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Insurance - Auto - Benefits. Zabarain v. Coseco Insurance Company
In Zabarain v. Coseco Insurance Company (Ont Div Ct, 2026) the Ontario Divisional Court considered an insurer's discretionary payment of a medical benefit under SABS s.38(2) ['Claims for medical and rehabilitation benefits and for approval of assessments, etc.']:Issue #1: Did the Adjudicator err in law in finding that the Insurer’s payment of the hospital expense as a medical benefit without receipt of a treatment and assessment plan and without notice did not violate the SABS ?
[28] Being a foreign student the Appellant did not have OHIP coverage and had not paid the hospital for the services that it had rendered as a result of the accident. On December 9, 2019, the Insurer paid $53,700 to the hospital after having received the hospital’s invoice. It is unclear how this invoice came to the attention of the Insurer. The Insurer paid this hospital expense after it confirmed that the Appellant’s travel insurance policy, which provides emergency medical coverage, only provides coverage once the limits of the accident benefits policy were exhausted.
[29] The Appellant submits that the Insurer’s payment of the hospital expense violated sections 38 and 39 of the SABS on the basis that he had not submitted a treatment and assessment plan in respect of this expense and the insurer failed to notify him of its intention to pay this expense.
[30] The Insurer submits that sections 38 [SS: 'Claims for medical and rehabilitation benefits and for approval of assessments, etc.'] and 39 [SS: 'If no treatment and assessment plan required'] of the SABS do not apply. Treatment and assessment plans are for future expenses that are medical benefits. The Insurer submits that it appropriately issued payment for the hospital expenses incurred by the Insured once it received that invoice and that there was no need for a treatment and assessment plan, or in its place, notice that the insurer would be paying certain future medical expenses, given that the hospital expense had already been incurred
[31] Section 14 of the SABS provides that, except as otherwise provided in the Regulation, an insurer is liable to pay medical and rehabilitation benefits to or on behalf of an insured person who sustains an impairment as a result of an accident.
[32] Clause 15(1)(a) of the SABS provides that “subject [to the monetary limits] in section 18, medical benefits shall pay for all reasonable and necessary expenses incurred by or on behalf of the insured person as a result of the accident” for, amongst other things, medical, surgical and hospital services. [Emphasis added]
[33] Subsection 38(2) of the SABS states that an insurer is not liable to pay a medication or rehabilitation benefit without a treatment or assessment plan unless certain exceptions are applicable such as the insurer providing notice to the insured that it will pay such expense. Subsection 38(2) states:An insurer is not liable to pay an expense in respect of a medical or rehabilitation benefit or an assessment or examination that was incurred before the insured person submits a treatment and assessment plan that satisfies the requirements of subsection (3) unless,
(a) the insurer gives the insured person a notice under subsection 39 (1) stating that the insurer will pay the expense without a treatment and assessment plan;
(b) the expense is for an ambulance or other goods or services provided on an emergency basis not more than five business days after the accident to which the application relates; or
(c) the expense is reasonable and necessary as a result of the impairment sustained by the insured person for,
(i) drugs prescribed by a regulated health professional, or
(ii) goods with a cost of $250 or less per item. [Emphasis added] [34] Section 39 states:(1) This section applies to a claim for a medical or rehabilitation benefit or an application for approval of an assessment or examination under section 38 if the insurer gives the insured person a notice informing the insured person that the insurer will pay the expenses without the submission of a treatment and assessment plan under that section. O. Reg. 34/10, s. 39 (1).
(2) If the insurer gives the insured person a notice under subsection (1),
(a) the notice must describe the expenses that the insurer will pay without the submission of a treatment and assessment plan and shall specify,
(i) the types of expenses,
(ii) any restrictions on the amount of the expenses, and
(iii) any restrictions on when the expenses are to be incurred;
(b) the insurer shall comply with the requirements set out in any applicable Guideline if the notice is given in connection with a proposal, recommendation or suggestion that the insured person receive goods or services from a person named by the insurer;
(c) the insurer shall pay expenses described in the notice within 30 days after receiving an invoice for them; and
(d) the insurer shall, if there is a dispute described in subsection 280 (1) of the Act about whether for the purposes of subsection 15 (1) or 16 (3) an expense described in the notice is reasonable or necessary, or whether for the purposes of clause 15 (1) (h) or 16 (3) (l) an expense described in the notice is essential, pay the expense pending resolution of the dispute. O. Reg. 34/10, s. 39 (2); O. Reg. 44/16, s. 3. ....
