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Adjudicator Allows Insurer to Recover Overpaid IRBs Beyond Section 52 Threshold

March 15, 2021

In the recent Licence Appeal Tribunal (“LAT”) decision, Aviva General Insurance Company and B.G. (20-000592/AABS), Adjudicator Lake ruled that willful misrepresentation warranted Aviva the ability to recoup an overpayment greater than 12 months from the date of the insurers notice to B.G.

On May 5, 2017, B.G. was involved in a motor vehicle accident.  As such, in accordance with the Statutory Accident Benefits Schedule (“SABS”), she made a claim for income replacement benefits (“IRBs”) from her insurer, Aviva.  Aviva paid IRBs to B.G. in the amount of $400.00 per week from May 12, 2017 up to February 7, 2019.

B.G. had advised Aviva that she had not returned to work at Bajra Fine Indian Cuisine & Hakka Chinese Cuisine Restaurant (“Restaurant”).  However, the insurer had conducted surveillance of B.G. during various dates in 2018, which showed B.G. actively working at Restaurant.   Following an Insurer’s Examination on January 21, 2019, it was determined that B.G. was no longer entitled to IRBs.

At an examination under oath on March 13, 2019, B.G. testified that she had worked no more than 1.5 hours since the date of the accident.  However, once the video surveillance was presented to B.G., she conceded that she had returned to work in September 2018.  In addition, B.G. confirmed that she did not advise Aviva she returned to work, she perjured herself under oath and that she owned Restaurant.

On December 13, 2019, Aviva wrote to B.G. advising that it would be seeking repayment of the $36,456 of IRBs paid. The $36,456 represented the entire amount of IRBs paid to B.G. over the period May 12, 2017 to February 7, 2019 which was approximately 22 months.  B.G. did not respond to Aviva’s correspondence requesting repayment, as such, the insurer filed an application with the LAT.

B.G. did not attend the May 25, 2020 case conference, nor did she submit any evidence at the written hearing.

Adjudicator Lake outlined the criteria of Section 52 with respect to the repayment of benefits.  Specifically, Adjudicator Lake outlined the following, “Under s. 52(1)(a), a person is liable to repay to the insurer any benefit that is “paid to the person” as a result of an “error on the part of the insurer,” the insured person or any other person, or as a result of wilful misrepresentation or fraud.” Adjudicator Lake also provided the LAT’s definition of ‘misrepresentation’ as “any manifestation by words or other conduct by one person to another that, under the circumstances, amounts to an assertion not in accordance with the facts.” The Tribunal has also held that “silence or a failure to report” can constitute willful misrepresentation.”

Based on Section 52, an insurer is required to give an insured notice of the amount that is required to be repaid within 12 months after the original amount paid, unless it was paid to the insured as a result of willful misrepresentation or fraud.

The Adjudicator agreed, that on evidence, Aviva had indeed overpaid IRBs in error as a result of willful misrepresentation.  The Adjudicator also pointed out that B.G. knowingly provided false information regarding her return to work during her insurer’s examinations.

Although Aviva’s December 13, 2019 request for repayment of IRBs was outside of the 12 month period, Adjudicator Lake ruled that the 12 month period did not apply given that B.G. received an overpayment of IRBs through willful misrepresentation regarding her return to work and post-accident income earned. Accordingly, Adjudicator Lake ruled that Aviva was entitled to request an order for repayment for the full amount of IRBs.

Read the decision in full detail here: Aviva General Insurance Company and B.G. (20-000592/AABS)

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