A FSCO arbitrator has ruled that an insurer’s denial of a catastrophic impairment application does not trigger a limitation period to dispute that determination. And in any event the prescribed OCF-9 form for denying the CAT determination was deficient.

In Do v. Guarantee, the claimant was injured in a motor vehicle accident on October 9, 2005. In December 2006, he submitted an application to Guarantee for a determination that he sustained a catastrophic impairment. Guarantee arranged a series of multidisciplinary insurer examinations. On May 2, 2007, Guarantee determined that the claimant did not sustain a catastrophic impairment and sent him an Explanation of Benefits form (OCF-9), as well as information about his right to obtain a rebuttal report.

After receiving a rebuttal report and a further addendum from the IME doctor, Guarantee sent the claimant an OCF-9 on April 10, 2008. It reiterated its position that the claimant had not sustained a catastrophic impairment. Accordingly, the claimant applied for mediation and subsequently arbitration at FSCO.

Guarantee raised a preliminary limitation issue. Counsel agreed that the sole issue for the arbitrator to determine was whether the OCF-9 form in May 2007, or that in April 2008, triggered the limitation period. If the limitation period was triggered in May 2007, as Guarantee alleged, the claimant’s applications for mediation and arbitration were time barred. If it was triggered in April 2008, on the later date, as the claimant alleged, both applications were timely.

Arbitrator Alves concluded that that neither the May 2007 nor the April 2008 OCF-9 forms triggered the commencement of the limitation period. The basis for the arbitrator’s conclusion is as follows:

  • Section 281.1 of the Insurance Act prescribes a two-year limitation period for commencing a mediation or arbitration application from the refusal of a benefit. That period is extended by a further 90 days from the date of the Report of Mediator, if the mediation is commenced within the two-year period.
  • According to the arbitrator, the insurer’s determination that the insured person did not sustain a catastrophic impairment is not a “refusal of a benefit”.

Interestingly, the arbitrator considered a previous arbitration decision in Wry v. Aviva, where a different arbitrator held that the limitation provisions in the Insurance Act apply to determinations of entitlement to catastrophic impairment, and that the triggering event for the running of a limitation period is the insurer’s determination that the insured person did not sustain a catastrophic impairment. She advised that she disagreed with the arbitrator in Wry.

The decision in Do now means that a claimant who is denied a catastrophic impairment designation can dispute that determination more than two years after the determination. It also means that there are conflicting decisions on the issue at FSCO.

Also of note, the arbitrator held that neither OCF-9 form that Guarantee used clearly communicated to the claimant that the two year limitation period ran from the date of the refusal of catastrophic impairment. She held that the prescribed form (for accident before September 1, 2010) stated nothing about a limitation period from a refusal of a determination of catastrophic impairment. It did not specifically tell the claimant that he had two years from the date Guarantee refused to agree that he was catastrophically impaired, to commence mediation or arbitration.

The OCF-9 is no longer prescribed for use as an explanation of benefits form, so this finding might have limited application going forward. But it is worth noting that this is the second decision of 2012 where Arbitrator Alves has found that a prescribed form – which the Superintendent of Insurance mandates that insurers must use – was deficient.

Do v. Guarantee is available on the FSCO Web site.