are vague.”

Feature image courtesy of iStock.com/FatCamera