Claims Canada August + September 2017 by Annex Business Media

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August/September 2017

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Contents August/September 2017 • VOLUME 11 • NUMBER 4

Cover Feature 10 The times they are a-changing

The evolution of Canada’s medical marijuana regime means changes for insurance BY HELEN D.K. FRIEDMAN AND EVAN BAWKS

Spotlight 18 Exit interview Heather Matthews reflects on the claims industry and her year as CIAA president BY EMILY ATKINS

News Features

21 Tech advances reshaping insurable privacy risk BY DAVID MACKENZIE

25 How to weather a disaster with customer satisfaction intact BY DARA BANGA, FCIP, CFEI

28 Recovery for psychological injuries BY TODD DAVIES AND JENNIFER GROENEWOLD

31 Alberta court issues Canada’s first cyber coverage decision in The Brick v. Chubb BY ANNE JUNTUNEN

Departments

4 First Notice 34 On the Scene

Columns 7 President’s Message

• first notice FN Insurers increasing reliance on digital payments

Consumers won’t tolerate slow apps

As consumer expectations change, insurance carriers are moving towards fully digitizing more processes, including payment gateway technology, research and advisory firm Novarica said recently. In a new executive brief, Payment Gateways in Insurance, Boston, Massachusetts-based Novarica provided an overview of how payment gateways allow insurers to respond to customer needs, as well as trends, changes and evolution of the vendor landscape. Payment gateways enable insurers to simplify their pay plan structures, ensure PCI (payment card industry) compliance and shield themselves from changes in the payment landscape, while providing a seamless and secure experience for consumers. In the executive brief, Novarica includes profiles of providers of payment gateway solutions, including both traditional payment processors and newer providers. “Payment gateways can serve a vital role in meeting customer expectations and providing secure services,” said Chuck Ruzicka, vice president of research and consulting at Novarica, who co-authored the brief with Novarica associate Christina Choi. “They offer the ability to enhance consumer-facing services, improve IT’s response to market changes while reducing its complexity, reduce carrier risk and reduce costs,” he suggested. “Carriers who are evaluating their digital capabilities should consider how they provide billing services and how they can best leverage the capabilities of payment portal service providers to address their challenges.” ●

A huge divide exists between consumer expectations of their digital service experience and what is being delivered, with three-quarters of recently polled consumers in Australia reporting they will stop trying a digital app or service within a minute if it stops working or slows down. Findings in State of Digital Operations: Australia, clearly show “a disconnect between consumers’ high expectations of their digital service experience and how quickly IT organizations can adapt to the rise of digital service offerings and resolve customer-impacting incidents,” according to PagerDuty, digital operations management firm with regional offices in Toronto and Sydney. Findings are based on a survey of 300-plus consumers in Australia. The lack of consumer satisfaction has some big potential costs attached. The study shows that one hour of IT downtime costs companies between AU$500,000 to more than AU$10 million. As well, resolving consumer-impacting incidents takes IT teams more than five times longer than the amount of time consumers are willing to wait for a service that is not performing properly. ●

Report suggests reforms for BC auto insurance British Columbia’s auto insurance system “has structural problems” and its mandatory Basic Autoplan product needs to be redesigned, suggested Ernst & Young LLP (EY) in a report released July 24. “In BC today, claimants receive less than 60 percent of their premiums as benefits, with the remainder going to scheme costs including legal costs and disbursements,” EY said in the report, Affordable and Effective Auto Insurance – a New Road Forward for British Columbia, which was commissioned by Insurance Corporation of BC, the crown corporation that runs Autoplan as a monopoly and sells optional additional auto coverage in competition with the private sector. “Best-in-class schemes around the world return approximately 80 percent of premiums as benefits to claimants,” EY said in the report. In BC, the Basic Autoplan had loss ratios of 106.5 percent in 2014, 115.6 percent in 2015 and 110.3 percent in 2016, EY reported, adding that ICBC had net losses, on basic mandatory auto insurance, of $257 million in 2015 and $280 million in 2016. EY included details on auto insurance schemes elsewhere in Canada, and noted: “Ontario has one of the least effective insurance systems in Canada. It is

