December 2 2015

A Warning to Auto Insurers from the Superintendent of Insurance

The Government of Alberta Superintendent of Insurance fired a shot across the bough of some Auto Insurers recently, issuing a warning that there are potential fines for insurers who wrongly deny accident disability benefits to their insureds:  Read more:

PURPOSE: This Bulletin is being issued to advise automobile insurers that I consider failing to provide automobile insurance total disability benefits in accordance with the provisions of legislation, automobile insurance policy forms and interpretation Bulletins to be an unfair act or practice. BACKGROUND: One of the major objectives and coverages of the Insurance Act (Act), the Automobile Accident Insurance Benefits Regulations (AAIB) and automobile insurance policy forms is income replacement for those that are disabled as the result of injuries sustained in automobile accidents. Under automobile insurance, income replacement is provided as a total disability benefit, which enables claimants to pay for the necessities of life, and mitigate the financial consequences of accidents. Given the impact on claimants, I consider not paying total disability benefits as prescribed to be a serious matter. INTERPRETATION: In accordance with my delegated authority under Section 791(2) of the Act and pursuant to Section 792(1) of the Act I have determined that failing to pay automobile accident insurance total disability benefits as prescribed by the Act, the AAIB and automobile insurance policy forms is an unfair act, or practice. An unfair act or practice is prohibited by Section 509(1) (c) of the Act. Noncompliance with Section 509 of the Act is an offence under Section 780 (d) of the Act, for which an administrative penalty may be assessed pursuant to Section 789 of the Act. An administrative penalty of up to $25,000.00 may be assessed for each occurrence in which an offence is committed. I strongly encourage insurers to ensure that all of their applicable staff are aware of this Bulletin. If you have questions regarding this Bulletin please contact our office at [email protected] or (780) 427-8322 (toll-free in Alberta by first dialing 310-0000).