Volume. 6 Issue. 16 – May 4, 2022
This week in ‘Vice-Chair Varies Own Decision’, the Tribunal, following the Court in Varriano, determined that the insurer’s benefit denial was in fact invalid, therefore the Applicant was now allowed to proceed with their claim for IRB. While noting that Varriano was under appeal in the Court, for present purposes at least “the effect of this reasoning on similar cases moving forward and on those already decided remains unclear”.
The relevance of an analysis of the “big picture” of a 44 year marriage is one element of focus in ‘Spouse Not a Dependant’, where the Tribunal considers whether the spouse of the deceased was principally dependant upon her husband for financial support.
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“Return to Work” Denial Again Found Invalid
Vice-Chair Varies Own Decision – Hearing his own reconsideration, the Vice-Chair in Perrigard v Primmum Insurance (19-010651), addressed the request by Perrigard that the earlier decision be varied to find that Primmum did not issue valid denials, and therefore he be allowed to proceed with his application. In the original decision, the Vice -Chair reasoned that “Primmum was not required to conjure up or fabricate a medical reason for terminating the applicant’s IRB where there was a valid “other” reason for doing so: being the applicant’s return to employment, which presumably entailed a sufficient ability to perform the essential tasks of their employment.”
However, the Vice-Chair then acknowledged that the Court in Varriano had not accepted his rationale in an earlier decision, where the facts were very similar. The Court acknowledged on the one hand “that insurers are not required to manufacture a medical reason where one does not exist”. Yet, “on the other hand it found that insurers have to be explicit as to whether or not such reasons support denying or limiting coverage, so that applicant’s will understand that their “impairment” is or is not in issue for future claims.”
Varriano therefore “invalidates the denial on the basis that Primmum’s correspondence failed to include a medical reason, or, as I understand the Court’s requirement, failed to provide an indication that the applicant’s IRB was not being denied for a medical reason. The Court’s rationale does not provide discretion to navigate the facts on which Primmum and I relied.” The Vice-Chair was also “alive to Primmum’s submission that even if “medical reasons” are held to be required in this case, the oft-cited case of Sietzema v. Economical Insurance provides that clear and unequivocal notice triggers the limitation period, even if the insurer gave legally incorrect reasons.”
However the Tribunal noted that “it appears that this rationale no longer applies post-Varriano, as the Court specifically addressed this argument… finding that Seitzema was of limited assistance because the pre-2010 version of the Schedule considered in that case did not explicitly require “medical and any other reasons” like the current version does. The Varriano Court “determined that the Seitzema Court’s “narrow focus on the clarity of the insurer’s ultimate decision to deny benefits cannot be justified in the face of the legislature’s 2010 amendments that clearly and explicitly require insurers to provide adequate reasons for their determination, including medical reasons.”
The Tribunal noted that “the effect of this reasoning on similar cases moving forward and on those already decided remains unclear, but the Court’s direction is binding on me.” Therefore “Primmum’s denial of IRBs was invalid and did not start the limitation period, meaning the applicant may proceed with his application before the Tribunal.” It was further noted that the Varriano decision has been appealed, yet “the Court’s direction remains binding on this Tribunal at this time.”
44 Years Married not Principally Dependant
Spouse Not a Dependant – In Jeffery v Aviva (20-006381), Jeffrey, who received the $25K death benefit following her husband’s death, sought as well the $10K “dependant” benefit. Jeffery submitted that she “meets the criteria for being a dependent due to the amount and duration of her financial dependency on him, the financial needs that she has, and her inability to be self-supporting.” Further, she submitted “that the most appropriate analytics lens is the “big picture” approach, which demonstrates that she was principally dependent on her husband for support and does not have the financial resources to pay for her living expenses.”
The records reflected that in taxation year 2016 (accident was July 2017) the applicant’s husband earned $68,995.72, she earned $46,130.56 and her affidavit confirmed that household expenses of $27,984.36. The Tribunal noted that “while acknowledging that a strict mathematical approach is seldom conclusive, the Court has reasoned that if most of a person’s needs can be met from their own resources, then they are not principally dependent on the other person.” For the within matter, it was found that the six months prior to the accident served as an appropriate reference point. As there was “ample financial documentation to assess or infer the applicant’s financial situation during this time where the couple had recently retired…(and) it is reasonable to assume that the expenses and lifestyle were relatively stable if not fixed during this time.”
This “is not to say that it is not lost on me that the applicant and her husband were married for 44 years and likely developed a rich emotional dependency, just that the focus of my analysis is on whether the applicant was financially dependent on her late husband at the time of the accident.” Further, “the big picture is not lost on me. I am alive to the applicant’s statements… that she was principally dependent on her former husband for care, not only financially, but physically, emotionally and socially. I have no doubt that after 44 years of marriage, there are aspects of a relationship and dependency that are not captured by mathematical formulas and baseline measures and that only the applicant may appreciate.” However, the “raw income and expense numbers suggest the applicant also did not have a financial dependency, even if her total household income was significantly reduced post-accident.”
Concluding, the Tribunal “cannot find that the applicant relied on her husband to provide her with the necessities of life, including shelter, even on a broad consideration of the facts, as the case law invites. Rather, with great respect, I find the applicant was not principally dependent on her late husband for financial support and is therefore not entitled to the benefit in dispute.”
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