C O R R E C T I O N from Source — Insurance Bureau of Canada

In the news release, the Insurance Bureau of Canada (IBC) Applauds Government on Auto Insurance Review, issued today by the Insurance Bureau of Canada over CNW, we are advised by the company that in the third paragraph, the first sentence, “insurers” should be “consumers”. The complete, corrected release follows:

Insurance Bureau of Canada (IBC) Applauds Government on Auto Insurance Review

Consumers should remain the focus of the review and eventual reforms

EDMONTON , Dec. 18, 2019 /CNW/ – Today, the Alberta government announced the creation of an advisory committee that will review options to fix the auto insurance system. The advisory committee will report back to the government in the spring 2020.

Insurance Bureau of Canada (CNW Group/Insurance Bureau of Canada)
Insurance Bureau of Canada (CNW Group/Insurance Bureau of Canada)

“IBC and the insurance industry have heard loud and clear from consumers that Alberta’s auto insurance system isn’t working,” said Celyeste Power, Vice-President, Western, IBC. ” Alberta’s 3 million drivers have said they want more affordable premiums, more choice and care they can count on when they need it. We encourage all stakeholders that participate in the government’s review to focus on what consumers want and, frankly, deserve.”

IBC, on behalf of Alberta’s auto insurers will participate in the consultation process. In these discussions, IBC will focus on what they have heard from consumers, which show*:

  • 69% of Albertans agree that insurers should be more innovative, offer more products and do more electronically
  • 87% of Albertans agree that drivers should have more control over their rates based on how they drive
  • 86% of Albertans support improving care and treatment options for people to recover from motor vehicle collisions

The industry is hopeful that the government and stakeholders will come together quickly to find solutions to the issues facing the auto insurance system so that consumers can count on stable premiums in the short-term. IBC will also participate in the review, by providing a submission and offering assistance to the committee.

” Alberta’s auto insurance system used to be the envy of other provinces, working well for over a decade. Unfortunately, increases in payouts for minor injuries has led the average claim size to increase by nearly 10% per year. We want to work with stakeholders to help focus the system on what consumers want and are encouraged that the government is undertaking this important review,” added Power.

SOURCE Insurance Bureau of Canada

Canada: Clarity In Claims Against Adjusters In Their Personal Capacity

Article by Miller Thomson LLP

A recent decision of Justice Perell (Burns v. RBC Life Insurance Co., 2019 ONSC 6977) provides some welcome clarity on the issues of whether insurance adjusters owe a duty of good faith to an insured independent of any duty owed by the insurer and the personal liability of insurance adjusters. Although claims of this nature have diminished markedly in recent times, they remain a concern and a vexing issue for claims adjusters (and the insurers who employ them).

In Burns, the plaintiff sued RBC Life (“RBC”) and two of its employees (the “adjusters”), who administered the disability claim, for a declaration of entitlement under the policy, payment of long-term disability benefits, special damages of $100,000.00 and punitive damages of $1 million. The Statement of Claim pleaded RBC was vicariously liable for the acts or omissions of its employees. One adjuster advised Burns his benefits were terminated after five years of payment, the other denied his internal appeal of termination. The pleadings alleged all defendants (RBC and the adjusters) owed Burns a duty of utmost good faith. The collective conduct of the defendants was alleged to amount to bad faith, negligence and/or negligent misrepresentation.

The adjusters brought a motion to strike the claims against them under Rule 21. Justice Perell summarized the threshold for success of such a motion: On a pleadings motion, there is generally no evidence beyond the pleading and for the purpose of the motion, the court accepts the pleaded allegations of fact as proven, subject to some very limited exceptions. The moving party must show that it is plain, obvious and beyond doubt that the plaintiff cannot succeed with the claim. Matters of law that are not fully settled should not be disposed of on a motion to strike, and the court’s power to strike should be exercised only in the clearest of cases.