[36] As noted by the Adjudicator, the purpose of sections 38 and 39 is to provide for “… a consistent and efficient claims process to ensure that an insurer is timely with its decisions and [that it] does not pay for goods and services that are not reasonable or necessary”.
[37] The requirements in sections 38 and 39 of the SABS address the methods for obtaining the insurer’s approval for future medical and rehabilitation expenses. The language used in those sections reflect the prospective nature of such medical and rehabilitation services. Section 38 provides for the use of a treatment and assessment plan submitted on behalf of the insured to obtain the insurer’s approval for such expenses. Section 39 provides that, in the absence of a treatment and assessment plan, the insurer may provide notice to the insured on the terms on which it will pay for future medical and rehabilitation services. In this case, sections 38 and 39 of the SABS do not apply as the hospital expense paid by the Insurer had already been incurred. There is nothing in the Insurance Act or the SABS that prohibits an insurer from paying, pursuant to sections 14 and 15 of the SABS, a medical and rehabilitation expense that has already been incurred that it finds to be a “reasonable and necessary” expense incurred as a result of an accident.
[38] On this appeal, the Appellant raised two further points.
[39] Although the Appellant correctly notes that the SABS are “remedial and constitute consumer protection legislation” (see Arts (Litigation Guardian of) v. State Farm Insurance Co., 2008 CanLII 25055 (ON SC), [2008] O.J. No. 2096, 91 O.R. (3d) 394, at para. 16), it does not give rise to an obligation on the insurer to notify the Insured that it intended to pay the hospital’s invoice.
[40] The Appellant further submitted that the payment of the hospital expense should have been paid by the tort liability insurer (who in this case is the same company as the accident benefit insurer) given that the limits of the coverage for tort liability are much greater than the limits of coverage for medical and rehabilitation benefits. This submission has no merit as it seeks to introduce a strategic and irrelevant consideration to the determination of whether a medical expense that otherwise comes within the scope of coverage under the SABS should be paid.
[41] I find that the Adjudicator did not err in law in finding that the Insurer’s payment of the hospital expense as a medical benefit without a treatment and assessment plan and without notice to the Appellant did not violate the SABS. . Zabarain v. Coseco Insurance Company
In Zabarain v. Coseco Insurance Company (Ont Div Ct, 2026) the Ontario Divisional Court considered the total amounts payable for "medical and rehabilitation benefits" for various levels of injury:The Legal Framework
[16] Section 5 of the Statutory Accident Benefits Schedule – Effective September 1, 2010, O. Reg. 34/10 (“SABS”) provides that an insurer shall pay an income replacement benefit to an employed insured person who sustains an impairment as a result of an accident if the insured person suffers a substantial inability to perform the essential tasks of that employment within 104 weeks of the accident. Pursuant to s. 6(2) of the SABS, an insured person may be entitled to further income replacement benefits following the first 104 weeks after the accident if the insured is suffering a complete inability to engage in any employment or self-employment for which he or she is reasonably suited by education, training or experience.
[17] Sections 14, 15 and 16 of the SABS provides that an insurer is required to pay medical and rehabilitation benefits to a person who sustains an impairment as a result of an accident.
[18] Under s. 18 of the SABS, the maximum amount payable depends on the classification of the injury. If the insured suffers an injury that is predominantly a “minor injury”, then the total amount payable for medical and rehabilitation benefits is $3,500.00 plus HST. If the insured sustained a “catastrophic” impairment, then the total amount payable for medical and rehabilitation benefits is $1 million. If the impairment is neither “minor” nor “catastrophic”, then the total medical and rehabilitation benefits payable is $65,000.00 plus HST. In this case, there is no dispute that limits of coverage for medical and rehabilitation benefits is $65,000.00 plus HST. . Pope v. Pilot Insurance Company
In Pope v. Pilot Insurance Company (Div Court, 2024) the Divisional Court notes the duties that insurers have to advise the insured of their full benefit entitlements:(1) Maximum Benefits
[27] Paragraph 9.1 (3)(2) of the regulation requires the insurer to describe each benefit available to the insured. In Opoku, the Court of Appeal held that this requires a statement of any monetary limits which apply to any particular benefit. It is important to note, however, that since the time that Opoku was decided, the regulation was amended to remove the requirement that the insurer provide a commuted value for benefits that are not payable as a lump sum. The effect of this change was that the notice form no longer needed to be customized precisely to the individual circumstances of each insured. . Landa v. The Dominion of Canada General Insurance Company
In Landa v. The Dominion of Canada General Insurance Company (Div Court, 2024) the Divisional Court [at paras 51-83] illustrates how important it is for SABS-benefit claimants to provide full benefit-justifying information and documentation to the insurer (or as otherwise required) on making such benefit application - both in the correctly-prescribed forms, and in a timely fashion - or else risk having the benefits denied.