Claims Canada

August/September 2017

filled with disputes and inefficiencies, and a very high percentage of premiums is going to experts and lawyers rather than directly to claimants.” In 2015, Ontario appointed David Marshall, former president of the Workplace Safety and Insurance Board (WSIB), to review and make recommendations on auto coverage. EY noted that the Marshall report (Fair Benefits Fairly Delivered, April 2017) contains useful lessons for BC in terms of opportunit ies for creating a better and more efficient system. In Ontario, Marshall suggested that insurers “are incented to close their liability with as little cash cost as possible and, hence, they introduce the practice of negotiating cash settlements with claimants in lieu of medical treatment, future wage and other future benefits” under the Statutory Accident Benefits Schedule. Ontario should change its regulations “to include only broad principles and entitlements” for auto accident benefits and should establish an “arms-length regulator with a skills-based board” to oversee auto insurance, Marshall wrote. “Fundamentally, auto insurance in BC has structural problems and requires major reform to resolve these issues,” EY said. “Very similar” to Marshall’s observations in Ontario, “these issues in BC

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• first notice FN Climate change stressing electrical infrastructure

Ontario auto premium increases slow in Q2

Changing climate patterns are putting additional strain on both power generation and transmission, and presenting another risk factor for natural disaster mitigation and recovery in North America’s Pacific Northwest region, suggests a new study from Swiss Re and the Johns Hopkins University School of Advanced International Studies. The report, Lights out: The risks of climate and natural disaster related disruption to the electrical grid, explores how extreme weather and other natural catastrophes are evolving in the Pacific Northwest, including implications for reliability of the system and potential economic disruption. The region is prone not only to high-frequency, low-intensity natural disasters such as droughts and flooding, but is also at risk of catastrophes like the Cascadian Subduction Zone event, an “earthquake-tsunami combination that is expected to devastate the coastline from northern California to southern British Columbia,” the report explained. Climate change is causing more severe and frequent natural disasters, meaning power systems face increased strain from catastrophes. As well, the economic implications are challenging governments and energy providers: not only do they require pre-disaster financing provided by insurance, they must address how to make their systems more resilient to future flooding, droughts and earthquakes. The report suggested state governments and local communities should explore ways to leverage limited public resources through partnerships with the private sector. “Governments in the Pacific Northwest have become regional and national leaders in the development of risk mitigation and resilience strategies.” The report noted that unlike the Federal Emergency Management Agency (FEMA) in the US, Public Safety Canada is not as well capitalized, and therefore unable to provide as much financial assistance to communities devastated by natural disasters. “Post-disaster financial recovery in Canada is further complicated by the large discrepancy between the Canadian insurance industry’s capacity to pay out insurance claims and the expected value of the damage from a potential catastrophe, which the Canadian federal government does not cover,” the report said. In March 2016, Prime Minister Justin Trudeau and thenUS President Barack Obama issued the US-Canada Joint Statement on Climate, Energy, and Arctic Leadership, in which the two countries pledged to “develop strategies to strengthen the security and resilience of the North America electricity grid, and to work together to fight against climate change impacts,” the report said. ●

Approved rate increases for auto insurance in Ontario were an average of 0.76 percent in the second quarter of 2017, the Financial Services Commission of Ontario (FSCO) reported recently. This compares to an increase of 1.24 percent on average for the first quarter of 2017. In Ontario, insurers must submit proposed rate changes, along with actuarial data, to FSCO for approval. It approved rates for 22 insurers representing just over half of the market, based on premium. Four years ago, the province changed the Ontario Automobile Insurance Rate Stabilization Act to establish an “industrywide target reduction” by 15 percent, by 2015. That mandated reduction did not happen. “It got to around seven percent and they realized that there were a lot of issues around this that the industry and the regulators have to work together on,” said Joel Silverthorn, senior financial analyst at A.M. Best Company Inc, at a late 2016 briefing. The 15-percent reduction was meant to be of the average of the authorized rates that may be charged by insurers for private passenger auto in Ontario. ●

Majority of Saskatchewan homeowners opt for flood coverage Saskatchewan Government Insurance (SGI Canada) reported a consolidated loss ratio of 60.4 percent for the year ending March 31, 2017, while 77 percent of all eligible homeowner policies have optional water protection coverage that was introduced last October. “Flood insurance is still a fairly new product in the Canadian insurance market, but when offered to SGI Canada homeowners, the coverage was applied to 77 percent of eligible polies,” wrote Andrew Cartmell, SGI’s CEO, in its annual report released July 20. Coverage for losses from overland flood was generally not available on Canadian home insurance policies until 2015, the year The Co-operators and Aviva announced residential flood coverage. Other home insurers have since followed suit with their own flood coverage for homeowners. “Storm claim losses totalled $51.6 million in 2016-17, with a substantial number of claims streaming in following powerful weather events,” Cartmell wrote in the annual report. “In Saskatchewan, these included a pounding hailstorm that hit Moose Jaw and heavy rains that caused flash flooding in Estevan; and in Alberta, two significant summer storms—all in July of 2016.” ● continued on page 6...

