Fraudulent pink insurance slip supplied by fraudster not enough to establish accident benefits: FSCO

The Financial Services Commission of Ontario (FSCO) has identified at least one instance in which a fraudulent pink insurance slip does not represent enough of a “nexus” between an insured and an insurance company to trigger an accident benefits payout.
The key factor appears to be whether the person supplying the fraudulent pink slip is in fact the fraudster (in which case benefits are not owing) or the victim of a fraud perpetrated by someone else (in which case benefits are owed to the insured).
FSCO’s decision comes in the wake of a June 2009 FSCO decision in Vladmir Danilov and Unifund Assurance Company and Economical Mutual Insurance Company, which found that a fraudulent pink insurance slip was enough of a “nexus” between an insured and an insurer to trigger a benefit payout by the first insurer.
In Danilov, the person providing the fraudulent pink slip was the unsuspecting dupe of someone purporting to represent a brokerage firm.
But in Raheel Ahmed and Royal & SunAlliance Insurance Company of Canada, the person supplying the fraudulent pink slip did not actually believe that he was insured with Royal, wrote FSCO arbitrator Anne Sone.
Sone further found that Ahmed may in fact have made up the brokerage that supposedly provided him the slip.
“Mr. Ahmed’s failure to prove the existence of his ‘phantom broker’ and his inability to prove that he had actually paid for insurance coupled with his complete lack of credibility lead me to conclude that no reasonable person objectively would believe Mr. Ahmed had a policy with Royal,” she wrote.
“Based on the case law, only in extreme cases, where the connection with the insurer is totally arbitrary, should an insurer refuse to pay” accident benefits, Sone wrote. “In my view, this is one of those extreme cases.
“As Royal stated in its submissions, the situation here is akin to pulling the name of an insurer out of a hat.”