Accident Benefits Disputes Require Notification to the Other Insurer and the Claimant Within 90 days
Unifund Assurance Co v Dominion of Canada General Insurance Co, 2016 ONSC 4337
This case arose when an insured, who owned and operated an automobile repair shop, was injured in a motor vehicle accident while riding in a customer’s vehicle. The insured applied to his own insurance, Dominion Insurance, rather than the insurance of his customer, Unifund Insurance, for statutory accident benefit coverage under OCF-1. Dominion paid accident benefits to the insured.
Dominion then delivered a notice of dispute between insurers to Unifund, claiming that Unifund was responsible for the accident benefit coverage. Dominion delivered this notice within the 90-day time limit. However, Dominion did not deliver a notice to the insured until 17-months later.
This case was an appeal of Arbitrator Shari L Novick’s decision. In that decision, the Arbitrator found that the 90-day limit to advise another insurance company of a dispute regarding payment of statutory benefits does not apply to notifying the insured of the dispute. Novick found that although Regulation 283/95 of the Insurance Act required insureds to be notified of the dispute, the insureds need not be notified within 90 days of the dispute like the insurance company. Novick indicated that the transfer between insurance companies is more of a procedural question to which claimants will rarely object. As such, the adjudicator found that Dominion was not precluded from bringing their dispute despite their late notice to the insured about the dispute.
On appeal to the divisional court, Justice Faieta disagreed with the arbitrator’s position. Faieta interpreted the Insurance Act Regulation to mean that the 90 day time limit to notify the insurance company also applied to the insured. Faieta argued that an insured is given certain rights under the Regulation, including the rights to participate and object to any proceeding to settle a dispute. Therefore, it would not make sense not to apply the time limit to notify the insured, because the dispute may have passed before the insured is made aware. Faieta held that the Regulation must be interpreted in a way that does not render ineffective the rights given to an insured to object to transfers of their claim to another insurer.
What the Insurer Should Know
The 90 day limit to provide a notice of dispute to another insurer also applies to providing notice to the insured.