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• first notice FN

...continued from page 5

Illegal rental suites common: survey Seventeen percent of rental suites in detached houses in Ontario, Alberta and British Columbia are considered illegal, a new survey from Vancouver-based Square One Insurance Services Inc. has found. The study involved a survey of more than 5,500 homeowners in the three provinces and revealed that 11 percent of house owners rent out a portion of their home to non-family members. Alberta had the highest percentage at 14 percent, followed by BC at 13 percent and Ontario at nine percent. “We wanted to conduct this survey for two reasons,” said Daniel Mirkovic, Square One’s president. “We’re noticing an increase in inquiries by house owners that are renting a portion of their home to non-family members. We wanted to understand what was driving this increase. We also wanted to understand how house owners are coping with municipal laws relating to rental suites in single-family homes.” Overall, 17 percent of rental suites in detached houses are considered illegal, the survey found. Ontario has the highest percentage at 21 percent, followed by BC at 15 percent, and Alberta at 14 percent. “The actual percentage is likely to be considerably higher as residents may be reluctant to disclose illegal rental suites,” Square One suggested.

According to the survey, the top three reasons why homeowners have rental suites are: for extra income, to help with a mortgage and for companionship. “While mortgagehelpers are well, helpful, there are many municipal regulations that house owners need to be aware of,” Square One stressed. For example, Vancouver and Toronto have capped the number of rental suites allowed per single-family house to just one. Other regulations, which vary by municipality, usually include: zoning restrictions; building code compliance; unit size restrictions; minimum parking requirements; and inspection and licensing compliance. “Most municipal regulations for secondary suites ensure residents have adequate and safe housing options,” Mirkovic said. “But some, like the one rental suite per single-family house, are just outdated. It’s hard to understand why cities advocating for more affordable housing options would continue to enforce this outdated regulation,” he contended. Ontario has more than 233,000 secondary rental units, BC more than 155,000 and Alberta more than 125,000, according to the Canadian Mortgage and Housing Corporation. Secondary rental units tend to be more affordable than apartment suites. The average cost in Metro Vancouver of a two-bedroom secondary suite is $1,390 per month, while a two-bedroom apartment is $1,450 a month. ●

