The excerpted article was written by Andrew Duffy | Ottawa Citizen
Former deputy prime minister John Manley has lost a legal bid to secure a $500,000 insurance claim that was rejected because he received a cancer diagnosis just weeks after cancelling his critical illness coverage.
Manley, now 70, was diagnosed with kidney cancer in May 2017 when he was president and chief executive officer of the Business Council of Canada. A tumour was discovered by chance during an ultrasound to investigate another condition.
He received treatment at The Ottawa Hospital and is now recovered.
After his diagnosis, Manley submitted a $500,000 insurance claim to Manulife Financial that was rejected by the company.
Manley had paid premiums for critical injury insurance coverage — a special addition to his term life insurance — since December 2009, but in mid-March 2017, he wrote a letter cancelling that coverage.
His coverage officially lapsed on April 1. He was diagnosed with cancer on May 23.
Manley’s kidney cancer qualified as a critical illness, but Manulife denied the claim since his policy was no longer in force.
Manley appealed that decision to the company’s ombuds office. In a letter to the firm, he said, “I would respectfully suggest that Manulife’s values (customer focus, trustworthiness and reliability) would indicate that this is a circumstance in which a strict reliance on the letter of the policy rather than its intent…is inappropriate.”
He further argued that his kidney tumour had been present while he was still paying policy premiums. “It is the condition, not the diagnosis, that is key,” Manley said.
Manulife, however, maintained its position, and Manley launched a breach of contract suit against the firm in January 2018.
Manulife lawyer Gordon Jermane argued that the insurance policy was clear: that a critical illness diagnosis was the “triggering event” for a policy entitlement. It meant, he said, that for Manley’s insurance claim to be valid, his diagnosis had to take place while premiums were still being paid.
Manley’s diagnosis was not made until five weeks after his policy had lapsed.
In a decision released Wednesday, Ontario Superior Court Justice Sylvia Corthorn sided with the insurance firm: “The making of a diagnosis by a physician — and the receiving of a diagnosis by the insured person — is a clear, indisputable event which validates the existence of a covered condition,” she said.
Making insurance coverage decisions on the basis of when a condition arose would lead to more uncertainty and more disputes, the judge said, since that can be a difficult moment to pinpoint.
“It is easy to understand why, upon receipt of the cancer diagnosis is May 2017, Mr. Manley communicated with Manulife in an effort to secure payment of the insurance for which he had previously had coverage,” Corthorn added. “Unfortunately for Mr. Manley, the loss of entitlement to that insurance is the consequence of the decision he made several months earlier to terminate the rider effective March 31, 2017.”
Manley referred questions about the case Wednesday to his lawyer, Christopher Spiteri, who said an appeal of the decision is being considered.
Manley, the longtime Liberal MP for Ottawa South (1988-2004), held a host of senior cabinet portfolios, including finance, industry and foreign affairs, during the government of Prime Minister Jean Chrétien. Manley was foreign affairs minister when al-Qaeda terrorists struck the United States on Sept. 11, 2001, and set the tone for the government’s response by publicly defending the need for military action against those countries that harbour terrorists. He retired from politics one year after conceding the Liberal leadership race to Paul Martin.
Manley is now a senior business advisor with the law firm Bennett Jones and serves as chairman of the boards of CIBC and CAE Inc.