IRBs Denied Based on Delayed OCF Submissions & Unverified Post-Accident Bank Deposits

When does entitlement to income replacement benefits (IRBs) commence if there is a delay between submitting an Application for Accident Benefits (OCF-1) and a completed Disability Certificate (OCF-3)?

How is the quantum of IRBs impacted when the insured is unable to verify the source of their post-accident bank deposits?

These questions have now been answered in the recent Licence Appeal Tribunal (LAT) decision, Zoes Giannoylis and Travelers Insurance (20-000280/AABS).

Specifically, the decision concludes that the applicant (insured) was not entitled to IRBs until both an OCF-1 and OCF-3 were submitted and that the IRBs could not be quantified without documentation evidencing the source of the applicant’s post-accident bank deposits.

In this claim, the applicant, a self-employed labourer for their father’s business, was involved in an accident on August 10, 2018 and submitted an OCF-3 on December 12, 2018.  The respondent (insurer) did not receive an OCF-1 until February 20, 2019.  The applicant argued that they submitted an OCF-1 on January 11, 2019, however, the adjudicator found no evidence to support this assertion.

The adjudicator relied on the Statutory Accident Benefits Schedule (SABS) by stating, “Section 36(2) requires an insured person to submit a completed Disability Certificate (OCF-3) with their Application for Accident Benefits (OCF-1) to the insurer when applying for IRBs.  It is only upon receipt of both the OCF-1 and a completed OCF-3 that an obligation of the insurer is trigger[ed] under s. 36(4) to, among other options, pay the IRB.  Therefore, there is no obligation on the respondent to pay IRBs to the applicant until he submitted both an OCF-1 and a completed OCF-3.”

In addition, in order to determine the quantum of IRBs payable, the applicant had submitted an accounting report prepared on their behalf.  The applicant’s accounting report calculated their pre-accident income during the 52 weeks before the accident and their post-accident income to be $20 per week from their father’s business.

The respondent disputed the quantum of IRBs provided in the applicant’s accounting report on the basis that, “he has not met his onus of establishing the quantum of IRBs to which he is entitled.”  Specifically, the respondent submitted that the applicant did not provide additional documentation supporting their level of income despite multiple requests.  The applicant countered that the respondent’s requests for additional supporting documentation were excessive.

The adjudicator established that the applicant’s accounting report had incorrectly calculated their pre-accident income by utilizing the 52 weeks before the accident as opposed to the last fiscal year completed before the accident, in accordance with Section 4(3) of the SABS.

In regards to post-accident income, the applicant did not submit 2019 and 2020 tax returns, however, did provide post-accident bank statements.  The applicant’s bank statements indicated deposits totaling $105,581 in 2019 and $73,924 in 2020.

These amounts were substantially greater than the $20 per week or, $1,040 per year, considered by the applicant’s accounting report.  Given this, at a case conference, the applicant was ordered to identify and clarify the source of these post-accident bank deposits.

In response, the applicant advised via email correspondence that there was no documentation supporting the source of the post-accident deposits, however, they related to loans from their father and “the streets”.  The adjudicator placed no weight on the applicant’s explanation for the post-accident bank deposits as there is no corroborating evidence.

Considering the above, the adjudicator stated, “As the respondent had requested additional information regarding the applicant’s post-accident income for 2019 and 2020 by way of an order by the Tribunal and the applicant failed to provide sufficient particulars regarding this information, I am unable to determine the amount of IRBs payable for February 20, 2019 onwards to January 11, 2021 given the deduction that the respondent is entitled to make as a result of the applicant’s post-accident income…the applicant has not met his burden of providing sufficient documentation or evidence that allows me to calculate the quantum of IRBs payable”

Read the decision in full detail here: https://www.canlii.org/en/on/onlat/doc/2021/2021canlii88031/2021canlii88031.html