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Message from the President La Plume du président HEATHER MATTHEWS The profession of loss adjusting came into being after the Le métier d’expert en sinistres est né après le grand incendie de Londres en Great Fire of London in 1666. With the introduction of prop1666. Avec l’avènement de l’assurance incendie habitation, les experts indépendants ont erty fire insurance, independent surveyors began using their commencé à utiliser leur expertise pour évaluer et régler les réclamations. expertise to evaluate and settle claims. 351 ans plus tard, qu’est-ce qui a réellement changé? Les bases servant à déter351 years later, how much has really changed? The fundaminer la cause, la portée et le montant de la perte, la détermination de la responmentals of determining the cause of loss, the scope and quansabilité, la négociation et le règlement d’une réclamation ne sont pas radicalement tum, determining liability and negotiating and settling a claims différentes aujourd’hui de ce qu’elles étaient en 1666. are not dramatically different today than they were in 1666. Bien sûr, nous avons des fichiers sans papier, des systèmes de réclamations, Sure, we have paperless files, claims systems, digital photogdes photographies numériques, des drones et des téléphones cellulaires qui se rangent dans votre poche et non dans une mallette, mais la base n’a pas changé. raphy, drones, cell phones that fit into your pocket and not a car Nous aidons les gens. bag, but the fundamentals have not changed. We help people. Nous sommes là quand les gens ont besoin de nous. Nous étions là pour Fort We are there when the public needs us. We were there for Mac, gérant 60 pour cent de la valeur totale des pertes commerciales et résidenFort Mac, handling 60 percent of the total value of commercial tielles assurées. Nous étions là quand Toronto a été inondée et que des dizaines de and residential insured losses. We were there when Toronto milliers de réclamations sont arrivées en quelques heures. Nous sommes là pour flooded and tens of thousands of claims came in within hours. toutes les catégories d’ouragans, de tornades, de grêle et de dommages causés par We are there for any category hurricane, tornadoes, hail and le vent, ainsi que pour les nouveaux types de réclamations comme les litiges de wind damage, as well as evolving new claim types such as mass masse et cybernétiques. tort and cyber. Bien que, fondamentalement, la profession n’ait pas changé, nous devons Although fundamentally the profession has not changed, continuer à évoluer en tant qu’experts en sinistres. Nous devons évoluer pour dewe must continue to evolve the professional adjuster. We need meurer pertinents et ajouter de la valeur. to push for change to stay relevant and add Nous, en tant que collectif d’experts indévalue. pendants, disposons d’une immense quantité de We, as a collective group of independent données, de renseignements et de compétences. adjusters, have an immense store of data, Nous devons continuer à exploiter les données, à intelligence and expertise. We need to conéduquer et à former notre personnel et à être rétinue to mine the data, educate and train munérés équitablement pour l’expertise que nous our staff and be compensated fairly for the apportons. expertise that we bring to the table. L’ACEI a mandaté un cabinet indépendant pour CIAA has conducted a rate survey effectuer un sondage sur les taux et a récemment parthrough an independent firm and has retagé un résumé avec la direction de l’association, lacently shared a summary with the assoquelle publiera prochainement sa ligne directrice sur ciation executive and will be issuing a rate les taux. En tant qu’association, nous ne pouvons pas guideline in the near future. As an associafixer de taux ni même en discuter, et nous devons restion we cannot set rates or even discuss them, pecter les règlements énoncés dans les orientations and are required to stay within the regudu droit de la concurrence pour les administrateurs lations set out in the “Competition Law d’organismes à but non lucratif. Orientation for Directors of Non-Profit Ce que nous pouvons faire, cependant, c’est Organizations”. d’ é mettre une ligne directrice sur les taux recomWhat we can do, though, is issue a guidemandés par ligne de couverture. Nous ne pouvons line of recommended rates by line of cover. pas obliger les membres à facturer les tarifs dans la We cannot enforce members to charge ligne directrice, mais nous, en tant qu’association, the rates within the guideline but we, as an association, can provide that suggesThe profession of claims adjusting pouvons fournir cette suggestion. Je vous encourage vivement à passer en revue la ligne directrice tion. I strongly encourage you to review the got its start after the great avec votre personnel et vos clients lorsqu’elle sera guideline with your staff and clients when it Fire of London in 1666 publiée. arrives. continued on page 8... www.claimscanada.ca

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Not only do we need to push the profession to stay relevant and add value, we need to push our association as well. We need to be a collective voice to continue to promote our services and illustrate the benefits to our clients. We need to continue to drive government bodies on licensing requirements both for business as usual and for catastrophic situations. We need to continue to make available to our members all forms of education and training. We need to have a forum to talk to our clients in a very open, honest and transparent fashion about current issues and future challenges. We need member engagement and participation to make that happen. Apathy can be the cancer to an association. I encourage members to sit up to the table, speak up and out and work to not only preserve, but also heighten your profession. I was honoured to have served as your president in 2016/17 and thank all of those on the executive and all of those that I have met for your support, participation and comradery. I wish Monica Kuzyk all of the best in 2017/18 and can assure everyone that you are in good hands with Monica as your president. ■ Sincerely, Heather Matthews

Non seulement nous devons faire en sorte que le métier demeure pertinent et ajoute de la valeur, mais nous devons également faire avancer notre association. Nous devons, d’une voix commune, continuer à promouvoir nos services et en montrer les avantages à nos clients. Nous devons continuer à presser les organismes gouvernementaux pour nous assurer que les exigences en matière de permis répondent aux besoins de l’industrie en situations normales comme en situations de crise. Nous devons continuer de mettre à la disposition de nos membres toutes les formes d’éducation et de formation possibles. Nous devons avoir un forum pour parler à nos clients de manière très ouverte, honnête et transparente à propos des problèmes actuels et des défis futurs. Nous avons besoin de l’engagement et de la participation des membres pour que cela se produise. L’apathie peut être le cancer d’une association. J’encourage les membres à s’asseoir ensemble, à se parler et à travailler non seulement à préserver, mais aussi à faire grandir votre profession. Ce fut un honneur d’être votre présidente en 2016-2017. Je remercie de leur appui, de leur participation et de leur camaraderie tous les membres de la direction et tous les gens que j’ai rencontrés. Je souhaite tous mes vœux de succès à Monica Kuzyk pour 2017-2018. Je peux vous assurer que vous êtes entre bonnes mains avec Monica comme présidente. ■ Salutations, Heather Matthews

