Insurer not licensed in Ontario still subject to accident benefits loss transfers, rules Court

The Ontario Superior Court has allowed the appeal of an arbitration and decided the word “insurer” has the same meaning in Part VI of the Insurance Act as set out in Section 1 of the Act for the purposes of accident benefits loss transfer.
Economical Mutual Insurance Company v. Liberty Mutual Fire Insurance Company hinges on whether or not an insurer who is not licensed in Ontario can be subject to accident benefits loss transfers.
In Oct. 1999, a truck owned by Landstar Systems Inc. and bearing Illinois license plates rear-ended a car operated by Brenna Harrington, who was insured by Economical Mutual. Harrington suffered injuries in the collision. Economical Mutual has paid accident benefits of more than Cdn$362,000 to date. As Harrington is claiming lifetime disability, there is a potential for significant future accident benefits payments, Justice Wailan Low wrote.
Landstar Systems Inc. has coverage under Liberty Mutual, which is not licensed to undertake automobile insurance in Ontario, and it has not filed an undertaking under s. 226.1 of the Insurance Act, Justice Low noted.
If “insurer” is given the meaning urged by Liberty Mutual, s. 226.1, “the result would be tautologous and logically nonsensical,” she wrote. “Another logical absurdity results if the respondent’s construction of the word “insurer” is applied to ss. 267.5(1) and (6) of the Act,” she added.
“I would conclude, therefore that since the construction of the word “insurer” urged by the respondent results in absurdities when tested in the context of various provisions of Part VI and as the construction of the word as defined in s.1 results in no lack of logic and no violence to the legislative intent of the Act if applied to s. 275, the legislature did not intend, for purposes of Part VI, that the word “insurer” have a meaning different from that expressly set out in the definition section.”