And how does being a “medicinal” or “recreational” user affect your premiums?

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We’re well into 2019 and New Year’s resolutions are probably being broken.
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LTD Denials – When Does The 2-Yr Limitation Period Start?

Article by Gabe Flatt

Limitation periods continue to be a hot topic in the context of disability benefits. A recently released Divisional Court decision seems to have shed a little light on this matter. In Western Life Assurance Company v. Penttila, the insurer brought a summary judgment motion to dismiss the plaintiff’s claim due to being statute barred and out of time. The motion was denied. The insurer appealed the motion judge’s decision.

The relevant dates in this matter are as follows:

  • May 16, 2012 – the plaintiff was approved for long term disability benefits due to back problems.
  • February 19, 2013 – the insurer advised the plaintiff that her benefits would be denied as of March 7, 2013 due to a change in the definition of her disability. The insurer’s correspondence advised that she could appeal its decision by providing a written request for review along with supportive medical documentation.
  • April 8, 2013 – the plaintiff advised the insurer that she wished to appeal the denial, and provided further medical information.
  • November 13, 2013 – the insurer requested reports from two doctors from the plaintiff and advised: “upon receipt of all of the above requested information, we will complete our review of your appeal and advise you of the decision.”
  • The plaintiff provided the requested documentation. On October 21, 2014, the insurer advised that the file had been reviewed and that its position “remained unchanged.”
  • May 25, 2015 – the plaintiff requested a letter from the insurer that outlined its decision from its review of her file.
  • June 18, 2015 – the insurer sent a letter advising that it could not conclude on the basis of the information available that she was unable to perform her occupation and that benefits beyond March 6, 2013 remain declined.
  • June 6, 2016 – the plaintiff issued a Statement of Claim.

At the summary judgment motion, the insurer argued that the Statement of Claim was issued outside of the two year limitation period, which should have commenced as of either February 19, 2013 (the date of the denial letter) or March 7, 2013 (the initial termination date). The motion judge held that either October 21, 2014 (the date the insurer denied the plaintiff’s appeal) or June 18, 2015 (the date of the insurer’s final letter) were the applicable dates on which a reasonable person would have understood that a proceeding was a legally appropriate means to seek a remedy.

On appeal, the Divisional Court found that the motion judge was correct in holding that the triggering event for the commencement of the two-year limitation period was the date upon which it would be legally appropriate to commence legal proceedings to seek payment of disability benefits that the insurer refused to pay. Given that there was an agreed upon right to appeal the insurer’s denial directly to the insurer, it would be premature to commence legal proceedings until that process ran its course.

As a result, the Divisional Court upheld the Motion Judge’s decision, dismissed the summary judgment motion and awarded costs to the plaintiff.

Takeaway

This decision supports the idea that the limitation period for commencing a claim at Court in the disability context only begins to run once there is a final, clear, unequivocal denial of benefits. It also supports the idea that the limitation period only commences once it becomes “legally appropriate” to commence a Court proceeding. If there is another method of appeal that is either agreed upon or should reasonably be concluded prior to commencing a Court proceeding, the limitation period will likely commence only after that appeal process is completed.

This means that insurers should be very wary about providing open-ended rights to insureds to appeal the denial of disability benefits. The insurer should be able to demonstrate that a final decision was made and that the decision was communicated to the insured in a way that makes the denial clear and unequivocal.

See Western Life Assurance Company v. Penttila, 2019 ONSC 14 (CanLII)

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

Committee recommends how Humboldt Broncos donations should be divided

A committee recommending how to distribute $15.2 million raised in a GoFundMe campaign after the Humboldt Broncos bus crash says more money should be given to the families of those who died than to those who were injured.

The advisory group, which is made up of five people, suggests that the court approve a total payout of $525,000 for each of the 16 families who lost a loved one in April when the junior hockey team’s bus and a semi collided in rural Saskatchewan. It is also recommending a total of $475,000 for each of the 13 surviving players.

Both payouts would include an interim payment of $50,000 already approved in August.

A committee report released Thursday, November 22, 2018 said the figures are based on discussions with the 29 families in the last few months.

“Each and every member of the advisory committee understands all too well that no amount of money will replace the loved ones lost by family members, partners and close friends,” said the report.