NATIONAL EXECUTIVE 2016 - 2017 PRESIDENT Heather Matthews, CIP, CRM, CIOP Crawford & Company (Canada) Inc. 539 Riverbend Dr. Kitchener, ON N2K 3S3 Phone: (519) 578-5540 Fax: (519) 578-2868 E-mail: Heather.Matthews@crawco.ca 1ST VICE-PRESIDENT Monica Kuzyk, FCIP, CRM Curo Claims Services 125 Northfield Dr. W., P.O. Box 218 Waterloo, ON N2J 3Z9 Phone: (866) 952-2876 Fax: (519) 888-9704 E-mail: mkuzyk@curocanada.com 2ND VICE-PRESIDENT Lee Powell Vericlaim Canada 5915 Airport Road, Suite 201 Mississauga, ON L4V 1T1 Phone: (905) 671-7834 Fax: (905) 671-7819 E-mail: lee.powell@vericlaim.ca SECRETARY Jeff Edge, CIP, CFEI Leading Edge Claims Services Inc. P.O. Box 1399, 78 Highway 20 West Fonthill, ON L0S 1E0 Phone: (289) 897-8676 Fax: (289) 897-8677 E-mail: jeff@leadingedgecs.ca

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TREASURER John D. Seyler, CIP Integrated Insurance Resources 5080 Timberlea Blvd., Suite 214 Mississauga, ON L4W 4M2 Phone: (905) 238-4985 Fax: (905) 238-2735 E-mail: jseyler@integrated-ins.ca PAST-PRESIDENT Fred R. Plant, AIIC ClaimsPro 85 Englehart Street Dieppe, NB E1A 8K2 Phone: (506) 853-8507 Fax: (506) 853-8501 E-mail: fred.plant@scm.ca EXECUTIVE DIRECTOR Patricia M. Battle Canadian Independent Adjusters’ Association/ L’Association Canadienne des Experts Indépendants Centennial Centre, 5401 Eglinton Avenue West, Suite 100 Etobicoke, ON M9C 5K6 Phone: (416) 621-6222 Toll Free: 1-877-255-5589 Fax: (416) 621-7776 E-mail: pbattle@ciaa-adjusters.ca DIRECTOR Paul Féron, FCIP, CRM ClaimsPro 210 – 746 Baseline Rd. East London, ON N6C 5Z2

August/September 2017

Phone: (519) 645-6500 Fax: (519) 645-2250 E-mail: paul.feron@scm.ca

Phone: (905) 896-8181 Fax: (905) 896-3485 E-mail: apoon@cl-na.com

DIRECTOR Lorri Frederick ClaimsPro 120 Adelaide St. W., Suite 2401 Toronto, ON M5H 1T1 Phone: (905) 308-6292 Fax: (416) 360-7335 E-mail: lorri.frederick@scm.ca

DIRECTOR Marie C. Gallagher, FCIP, CRM Kernaghan Adjusters Limited 602 – 1 St. Paul Street St. Catharines, ON L2R 7L3 Phone: (289) 786-1074 Fax: (289) 723-1979 E-mail: mgallagher@kernaghan.com

DIRECTOR James B. Eso, CIP, CIOP Crawford & Company (Canada) Inc. 539 Riverbend Drive Kitchener, ON N2K 3S3 Phone: (519) 578-5540 Fax: (519) 578-2868 E-mail: Jim.Eso@crawco.ca DIRECTOR E. Grant King, BA, B.Ed., CIP Crawford & Company (Canada) Inc. 120 – 237 Brownlow Avenue Dartmouth, NS B3B 2C7 Phone: (902) 468-7787 Fax: (902) 468-5822 E-mail: Grant.King@crawco.ca DIRECTOR Albert Poon, CIP Cunningham Lindsey Canada Claims Services Ltd. 1102 – 50 Burnhamthorpe Rd. W. Mississauga, ON L5B 3C2

