Hamblin v. Standard Life Assurance Company of Canada, 2016 ONCA 854
An LTD insurer is entitled to reduce the amount of LTD payments under a group insurance plan by the amount of the non-earner benefit the insured person is receiving, so long as the accident benefits insurer is not deducting LTD payments from the amount of the NEB payable.
Released November 14, 2016 | Full Decision [CanLII]
Catherine Hamblin was injured in two separate motor vehicle accidents. She applied for and received LTD payments from Standard Life under a group insurance plan after the first accident.
By the time of her second accident, Ms. Hamblin was not working. She elected to receive a non-earner benefit. While her accident benefits insurer was entitled to deduct the LTD benefits from the non-earner benefits, it did not do so. Standard Life deducted the amount of Ms. Hamblin’s non-earner benefits from the LTD benefit payable. It relied on the terms of its group insurance plan, which entitled it to reduce monthly LTD payments by “any disability or retirement benefit… payable… under a provincial auto insurance law.”
The Ontario Court of Appeal agreed with Standard Life and the application judge that the NEB was both payable under provincial auto insurance law and was a disability benefit. The Court rejected the argument that NEB benefits ought not to be deductible under the “apples from apples” principle because it was not an income benefit. It contracted the matching principle in tort with deductions that arise by virtue of the terms of the policy of insurance.
In the result, the Court agreed that so long as the accident benefits insurer did not deduct the monthly LTD payment from the NEB payable, Standard Life was entitled to deduct the amount of the NEB from its LTD payments.
Read the Full Decision on CanLII