Catastrophic impairment cases continue to vex insurers

By Alan Shanoff ,Toronto Sun

First posted: Saturday, January 19, 2013 08:29 PM EST

Anybody seeking insight into the real workings of the no fault auto insurance industry should read the cases posted on the Financial Services Commission of Ontario website.

Many of the cases I've discussed in this column are derived from that site as does the M.G. arbitration decision released late last year.

M.G. was a healthy 55-year-old registered nurse at a Toronto area hospital. Married, with three adult children, her life was “busy, happy and highly productive.” Colleagues testified to her nursing skills and called her the “life of the floor.” She had a “busy social life” and was “active” in her church.

Then came the accident. While crossing the street on November 2, 2005 she was struck by a school bus. With her head striking the pavement she suffered a brain injury, either a concussion or a mild closed head injury, leading to cognitive impairments. Since the accident she has suffered chronic pain, mobility limitations, disturbed sleep, headaches, fatigue, dizziness, urinary incontinence, irritability and frustration over her cognitive and physical limitations.

After failed attempts to return to work, “depression, anxiety and chronic pain took over her life.” Unless prompted, she would sit in her room all day.

M.G.'s insurer, The Economical Mutual Insurance Company, provided and then ceased no fault income replacement and attendant care benefits following the accident.

Economical stopped making the income replacement payments on the purported basis that M.G. had not participated in necessary and reasonable treatment as recommended by one of the insurer's physicians. But according to the arbitrator the evidence was clear that M.G. had in fact promptly sought and participated in treatment “very similar” to the treatment recommended by the insurer's expert.

In spite of this, Economical cut off the income replacement payments and didn't reinstate them for 2 1/2 years, until just prior to the arbitration hearing, providing no explanation for the delay in reinstatement.

Economical paid M.G.'s attendant care benefits of $1,020 per month for two years following the accident but ceased payment, taking the position M.G. wasn't catastrophically impaired, relying on expert reports prepared by Custom Rehab & Assessments Canada Ltd.

While both M.G. and the insurer's experts agreed on many aspects of the injuries they could not agree on the severity of the impairments. But the arbitrator had little difficulty in making a determination of catastrophic impairment and ordering Economical to continue attendant care payments in the sum of $1,462.70 per month, in addition to $100 per week for housekeeping services.

The arbitrator concluded that the CRACL reports were flawed for various reasons, including the failure “to consider and compare all of the relevant impairment levels and correctly apply them to the facts,” basing “conclusions on limited and inaccurate information,” and incorrect application of the impairment rating system.

It's doubtful M.G.'s injuries would satisfy the proposed definition of catastrophic impairment currently under consideration by the Ontario government.

One case doesn't permit generalizations, or mean that Economical is a bad insurer, or that CRACL doesn't generally provide competent assessments, but here we have yet another illustration of an accident victim having to fight for years to access her right to accident benefits. The accident took place in late 2005. The arbitration hearing took place over a 12 day period in 2012, with the decision being released in late 2012.

We've had recent public hearings into the auto insurance industry focusing on a wide array of subjects. We've had reports from the Automobile Insurance Anti-Fraud Task Force and the Catastrophic Impairment Expert Panel. What we haven't had is an inquiry focusing on insurance industry practices.

It's puzzling why every aspect of the auto insurance industry is up for review save for insurance industry practices. Perhaps the next premier of Ontario will remedy this omission. It would sure generate a lot of votes. But I wouldn't bet on an inquiry, not with reports of $60,000 contributions by the Insurance Bureau of Canada to the leading candidates in the Ontario Liberal leadership race.