. Joaquim v. Intact Insurance Company
In Joaquim v. Intact Insurance Company (Div Court, 2023) the Divisional Court considers "whether automobile insurers can require an insured to undergo a medical examination to determine eligibility for prescription medications claims". In these quotes the court considers procedures for establishing entitlement to benefits, here specifically prescription drug benefits:[1] This appeal from decisions of the Licence Appeal Tribunal (the “LAT”) addresses whether automobile insurers can require an insured to undergo a medical examination to determine eligibility for prescription medications claims.
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Relevant provisions of the Schedule
[10] The Schedule sets out the rules involved with making and administering claims for various categories of statutory accident benefits available to individuals injured in motor vehicle collisions.
[11] The processes for making claims vary depending on the type of benefit being claimed. For instance, the Schedule provides that claims for medical or rehabilitation benefits have different documentary requirements and procedures than claims for attendant care or income replacement benefits. When there is a dispute about entitlement to any benefit, an insured can initiate a proceeding at the LAT to have the matter adjudicated unless they are specifically barred from doing so for reasons outlined in section 55 of the Schedule.
[12] Section 44(1) of the Schedule provides that an insurer can require that an insured be examined by a regulated health professional to assist in determining entitlement to the statutory benefit being claimed. Section 44(3) creates exceptions for benefits payable in accordance with the Minor Injury Guideline, funeral benefits, and death benefits. The exceptions set out in section 44(3) are not applicable in this case.
[13] There is no dispute that failing to attend at an insurer examination under section 44, when properly requested, can bar an application to the LAT pursuant to section 55(1). The issue to be determined on this appeal is whether Intact had the authority to make the request for an examination under section 44 in the first place.
[14] Generally, claims for medical or rehabilitation benefits are submitted in a treatment and assessment plan (OCF-18) that must be approved by the insurer before the claim is paid: s. 38(2). If the insurer does not agree “to pay for all goods, services, assessments and examinations described in the treatment and assessment plan” the insurer may require the insured to undergo an examination under section 44 to determine their entitlement: s. 38(10).
[15] Prescription medications fall under the category of medical or rehabilitation benefits. However, section 38(2)(c) of the Schedule creates exceptions for claims for prescription medication and for claims for goods with a cost of $250 or less per item, which do not have to be submitted as part of a treatment and assessment plan, but rather a less cumbersome expense claim form (OCF-6). Regardless of how the claim is made, entitlement to any benefit in the medical or rehabilitation category depends on whether the expense is reasonable and necessary as a result of the impairment sustained by the insured person.
[16] Section 33 of the Schedule provides the insurer with one mechanism for determining whether a claimed expense is reasonable and necessary. Under section 33, an insurer can request information reasonably required to assist in determining entitlement to a benefit, including requiring the insured to sign a statutory declaration as to the circumstances that gave rise to the application, or submit to an examination under oath. If the information does not support eligibility, is not adequate or, as in this case, is not forthcoming, the remedy is simple – the insurer may deny the claim.
[17] Section 38 of the Schedule sets out the process for applying for medical or rehabilitation benefits. Section 38 specifically permits an insurer to require the insured to undergo a medical examination when there is a dispute involving an expense described in a treatment and assessment plan. There is no such provision with respect to claims that are submitted without the requirement of a treatment and assessment plan, such as claims related to prescription medication and goods under $250. The court further considers [at paras 18-36] the 'last antecedent rule' and insurer examination requests under SABS s.44.
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