“They also understand that those survivors who may have been permanently disabled as a result of the accident would never choose money over their ability to live the life they once had.”

The majority of families said in their initial reports that the GoFundMe money should be divided and paid to each family in equal amounts.

“They gave different reasons for that opinion,” the committee wrote. “One reason was that it would be the easiest and simplest approach.”

Officials said two other themes emerged as they continued their discussions: that an equal amount was always intended, and that the 29 families had become friends since the crash and didn’t want the payouts to damage those relationships.

Three families said the “only choice” was splitting the money equally, but it became clear to the committee that not all of the families supported the idea.

“A number of families of those who lost their lives in the crash feel that they have been more adversely affected than the survivors and their families,” said the report.

In its analysis, the committee said it agrees that the fundraiser was intended to benefit all 29 people on the bus, but noted that dividing it equally among the families wouldn’t necessarily be fair and reasonable.

“The first most obvious difference is that 16 of the 29 passengers on the bus died, leaving their loved ones with profound grief, anguish and depression,” committee members said.

“The other 13 passengers have their life. Some of those 13 have their health. Their families can celebrate their survival and take pride in their accomplishments.

“There is a huge difference in emotional circumstances between most of the families who lost a loved one and most of the families who did not.”

The committee said the circumstances of the survivors are also far from equal, but the families of the four most severely injured players strongly believed all the survivors should be treated the same.

“They were simply not motivated by monetary concerns,” said the report. “One parent told us that what they needed was prayers, not money.”

The recommendations still need to be approved at a court appearance set for Wednesday.

Committee members included retired Saskatchewan justice Dennis Ball; Mark Chipman, chairman of the company that owns the NHL’s Winnipeg Jets; Olympic gold medallist Hayley Wickenheiser; Dr. Peter Spafford, who’s in charge of head and neck surgery at the University of Saskatchewan’s College of Medicine; and Kevin Cameron, executive director of the Canadian Centre for Threat Assessment and Trauma Response.

All of the people involved in the crash will still be entitled to money from any insurance payouts. Some have also received help from individual fundraisers.

Life insurers welcome new rules that limit how much they can accept as deposits

TORONTO _ Two of Canada’s largest life insurance companies welcomed a Saskatchewan government decision that clarifies the rules for a type of insurance policy that’s been the focus of civil suits against them.

Manulife Financial Corp. and IA Financial Group say they expect substantial aspects of the litigation against them will be resolved as a result of the revised provincial regulations.

Institutional investors argued in a Saskatchewan court last month that there shouldn’t be limits on how much they can deposit into side accounts associated with a type of universal insurance policy offered in the 1990s.

Manulife and IA argued in their defence that the side accounts associated with the insurance policies weren’t intended as investment vehicles and therefore there should have limits on how much money they can accept.

A report from short-seller Muddy Waters after the trial warned Manulife could face  “billions of dollars of losses” if it lost the case. Manulife disagreed with the report, but its shares fell to a 2018 low within days of the Oct. 4 report.

Amendments to Saskatchewan insurance regulations, published Monday, say insurers aren’t allowed to accept deposits in excess of what’s required to pay premiums over the policy’s eligible period.

Manulife reinsuring business, boosting dividend and buying back shares

TORONTO _ Manulife Financial Corp. says it is reinsuring some of its businesses and boosting the company’s quarterly dividend by 14 per cent.

The insurance firm says it has entered into agreements with counterparties to reinsure substantially all of its legacy U.S. individual and group pay-out annuities businesses, and mortality and lapse risk on a portion of its legacy Canadian universal life policies. These transactions are expected to release over $1 billion of capital over the next year.

The dividend payout _ which is coming a quarter earlier than in recent years _ will increase by three cents per share to 25 cents, payable as of Dec. 19 to shareholders of record at the close of business on Nov. 30.

The Toronto-based company also says it has received TSX approval to repurchase up to 40 million of its common shares or about two per cent of the nearly two million shares outstanding.

The announcements were made ahead of Manulife’s release of third-quarter results after markets close next Wednesday.

Manulife’s shares have fallen about 25 per cent from their 52-week high.

The company, which operates mainly as John Hancock in the U.S. and Manulife elsewhere, had more than $1.1 trillion in assets under management and administrations.

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