DIRECTOR Craig J. Walker, CIP, FCIAA, FIFAA Maltman Group International 2001 Sheppard Ave. East, Suite 810 Toronto, ON M2J 4Z8 Phone: (416) 492-4411 Fax: (416) 492-5657 E-mail: cwalker@maltmans.com DIRECTOR Gary Ellis, BBA, FCIP, RF, FCLA, FCIAA, FIFAA AMG Claims Inc. P.O. Box 20102 Sherwood Charlottetown, PE C1A 9E3 Phone: (902) 628-9091 Fax: (902) 628-9093 E-mail: gary.ellis@amgclaims.ca

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CIAA REGIONAL PRESIDENTS 2016 – 2017 NEWFOUNDLAND & LABRADOR Gejapathy Gopal, CRM ClaimsPro 27 Duffy Place, P.O. Box 8686, Station A St. John’s, NL A1B 3T1 Phone: (866) 726-7815 Fax: (709) 726-6106 E-mail: gejapathy.gopal@scm.ca NOVA SCOTIA Michael Connolly, BA, CFEI, CIP ClaimsPro 238 Brownlow Avenue, Suite 300 Dartmouth, NS B3B 1Y2 Phone: (877) 514-6269 Fax: (902) 425-9918 E-mail: michael.connolly@scm.ca NEW BRUNSWICK & PRINCE EDWARD ISLAND Greg Potten, BPE, CIP, CFEI AMG Claims Inc. 212 Queen Street, Unit 308 Fredericton, NB E3B 1A8 Phone: (506) 458-9000 Fax: (506) 458-9595 E-mail: greg.potten@amgclaims.ca QUEBEC/AESIQ Michel Lacelle, PAA/CIP ClaimsPro 255 Crémazie Est, 2e étage Montréal, QC H2M 1M2 Phone: (514) 340-8959 Fax: (514) 342-5474 E-mail: michel.lacelle@scm.ca ONTARIO Niki McConnell, BA (Hons.), CIP, CRM TC Insurance Adjusters Ltd. 6-2400 Dundas Street West, Suite 388 Mississauga, ON L5K 2R8 Phone: (877) 663-0701 Fax: (905) 916-0242 E-mail: nmc@tcia.ca MANITOBA Craig Shanks, BA, CIP Wheat City Claims Services Ltd. 64 Regent Cres. Brandon, MB R7B 2W9 Phone: (204) 725-7436 Fax: (204) 725-7437 E-mail: craig.shanks@mymts.net SASKATCHEWAN Lee Dixon, B. Comm., CIP Midwest Claims Services #7 – 1622 Ontario Ave. Saskatoon, SK S7K 1S8 Phone: (306) 668-0870 Fax: (306) 249-4114 E-mail: lee@midwestclaims.ca WESTERN Jody Schmidt, B. Comm., CIP Crawford & Company (Canada) Inc. 600, 10709 Jasper Ave. Edmonton, AB T5J 3N3 Phone: (780) 486-8024 Fax: (780) 486-9001 E-mail: Jody.Schmidt@crawco.ca PACIFIC Stacy Phillips, B.Comm., CRM, FCIP ClaimsPro 600, 1111 Melville Street Vancouver, BC V6E 3V6 Phone: (888) 681-6331 Fax: (604) 681-6388 E-mail: stacy.phillips@scm.ca

