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Ontario’s loss transfer rules can apply to accidents, insurers outside Canada: Appeal Court


November 11, 2010   by Canadian Underwriter


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Ontario’s loss transfer rules can apply to an insurer with operations in the United States in relation to a loss that occurred in the United States, Ontario’s Court of Appeal has ruled in a brief endorsement.
In Primmum Insurance Company and Allstate Insurance Company, a resident of Ontario was injured in a car accident while driving in North Carolina.
Primmum, an Ontario insurer, paid his statutory accident benefits as required under the standard auto insurance policy.
The other driver was at fault and was insured by Allstate under a policy issued in North Carolina.
Under the Ontario Insurance Act’s rules of loss transfer, Primmum served Allstate with notices to participate in arbitration.
Allstate refused to comply with the notices on the ground that it was not an Ontario insurer and the accident did not occur in Ontario. Allstate argued Ontario’s loss transfer scheme did not apply to it.
In its decision, the Ontario Court of Appeal cited the Supreme Court of Canada’s 2003 decision in Unifund Insurance Company of Canada v. Insurance Company of British Columbia.
In Unifund, the Supreme Court noted: “Section 275(4) of the Ontario Act provides that disputes about indemnification are to be resolved by arbitration, pursuant to the Ontario Arbitration Act…There is no doubt that if the appellant were an Ontario insurer, it would be required to arbitrate Unifund’s claim.”
“Allstate is an Ontario insurer,” the Ontario Court of Appeal ruled. “Accordingly, it must arbitrate Primmum’s claim.”