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Insurance - Auto - Indemnification Between Insurers. Primmum Insurance v. L’Unique Assurances Générales
In Primmum Insurance v. L’Unique Assurances Générales (Div Court, 2022) the Divisional Court reviews some auto insurance SABS law that applies to indemnification between insurers:Statutory and Regulatory Framework
[21] An insurer paying SABs is entitled, in certain circumstances, to indemnification from another insurer for benefits paid. Subsection 275(1) of the Act provides:The insurer responsible under subsection 268(2) for the payment of statutory accident benefits to such classes of persons as may be named in the regulations is entitled, subject to such terms, conditions, provisions, exclusions and limits as may be prescribed, to indemnification in relation to such benefits paid by it from the insurers of such class or classes of automobiles as may be named in the regulations involved in the incident from which the responsibility to pay the statutory accident benefits arose. [22] The wording of s. 275(1) makes it clear that entitlement to indemnification is not absolute; it is “subject to such terms, conditions, provisions, exclusions and limits as may be prescribed”. Some of the terms and conditions, etc. are set out in the balance of s. 275. For example, the fault determination rules apply to indemnification for the first $2,000 of SABs paid (ss. 275(2) and (3), respectively).
[23] Other terms and conditions, etc. are prescribed by a regulation pursuant to the Act (“Automobile Insurance”, R.R.O. 1990, Reg. 664 (“the Regulation”)). Section 9 of the Regulation provides definitions for some of the terms that appear in section 275 of the Act. In addition, section 9 sets out the criteria for entitlement to indemnification. Only when those criteria are met is an insurer paying SABs entitled to indemnification from another insurer.
[24] In s. 9(1) of the Regulation, a “first party insurer” is defined as “the insurer responsible under s. 268(2) of the Act for the payment of statutory accident benefits”. The insurer required to indemnify a first party insurer pursuant to section 275 for SABs paid is defined by s. 9(1) of the Regulation as the “second party insurer”.
[25] The circumstances in which a first party insurer is entitled to indemnification from a second party insurer for SABs paid are set out in ss. 9(2)(a) and (b) of the Regulation. For the purpose of the indemnity dispute between Primmum and L’Unique, only s. 9(2)(a) is relevant. It provides:A second party insurer under a policy insuring any class of automobile other than motorcycles, off-road vehicles and motorized snow vehicles is obligated under section 275 of the Act to indemnify a first party insurer,
(a) if the person receiving statutory accident benefits from the first party insurer is claiming them under a policy insuring a motorcycle and,
(i) if the motorcycle was involved in the incident out of which the responsibility to pay statutory accident benefits arises, or ...
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