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National Standing Committees 2016-2017 ADVISORY Monica Kuzyk, FCIP, CRM Curo Claims Services 125 Northfield Dr. W., P.O. Box 218 Waterloo, ON N2J 3Z9 Phone: (866) 952-2876 Fax: (519) 888-9704 E-mail: mkuzyk@curocanada.com Lee Powell Vericlaim Canada 5915 Airport Road, Suite 201 Mississauga, ON L4V 1T1 Phone: (905) 671-7834 Fax: (905) 671-7819 E-mail: lee.powell@vericlaim.ca Fred R. Plant, AIIC ClaimsPro 85 Englehart Street Dieppe, NB E1A 8K2 Phone: (506) 853-8507 Fax: (506) 853-8501 E-mail: fred.plant@scm.ca Paul Féron, FCIP, CRM ClaimsPro 210 – 746 Baseline Rd. East London, ON N6C 5Z2 Phone: (519) 645-6500 Fax: (519) 645-2250 E-mail: paul.feron@scm.ca Lorri Frederick ClaimsPro 120 Adelaide St. W., Suite 2401 Toronto, ON M5H 1T1 Phone: (905) 308-6292 Fax: (416) 360-7335 E-mail: lorri.frederick@scm.ca James B. Eso, CIP, CIOP Crawford & Company (Canada) Inc. 539 Riverbend Drive Kitchener, ON N2K 3S3 Phone: (519) 578-5540 Fax: (519) 578-2868 E-mail: Jim.Eso@crawco.ca E. Grant King, BA, B.Ed., CIP Crawford & Company (Canada) Inc. 120 – 237 Brownlow Avenue Dartmouth, NS B3B 2C7 Phone: (902) 468-7787 Fax: (902) 468-5822 E-mail: Grant.King@crawco.ca Albert Poon, CIP Cunningham Lindsey Canada Claims Services Ltd. 1102 – 50 Burnhamthorpe Rd. W. Mississauga, ON L5B 3C2 Phone: (905) 896-8181 Fax: (905) 896-3485 E-mail: apoon@cl-na.com Marie C. Gallagher, FCIP, CRM Kernaghan Adjusters Limited 602 – 1 St. Paul Street St. Catharines, ON L2R 7L3 Phone: (289) 786-1074 Fax: (289) 723-1979 E-mail: mgallagher@kernaghan.com Craig J. Walker, CIP, FCIAA, FIFAA Maltman Group International 2001 Sheppard Ave. East, Suite 810 Toronto, ON M2J 4Z8 Phone: (416) 492-4411 Fax: (416) 492-5657 E-mail: cwalker@maltmans.com CIAA NATIONAL INSURANCE INDUSTRY ADVISORY BOARD Patti M. Kernaghan, FCIP, CRM Kernaghan Adjusters Limited 300 - 1445 West Georgia Street Vancouver, BC V6G 2T3 Phone: 1-800-387-5677 Fax: 1-800-387-5644 E-mail: pkernaghan@kernaghan.com Heather Matthews, CIP, CRM, CIOP Crawford & Company (Canada) Inc. 539 Riverbend Dr. Kitchener, ON N2K 3S3 Phone: (519) 578-5540 Fax: (519) 578-2868 E-mail: Heather.Matthews@crawco.ca Monica Kuzyk, FCIP, CRM Curo Claims Services 125 Northfield Dr. W., P.O. Box 218 Waterloo, ON N2J 3Z9 Phone: (866) 952-2876 Fax: (519) 888-9704 E-mail: mkuzyk@curocanada.com Fred R. Plant, AIIC ClaimsPro 85 Englehart Street Dieppe, NB E1A 8K2

Phone: (506) 853-8507 Fax: (506) 853-8501 E-mail: fred.plant@scm.ca Patricia M. Battle Canadian Independent Adjusters’ Association/L’Association Canadienne des Experts Indépendants Centennial Centre, 5401 Eglinton Ave. West, Suite 100 Etobicoke, ON M9C 5K6 Phone: (416) 621-6222 Toll Free: 1-877-255-5589 Fax: (416) 621-7776 E-mail: pbattle@ciaa-adjusters.ca Albert Poon, CIP Cunningham Lindsey Canada Claims Services Ltd. 1102 – 50 Burnhamthorpe Rd. W. Mississauga, ON L5B 3C2 Phone: (905) 896-8181 Fax: (905) 896-3485 E-mail: apoon@cl-na.com

COMMUNICATIONS Richard Swierczynski, BA, CIP AZ Claims Services Inc. 1500 Upper Middle Rd., Unit #3, P.O. Box 76041 Oakville, ON L6M 3G3 Phone: (905) 825-0027 Fax: (905) 825-5543 E-mail: richard@azclaims.ca John D. Seyler, CIP Integrated Insurance Resources 5080 Timberlea Blvd., Suite 214 Mississauga, ON L4W 4M2 Phone: (905) 238-4985 Fax: (905) 238-2735 E-mail: jseyler@integrated-ins.ca

