The Ontario Court of Appeal has confirmed that disability insurers in Ontario are not required to give insureds notice of the two-year limitation period established by the Limitations Act, 2002 when denying a claim.
Appealing from the insurer’s summary judgment motion, the Appellant argued that the notice requirements within other Ontario regulations, such as the SABS, and within similar legislation from B.C. and Alberta, indicate that insurers are required to give insureds notice as part of their duty to act in good faith. The Court disagreed and refused to impose consumer protection measures on insurers that the Ontario legislature had specifically chosen not to mandate. The Court also noted that imposing a notice requirement on insurers, beyond any parameters set out in the underlying policy, would effectively judicially overrule the Limitations Act, 2002 and bring ambiguity, rather than clarity, to the process. In doing so, the Court confirmed that the discoverability of the underlying claim, rather than the insurer’s notice, triggers the running of the limitation period in disability disputes.
Right before Christmas, the Supreme Court of Canada denied the insured’s application for leave to appeal.
This decision provides further clarity to the interplay between the Legislature and Courts when dealing with limitation period disputes.
See Usanovic v. Penncorp Life Insurance Co., 2017 ONCA 395