The allegations in Burns‘ Statement of Claim are set out in great detail in the decision. With two limited exceptions, the allegations against the adjusters are grouped with those against RBC, collectively as the “defendants”. There were some 38 allegations against the defendants collectively with additional allegations against RBC only. It cannot be said that the allegations were bald-faced or boilerplate pleadings as they contain a reasonable degree of particularity.

In addressing the law with regard to personal liability of employees, officers and directors of corporations, Justice Perell acknowledged that a corporation must act through human agency. The acts of those employed by a corporation or acting on behalf of an corporation are a manifestation of the acts of the corporation. A corporation acts, or omits to act, through its employees and its agents. That, however, is not sufficient to establish personal liability on these individuals. Rather, in order for employees to be liable in tort for conduct in the course of their employment, the Court of Appeal has found1 their actions must be in and of themselves tortious or they must exhibit a separate identity or interest from those of the employer. In other words, the actions have to be the actions of the employee personally, separate and apart from those of their employer. An employee who carries on discussions and makes decisions related to the business carried on by the corporation, acting within the scope of their authority as an agent for the corporation, is simply causing the corporation itself to act and form legal relationships. Those actions are not actions by individuals in their personal capacity and on their own behalf. As a rule of pleading, in order to properly plead a case of personal liability against an employee, the plaintiff must plead a specific cause of action against that individual in their personal capacity.

In order to survive a motion to strike, there must be sufficient particulars pleaded to disclose a basis for attaching liability to the adjusters in their personal capacity. The material facts giving rise to personal liability must be specifically pleaded because an employee is otherwise not personally liable for the acts of their employer unless their acts manifest a separate identity or interest from the employer and the actions of that employee are in and of themselves tortious conduct.

Justice Perell found there were no material facts pleaded which would support a claim against the employees personally and so struck those claims.

Justice Perell helpfully distinguished Sataur v. Starbucks Coffee Canada Inc.,2 in which the Court of Appeal (in reversing the motion judge’s decision to dismiss against two individually named employees) confirmed there is no general rule that an employee acting in the course of their employment cannot be sued personally for breaching a duty of care owed to a customer. In other words, an employer’s vicarious liability does not shield employees from their own tortious conduct. Justice Perell found the adjusters were not relying on vicarious liability as a shield, rather they were relying on Court of Appeal authority which permitted the claims against them to be struck unless their acts manifested a separate identity or interest from the employer and their actions were of themselves tortious. The pleadings as against the adjusters, one in denying the disability claim and the other in dismissing an internal appeal, could attract vicarious liability on RBC, but those actions would not expose the adjusters to personal liability. According to Justice Perell, the allegations in the Statement of Claim simply did not manifest a separate identity or interest of the adjusters and the allegations were not of tortious acts of the adjusters in their personal capacity.

In perhaps the most helpful portion of the decision, Justice Perell addressed the proposition that individual adjusters owe a duty of good faith to the insured and can be found liable for such a breach. This proposition emanated from the contentious decision of Justice Cavarzan in Spiers v. Zurich.3 Justice Perell noted Spiers was rejected in Burke v. Buss,4 a decision of Justice Jennings who specifically found Justice Cavarzan provided no authority for finding an independent duty of good faith on adjusters. Justice Jennings agreed that an employee can be found liable in tort but opined the breach of duty of good faith arose from a contract between the insurer and the insured and was not one for which an employee of the insurer could be sued. To this, Justice Perell added Spiers did not reference the “strong line of authority” from the Court of Appeal which delineates how and when an employee can be individually liable for their tortious conduct when engaged in the activities of the employer. Justice Perell noted he was not bound by Spiers and further stated, in his opinion, Spiers was wrongly decided on the issue of liability of employees. This strong wording will no doubt bring comfort and hopefully closure to the issue despite the absence of appellate rulings. Notably, Justice Jennings had expressed hope the issue would be considered by the Divisional Court.

In sum, the decision in Burns is helpful in providing clarity on the issue of personal liability of employed adjusters, finding Spiers to be wrongly decided. The decision will hopefully put an end to claims against insurance adjusters in their personal capacity (which generally add nothing but time and cost and detract from the real issues). There still may be the odd exceptional case where pleadings will allege sufficient material facts to generate liability of an adjuster in their personal capacity, sufficient to show an adjuster was manifesting an identity separate to the insurer, but those should be extremely rare.

