November 5, 2012

Requesting an Insurer Examination: Time is of the Essence

Requesting an Insurer Examination: Time is of the Essence

Baki v. Zurich Insurance Company Ltd., FSCO A11-000973, September 12, 2012, Arbitrator Jessica Kowalski

MVC April 7, 2008. Zurich brought a motion to compel Baki to attend four post-104 insurer examinations (IE) and requested an adjournment of the Arbitration.

An Application for Mediation claiming entitlement to post-104 Income Replacement Benefits (IRB) was submitted on March 29, 2010. Mediation was held on January 24, 2011 and failed. An Application for Arbitration was filed on March 21, 2011. On December 21, 2011, the parties participated in a global mediation. On February 15, 2012, the parties participated in a pre-hearing at the Commission.

 

On May 3, 2012, Zurich wrote to Baki’s counsel enquiring as to whether Baki would be available to attend 4 IEs. Counsel for Baki advised Zurich that Baki would not be attending those examinations. Zurich cancelled the assessments and sent no notices of examination to Baki.

 

At the motion in September 2012, Zurich claimed a change in circumstances necessitated the assessments and adjournment. In particular, Zurich argued Baki had been diagnosed with chronic pain syndrome in the past year, which represented new medical information and a new diagnosis that entitled it to new assessments. The Arbitrator noted no new medical reports were served on Zurich after the global mediation in December 2011.

 

The Arbitrator noted Section 44 of the SABS authorizes IEs as often as is reasonably necessary for the purpose of determining whether an insured person is entitled to a benefit. Subsection 44(5) sets out notice requirements if an insurer requires an examination under section 44. The May 3, 2012 letter failed to set out reasons for the IE, as is required under subsection 44(5) of the SABS, and made no reference to adjusting the claim. The Arbitrator concluded Zurich had ample notice Baki was claiming IRBs beyond the 104 week period. Even if Zurich had no notice until the pre-hearing in February 2012, had Zurich taken reasonable steps to arrange for examinations, there would still have been time for Baki to attend the assessments and arrange for rebuttal reports without jeopardizing the hearing date.

 

Zurich had a prima facie right to require Baki to be assessed after the test for IRBs changed. However, “insurer examinations should be requested as early as reasonably possible and that motions brought after the pre-hearing will receive close scrutiny.”

 

The Arbitrator concluded:

 

While a section 44 assessment may be required in the name of fairness when an insured person discloses a new expert report on some material issue in dispute, an insurer cannot wait until just before an arbitration or trial, several months after the report has been disclosed and the insured has made it clear that they have been seeking a particular benefit, to request a section 44 assessment in the name of fairness. Even if it only became clear to Zurich between December 2011 and February 2012 that ongoing IRBs were a live issue or that Mr. Baki was disabled because of chronic pain, Zurich did not address the issue in a timely way.

The timing of the requests and inactivity before and after May 3, 2012 suggest that the dominant purpose of the assessments is indeed to buttress Zurich’s case for arbitration.

Implications:

 

Although insurer’s have the right to IEs pursuant to section 44 of the SABS, that right must be balanced against the insured’s right to an expeditious and speedy resolution of their claim. Where the two conflict, and the insured could have obtained IEs had they acted expeditiously, their request should be denied.

 

Accessing This Decision

If you would like to read the adjudicator’s decision for yourself, it can be found at www.fsco.gov.on.ca. If you have questions or comments about this post, contact info@md-lawyers.ca