Ontario court ruling broadens definition of catastrophic impairment

Decision could increase numbers eligible for higher benefits

A recent Ontario Court of Appeal decision broadens the definition of catastrophic impairment, potentially allowing for more claimants to be eligible for enhanced accident benefits.

The ruling stems from a claim filed by Anna Pastore, a Toronto woman who was hit by a car while visiting Montreal in 2002. The accident left Pastore with a fractured ankle that didn’t heal properly, which then resulted in a number of surgeries over the next five years as well as a knee replacement.

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Before the accident, Pastore was the primary caregiver for her husband, but the accident has limited her mobility and she is now dependent on others for most of her personal care.

In 2005, Pastore applied to Aviva Canada for enhanced accident benefits due to catastrophic impairment.  Pastore was evaluated at a designated assessment centre (DAC) and was found to have a Class 4 impairment (“marked impairment”) in the activities of her daily life and an overall assessment of class 3 (moderate impairment).

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Aviva challenged the assessment based on the fact that Pastore only had a Class 4 impairment in one of the four categories used to measure catastrophic impairment, not in all of the categories (daily living, social functioning, concentration, deterioration on the job).

The Court of Appeal ultimately decided that one of the four criteria is enough to qualify for catastrophic impairment.

In response to the ruling, Karin Ots, senior vice president, regulatory and government relations at Aviva Canada, told Canadian Insurance Top Broker that Aviva obviously disagrees with the ruling.

“The ruling could have a serious impact on how the insurance industry and the courts determine or classify catastrophic impairment. We are concerned that any expansion of the classification will increase the number of catastrophic impairment claims, the associated costs that have not been accounted for in the current industry pricing system and would likely result in an increase in insurance premiums for consumers,” said Ots.

“We will continue to work with the government and regulators to ensure that a fair definition of catastrophic impairment is applied throughout the industry, sustaining an affordable insurance product for all Ontario residents,” Ots added.

In June of this year, the Superintendant of the Financial Services Commission of Ontario (FSCO) released its report on recommended updates to the definition of catastrophic impairment. The report largely mirrored recommendations made by an Expert Panel’s report, which found that more objective, science-based evidence is needed to make determinations of catastrophic impairment.

More to come.

See also:

FSCO details timelines for additional auto reform

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