Furthermore, in the context of accident benefits disputes, the Court of Appeal’s decision in Stegenga v. Economical5 held claims against the insurer, including for bad faith/punitive damages, were subsumed in section 280 of the Insurance Act, which confers exclusive jurisdiction on the LAT to resolve disputes in respect of an insured person’s entitlement to statutory accident benefits or in respect of the amount of those benefits. Disputes concerning the amount of benefits, the timeliness of payment of benefits, and the conduct and process of the insurer in providing benefits (the handling or administration of the claim) are disputes in respect of a person’s entitlement to benefits or the amount of benefits which have now been taken away from the courts. As such, claims for bad faith are claims which flow from the denial of benefits and are thus within the exclusive jurisdiction of the LAT, effectively barring further court actions for bad faith.

Although not dealt with by the Court of Appeal in Stegenga, any claims alleged against individual adjusters would also be subsumed in the dispute resolution sections and subject to the LAT, where the parties are the insured person and the insurer.

The combination of Burns and Stegenga significantly narrow the scope of individual adjuster liability and any perceived benefit in pursuing these type of claims.


1 Lobo v. Carleton University, 2012 ONCA 498; Tran v. University of Western Ontario, 2014 ONSC 617.

2 Sataur (Litigation Guardian of) v. Starbucks Coffee Canada Inc., 2017 ONCA 1017.

3 Spiers v. Zurich (1999), 24 O.R. (3d) 726 (Gen. Div.), leave to appeal to Div. Ct. denied [1999], O.J. No. 4912 (Div. Ct.).

4 Burke v. Buss, 2002 CarswellOnt 4381 (ONSC).

5 Stegenga v. Economical, 2019 ONCA 615.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Source: Mondaq

Ontario woman feels abandoned by pet insurer she’s paid $30K after coverage on elderly dog drops 30%

The excerpted article was written by Nicole Brockbank · CBC News

Like many Canadians, Rebecca Shuster considers her two dogs part of the family. But now, with her aging pets struggling with health problems, she’s finding out the pet insurance she bought to protect them isn’t providing the coverage she thought it would.

The Vaughan, Ont. woman signed up with Petsecure, a Winnipeg-based company and Canada’s largest pet health insurance provider, more than a decade ago when she got her 13-year-old Shih-poo, Hope.

Since then, Shuster has spent more than $30,000 in premiums on the company’s high-end insurance for both Hope, and her 11-year-old dog, Zoe. She says she was shocked to discover that Petsecure can change how much of her vet bills it covers — and she wants other pet owners across the country to be aware that could happen to them, too.

“I thought I was buying the best safety net,” Shuster told CBC Toronto.

“We wanted insurance so that money wouldn’t be a deciding factor in the health care that we provide.”

But now Shuster is worried she could lose Hope over money.

Petsecure is lowering its coverage amount on claims for Hope by 30 per cent — but expects Shuster to continue paying the same $155 a month premium and $500 annual deductible.

In a letter, Petsecure told Shuster the change was the result of a review the company does for all customers’ claim activity; and that based on that review, the amount the insurer will reimburse for vet bills for Hope will go from 80 to 50 per cent on Jan. 1, 2020.

So Shuster’s share of future claims will more than double.


Canadian insurance firm targeted in ransomware attack

Adam Ward |CTVNews.ca 

TORONTO — Andrew Agencies Ltd., an insurance firm that operates in the Prairies, was recently targeted in a ransomware attack but says no personal information was taken.

Dave Schioler, the executive vice president and general counsel for Andrew Agencies, confirmed the security breach in an email statement to CTVNews.ca on Wednesday.

“We have uncovered no evidence of sensitive personal information or data being stolen or otherwise compromised,” he said in the statement. “We can advise that the incident has had minimal impact on our operations.”

