Failure to Submit OCF-3 Acts as Complete Bar from Appealing Insured’s Refusal to Pay IRBs By Michelle Isenstein

Oct 11, 2019

In  JV and TD Insurance Meloche Monnex, the Applicant applied to the LAT after his insurer denied his claims.

The insurer, TD, raised a preliminary issue which if accepted, would preclude the Tribunal from hearing the Applicant’s appeal: the insured failed to provide his insurer with a Disability Certificate (“OCF-3”). As a result of this issue, TD’s motion to preclude the appeal was allowed and the Applicant’s request for relief from forfeiture was denied.

In bringing this motion, TD asserted that there was no evidence to substantiate any claim by the insured that he submitted an OCF-3 before his case conference, 2.5 years (or 139 weeks) after the accident. This was considerably later than the prescribed 104-week period.

Since the Applicant submitted his OCF-3 at this point in time, in effect, he advanced a post-104 claim for benefits without first satisfying pre-104 week entitlement. This omission denied TD any reasonable opportunity to assess the insured pursuant to s. 44 of the Schedule, as any IE obtained post-104 weeks would not assist in determining whether the insured was disabled in the pre-104 week time frame.

TD argued that this is not contemplated under the Schedule and the failure to submit an OCF-3 and thus complete his IRB application within 104 weeks should act as a complete bar to any proceeding.

These arguments were upheld by Adjudicator Ferguson. He held that the failure to submit an OCF-3 was not merely a technical breach or error. Further, cases provided by the Applicant which were decided in the alternative were distinguishable from this case on the facts. For example, in one case  there was evidence that an OCF-3 was submitted and the insurer misplaced it, and in another case an insured submitted the form 3 times, was repeatedly challenged on it, and it was determined that the requisite evidence was available elsewhere.

The Applicant attempted to rely on S. 129 of the Insurance Act for relief from forfeiture. The factors for this are set out in Kozel:

1. the conduct of the Applicant;

  • On this factor, the Applicant argued that the Schedule is consumer protection legislation. Adjudicator Ferguson held that the purpose of the legislation does not relieve individuals from their duty to comply with this law or from meeting requirements for making insurance claims. The onus is on Applicants to establish entitlement to benefits and the failure to comply with the prescribed process is not minor.

2. the gravity of the breach, based on the nature of the breach itself and the impact of that breach on the rights of the other party; and

  • The Adjudicator held that this breach was not minor as the insurer did not have access to  all of the information that would be contained in the OCF-3.

3. the disparity between the value of the property forfeited and the damage caused by the breach, which requires a comparison between the loss of coverage and the extent of the damage caused by the insured’s breach.

  • Here, the Applicant argued that his loss of coverage would be significant. The Adjudicator held that there would be prejudice against the insurer being unable to conduct meaningful IEs 3+ years after the accident. Further, using relief from forfeiture to allow this appeal would expose the insurer to expenses of further proceedings and IEs.

This case demonstrates that when read together, s. 5(1)(1) and s. 36(2) and (3) set out a mandatory requirement that insured persons must meet the relevant disability test within 104 weeks after their accident and will not be entitled to receive IRBs before providing their insured with a completed OCF-3. 

Michelle Isenstein is the author of this blog and an articling student at the firm. If you have a question about this decision or a similar file, please contact Michelle or Patrick Baker, (416-777-5227) who was counsel on the file. 

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