Insurer must pay special award for failing to consider the “totality” of medical evidence: FSCO arbitrator

An Ontario arbitrator has upheld a special award against an insurer in a case involving termination of Income Replacement Benefits (IRB) on the basis of conflicting medical information.
The Economical Mutual Insurance Company appealed an arbitrator’s finding of a special award against the insurer amounting to more than $16,000 in Economical Mutual Insurance Company and Sivakumaru Sinnapu.
Sinnapu was injured in a June 22, 2006 motor vehicle accident and sought statutory automobile accident benefits under the Statutory Accident Benefits Schedule (SABS).
The Economical paid Sinnapu weekly income replacement benefits until it terminated payment effective Jan. 11, 2009.
The insurer ultimately terminated payments based on its view that Sinnapu did not meet the post 104-week IRB disability test of complete inability to engage in any employment for which he was reasonably suited by education, training or experience. This decision was based on conflicting medical evidence before it.
Subsection 282(10) of Ontario’s Insurance Act provides that if the arbitrator finds an insurer has unreasonably withheld or delayed payments, the arbitrator “shall” award a lump sum as a special award.
The insurer appealed the special award on the basis that it had paid the IRBs, and that it had conflicting medical evidence before it, and thus its termination was not “unreasonable.”
FSCO Director’s Delegate Lawrence Blackman ruled, on the other hand, that special awards are based on particular facts in the case. In this situation, Blackman found, the insurer had not considered the “totality” of the medical evidence before terminating benefits.
Blackman examined a body of case law on special awards and concluded:
“I do not find that these cases set out as a general proposition that an insurer’s deference to the opinions of its own assessors, or any endeavor whatsoever by an insurer to resolve conflicting medical information, is a full answer to any submission that the insurer unreasonably withheld benefits.
“Nor am I persuaded that these cases stand for the proposition that an insurer can simply rely on selected reports, ignoring the totality of the evidence.
“Rather, I find that these cases underline the ‘rationality’ principle discussed in Persofsky, “the need to relate the particular facts of the case to the underlying purposes of the legislation [emphasis added].”