Andrew Agencies, a full-service insurance and financial services firm, operates 18 locations in Alberta, Manitoba and Saskatchewan.

A hacker group known as Maze has taken credit for the attack online. The group was reportedly behind a ransomware attack that recently targeted the City of Pensacola, Fla.

Schioler said that Andrew Agencies did not pay a “ransom as part of the recovery effort.”

“We have taken this matter very seriously and have expended considerable resources in the investigation and remediation of this incident, including the use of third parties with expertise in similar incidents,” the statement reads.


News of the security breach at Andrew Agencies comes one day after LifeLabs, one of Canada’s largest medical laboratories, announced it was hit by hackers.

In LifeLabs’ case, an estimated 15 million customers are believed to have been affected, with passwords, birthdays, health card numbers and even lab results potentially being accessed.

Brett Callow, a threat analyst with anti-virus software company Emsisoft, says while many of these types of attacks go unreported, it’s very likely there has been an increase.

“Most ransomware attacks are not specifically targeted and, as there’s been an increase in attacks on the public sector, it would seem inevitable that there has been an increase in attacks on smaller businesses too,” he said in an email statement to CTVNews.ca.

According to a report released this week by Emsisoft, at least 948 government agencies, educational institutes, and health-care providers were impacted by ransomware attacks in the U.S. in 2019. Emsisoft didn’t have information on the number of these types of attacks in Canada.

Callow says that in about 90 per cent of these cases, hackers are perpetrating these attacks through “email attachments or improperly secured remote access solutions.”

So how can companies and municipalities protect themselves from these types of attacks? Well, Callow says a good starting point is email filtering and training staff how to spot potentially hazardous emails.

“The fact that ransomware groups are now stealing data as well as encrypting it makes prevention and detection more critical than ever,” Callow says.


In short, no, says Callow, because there’s a lot of unknowns.

“There is no guarantee that the decryption tool supplied by the cybercriminals will work or that they’ll even supply one.”

Callow added that every time a company pays for their data back, they incentivize these types of cyberattacks. However, he admits that some companies have no choice and have to take the risk because it may be the only option.

“For as long as companies pay ransoms, ransomware attacks will continue. The only way to stop the attacks is to make them unprofitable.”

Source: CTV News

Insurance sticker shock for condo owners

Ross McLaughlin, CTV Vancouver

Condo owners are bracing themselves as strata councils try to renew insurance coverage.

“It’s going to be a shocker,” said Tony Gioventu, executive director of the Condominium Home Owners Association of B.C.

Some strata buildings are facing increases from 50 per cent more to three times as much as last year.

“We came across a development last week where the policy has increased from $300,000 to $1.2 million,” said Gioventu.

Property management companies are warning strata councils to be prepared, with one report of a building with an insurance premium increase of nearly 700 per cent.

Deductibles are also expected to increase anywhere from $100,000 to $500,000 and beyond.

“The deductible will certainly be a devastating blow to the financial reserves of these communities or to the cost of individuals,” said Gioventu.

Impact on condo owners

Higher premiums will affect owners’ monthly strata fees – and homeowners could see a 20 per cent increase, or more.

Individual condo owners may also have to carry the full load of an insurance claim. Consider an instance where a condo owner gets distracted while filling the bathtub and it overflows, damaging several units below.

“It’s very possible individual owners are going to find themselves liable for these high deductibles if they’ve been responsible or the cause of these claims,” he said.

That could happen if the total damage is $140,000 for example on a policy with a $150,000 deductible. The strata may decide not to file a claim leaving the owner responsible for the damage on the hook.

And in the event that a strata does file a claim and there’s a high deductible, it will be spread among all condo owners. Gioventu urges many condo owners to buy homeowners insurance, which often covers strata deductibles. However, it’s difficult to find any insurance companies that offer homeowner’s insurance to cover strata deductibles above $50,000 for individual owners. So if any of your share of the strata deductible goes above the limit covered by your homeowner’s policy, you’d have to pay it out of pocket.

