Insurance Law can

Group Disability

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  Group disability policies normally tied to life insurance, typically provided by one’s employer
  
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  Different from other policies
  
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    Policy holder isn’t insured, it is the employer – latter negotiates the policy with the insurer (i.e. the group insured)
    
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  Typically HR person sees broker, explains coverage sought, insurers may provide bids to employer
  
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    Rate will be better with a larger employer since risk spread over greater number of people
    
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    Parties to the insurance contract are the employer and the insurer - ***employee is not privy to that contract, employee doesn’t sign contract and isn’t named on the policy
    
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    Insurer issues booklets/info to employees about benefits, insurance policy governs if there are any discrepancies between booklet and policy
    
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  As the employee, you are held to terms of the insurance contract, but there may be conflict since employee typically doesn’t have access to contract
  
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    Act has attempted to remedy this through s.96(5)
    

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  Totally disabled: restriction or lack of ability due to an injury that prevents employee from performing essential duties of
  
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    a) his own occupation during the qualifying period and the two years immediately following the qualifying period, and
    
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    b) any occupation for which employee is qualified or may reasonably become qualified by training, education or experience after two years specified in part a of this provision
    

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  Important contractual issues
  
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    Employee not privy to contract of insurance – then how does employee sue for benefits?
    
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      Act grants employee the right to sue in s.70 for life insurance, and s.128 for accident and sickness
      
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  Under the 1996 Act, group disability was treated within the life insurance section
  

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  Long term disability policy (LTD) and short term disability policy (STD)
  
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    In group disability, don’t talk about indemnity – instead, referred to as benefits
    
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  In any group disability policy, have a number of coverages
  
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    E.g. may have STD that kicks in first, this typically coincides with otherwise a waiting /elimination/qualifying period, since LTD benefits typically kick in after a period of time/waiting period
    
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    Adjudication of STD claims is different from that for a LTD because there tends to be more STD claims, people will need benefits from the former rather quickly, insurer doesn’t want to take up time when paying out for discrete amount of time – therefore, much lower threshold to meet for STD claims.
    
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    Must re-apply for LTD, adjudication more lengthy
    

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  LTD: generally first twenty four months is called the “own occupation period”
  
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    Own Occ Test – whether the employee is capable of performing the important duties of his or her own occupation
    
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  Total disability test
  
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    In the first twenty four months after you run out STD, use the own occ test – does that employee have functional restrictions that prevent him/her from performing important duties of own occupation? (this test is based on functional abilities)
    
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      Note that occupation is different from job, so the focus of the test is on factors broader than the person’s job – examine education, training and experience
      
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      During this period, insurer will actively work with insured to try to help latter get better
      
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      This test is satisfied when common care and prudence require a reasonable person to desist from his/her business or occupation to effectuate a cure (Sucharov)
      
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    After 24 months, definition change date arises, the test changes to any occupation test: whether employee is capable of performing the essential duties of any occupation for which the employee is suited for reason of education, training or experience
    
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      At definition change date, insured must reapply for benefits, since they must prove that they can’t perform any occupation, threshold is raised. Insurer will typically begin to investigate insured
      

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  If insurer tells insured to go work in another capacity when determining whether to grant benefits, court will look at contract to determine whether evidence insured provides proves that they have medical restrictions that meet the definition of total disability in the policy
  
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  Main remedy insured seeks is declaratory relief (a clarification) – i.e. that insured meets the definition of total disability in the policy
  

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  Insured can perform all important duties of their own occupation, during this time, there is evidence insured can return to work, insurer provided gradual return to work program and ordered insured to go back to work, insured did not go back to work. Insured refused, said that work would aggravate her previous condition. Can insured refuse?
  
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    Sucharov, SCC: left it potentially open for insured to say they don’t have to go back to work, if a condition was such that in order to effect a cure, common care and prudence requires that they take off work
    
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    Rose v Paul Revere Life Insurance Co, BC: insured cannot avoid work by arguing that Sucharov supports doing so for health reasons when no longer under treatment, one must have more than speculative evidence that the sickness is likely to return
    
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      Commented that Sucharov is about the right to refrain from work while under treatment, without losing right to benefits
      

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  Onus to prove total disability lies on employee who claims insurance benefits
  
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    When employee submitting claim for own occ stage, must prove that he/she has functional restrictions form preventing him/her from performing own occupation
    
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  What evidence do we need to prove this?
  
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    General rule is that total disability to be determined objectively in the sense that proof presented by P must be sufficient to convince a reasonable person that there is a genuine condition resulting in an inability to work
    
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      But you don’t need an official diagnosis from the doctor for your condition – this often depends on wording of the contract
      
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      Don’t need to prove any objective symptoms, i.e. something that a doctor can observe like a broken leg or a CT scan
      
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      Objective requirement is satisfied by judge’s thorough assessment of all the evidence
      

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  Mathers v Sun Life Assurance of Canada [1999] BCCA: policy required that employee be disabled due to injury of sickness, P claimed to have lower back pain that prevented him from doing important duties of own occupation. TJ accepted that employee had back pain, but concluded that pain was of unknown origin, and P failed to establish injury or sickness that would cause pain that P claimed to experience
  
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    BCCA upheld trial decision, “while it is possible that judge could find a claim to be proven on P’s evidence, clear in my view that test not entirely objective” – acceptance by TJ of objective medical evidence will usually be required
    
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  Saunders v RBC Life Insurance Co [2007] NFSC: objective requirement may also be met by P’s subjective reporting of pain
  
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    This seems to confuse the concepts
    
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  Takeaway is that there is an objective test for determining whether person is disabled
  
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    Proof presented by P must be sufficient to convince reasonable person that there is genuine condition resulting in an inability to work – objective assessment
    

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  P must prove that they are disabled pursuant to the policy, no shifting burden
  
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  Where insured is granted LTD benefit during own occupation phase, at year end, insured told to go back to work, something must have changed in order for insurer to yank benefits
  
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  Insured has a duty to mitigate their loss if found to be disabled
  
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    Failure to mitigate reduces a claim, but doesn’t eliminate it altogether
    
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    Thus insured may have duty to seek medical treatment, retrain, seek new employment, obtain other sources of income that would reduce/eliminate claim for benefits (such as CPP)
    
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  Qualifying period is one of continuous disability starting with the first day of total disability which must be completed before P eligible for long term disability benefits
  

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  Not intuitive, difficult to interpret