Who’s affected?

Not all condo buildings across the province will be affected in the same way. Some may see little or no increase. The hardest hit will be large expensive buildings, those that have had several claims in recent years and those strata councils that haven’t kept up with maintenance and repair, resulting in a higher risk of claims.

Why is it happening now?

“Some insurers are really re-evaluating their underwriting criteria and their risk appetite,” said Rob de Pruis, director of consumer and industry relations for the Insurance Bureau of Canada.

He’s says there are about 65 commercial insurers in B.C. and not all of them offer insurance to strata corporations.

Gioventu says B.C. has fewer companies offering strata insurance than in other provinces, reducing competition.

Also catastrophic events like B.C. wildfires and flooding hasn’t helped – but it’s not just events happening here that have an impact.

Climate change is considered a factor in several extreme weather events, like wildfires and flooding in California, hurricanes on the East Coast, and the major flooding Alberta experienced in the last decade.

The global impact of catastrophic coverage affects insurance rates in Canada too. Some Canadian companies buy that coverage from global insurers. It’s called re-insurance.

“And because of that, that may also factor in to the premiums for different corporations and commercial entities across Canada,” added de Pruis.

According to the Insurance Bureau of Canada, years ago insurers would pay out about $500 million annually in Canada. In 2018 they paid out about $2 billion and that risk is being passed around.

“This really disperses the liability away from the corporation and down to the individual owners,” said Gioventu.

Source: CTV Vancouver News

Intact announces executive changes and a new appointment

Press Release

Intact Financial Corporation (TSX: IFC) announced changes to the roles and responsibilities of members of the company’s leadership team. The new executive appointments are effective January 1, 2020.

“We are announcing executive changes to build on the experience of our talent and advance on our goals of strengthening our leadership position in Canada and building a leading North American specialty insurer,” said Charles Brindamour, Chief Executive Officer. “These changes will better position our teams to outperform from a combined ratio perspective, expand our specialty solutions in Canada and the U.S. and continue to participate in consolidation.”

Leveraging his wealth of knowledge from previous roles, Pete Weightman will take on a newly created role of Senior Vice President and Chief Underwriting Officer, Specialty Solutions, North America. Pete will focus on achieving Intact’s goal of a sustainable low 90s combined ratio in North American Specialty Solutions. Pete will also assume responsibility for all managing general agent operations for Intact.

Carla Smith will assume the role of Senior Vice President, Specialty Solutions, Canada. Drawing on her strong operational background in claims, direct distribution and broker channels, Carla will focus on growing and expanding Intact’s specialty solutions distribution channel and strengthening relationships with brokers.

Ken Anderson will be promoted to Senior Vice President, Investor Relations & Corporate Development. In his new role, Ken will continue to lead the investor relations team while building on the strong track record of merger and acquisition success that has supported Intact’s growth and outperformance over the past decade.

About Intact Financial Corporation

Intact Financial Corporation (TSX: IFC) is the largest provider of property and casualty (P&C) insurance in Canada and a leading provider of specialty insurance in North America, with over $10 billion in total annual premiums. The Company has approximately 14,000 full- and part-time employees who serve more than five million personal, business and public sector clients through offices in Canada and the U.S.

In Canada, Intact distributes insurance under the Intact Insurance brand as well as The Guarantee Company of North America brand, through a wide network of brokers, including its wholly-owned subsidiary BrokerLink, and directly to consumers through belairdirect. Intact also provides specialized insurance programs to public entities through its wholly-owned subsidiary, Frank Cowan Company.

In the U.S., OneBeacon Insurance Group, a wholly-owned subsidiary, provides specialty insurance products through independent agencies, brokers, wholesalers and managing general agencies.

SOURCE Intact Financial Corporation

For further information: Media Inquiries: Hazel Tan, Manager, External Communications, 416 341-1464 ext. 48073, hazel.tan@intact.net; Investor Inquiries: Husayn Hirji, Manager, Investor Relations, 416 341-1464, ext. 45110, husayn.hirji@intact.net

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