Marie C. Gallagher, FCIP, CRM Kernaghan Adjusters Limited 602 – 1 St. Paul Street St. Catharines, ON L2R 7L3 Phone: (289) 786-1074 Fax: (289) 723-1979 E-mail: mgallagher@kernaghan.com Craig J. Walker, CIP, FCIAA, FIFAA Maltman Group International 2001 Sheppard Ave. East, Suite 810 Toronto, ON M2J 4Z8 Phone: (416) 492-4411 Fax: (416) 492-5657 E-mail: cwalker@maltmans.com Ian Frost, FCIP Wawanesa Mutual Insurance Company 191 Broadway Winnipeg, MB R3C 3P1 Phone: (204) 985-3886 Fax: (204) 942-7724 E-mail: ifrost@wawanesa.com Tim Guernsey RSA Canada 18 York Street, Suite 800 Toronto, ON M5J 2T8 Phone: (416) 366-7511 Fax: (416) 367-9869 E-mail: tim.guernsey@rsagroup.ca Peter Hohman Insurance Institute of Canada 18 King Street East, 6th Floor Toronto, ON M5C 1C4 Phone: (416) 362-8586 Fax: (416) 362-1126 E-mail: phohman@insuranceinstitute.ca Glen Hopkinson XL Insurance Company SE 100 Yonge Street, Suite 1200 Toronto, ON M5C 2W1 Phone: (647) 277-8650 E-mail: glen.hopkinson@xlcatlin.com Dan Langer CICMA Ontario Chapter President c/o CIAA 5401 Eglinton Ave. W., Suite 100 Etobicoke, ON M9C 5K6 Phone : (416) 621-6222 Fax : (416) 621-7776 E-mail: danlanger@sympatico.ca Justin MacGregor Governor, IBAC 151 Rose Glen Rd. Port Hope, ON L1A 3V6 Phone: (905) 885-1551 E-mail: 2justinmacgregor@gmail.com Penny McCune SGI Canada 2260 11th Avenue Regina, SK S4P 0J9 Phone : 844 855-2744 E-mail : pmccune@sgicanada.ca Alex Walker, CIP Aviva Canada 2206 Eglinton Ave. E. Toronto, ON M1L 4S8 Phone: (866) 692-8482 E-mail: alex_walker@avivacanada.com Tina Gardiner, B.Sc.,CRM, CIP The Regional Municipality of York 17250 Yonge Street Newmarket, ON L3Y 6Z1 Phone: 1-877-464-9675 E-mail: tina.gardiner@york.ca

P.O. Box 76041 Oakville, ON L6M 3G3 Phone: (905) 825-0027 Fax: (905) 825-5543 E-mail: richard@azclaims.ca

Fred R. Plant, AIIC ClaimsPro 85 Englehart Street Dieppe, NB E1A 8K2 Phone: (506) 853-8507 Fax: (506) 853-8501 E-mail: fred.plant@scm.ca CONSTITUTION & RULES Paul Féron, FCIP, CRM ClaimsPro 210 – 746 Baseline Rd. East London, ON N6C 5Z2 Phone: (519) 645-6500 Fax: (519) 645-2250 E-mail: paul.feron@scm.ca CONVENTION Paul Hancock, B.Sc., CIP Crawford & Company (Canada) Inc. 300 – 123 Front Street West Toronto, ON M5J 2M2 Phone: (416) 867-1188 Fax: (416) 867-1925 E-mail: Paul.Hancock@crawco.ca DESIGNATION/EDUCATION Gary Ellis, BBA, FCIP, RF, FCLA, FCIAA, FIFAA AMG Claims Inc. P.O. Box 20102 Sherwood Charlottetown, PE C1A 9E3 Phone: (902) 628-9091 Fax: (902) 628-9093 E-mail: gary.ellis@amgclaims.ca Robert V. Pearson, CLA, FCIAA CIAA Honorary Life Member c/o CIAA National Office 5401 Eglinton Ave. W., Suite 100 Etobicoke, ON M9C 5K6 Phone: (416) 621-6222 Fax: (416) 621-7776 E-mail: info@ciaa-adjusters.ca Lorne Montgomery, CIP, FCIAA, FCLA Crawford & Company (Canada) Inc. 300-123 Front St. W. Toronto, ON M5J 2M2 Telephone: 416-867-1188 Fax: 416-867-1925 E-Mail: lorne.montgomery@crawco.ca EDITORIAL Mary Charman, CIP Crawford & Company (Canada) Inc. 1 – 120 Mulock Dr. Newmarket, ON L3Y 7C5 Phone: (905) 898-0008 Fax: (905) 898-1705 E-mail: Mary.Charman@crawco.ca John M. Sharoun, FCIP, FCIAA, CRM Crawford & Company (Canada) Inc. 300 – 123 Front Street West Toronto, ON M5J 2M2 Phone: (416) 867-1188 Fax: (416) 867-1925 E-mail: John.Sharoun@crawco.ca EMERGENCY MEASURES Richard Van Horne Action Investigations Inc. 2 Catelina Court Dartmouth, NS B2X 3G9 Phone: (902) 462-1222 Fax: (902) 462-3688 E-mail:richardvanhorne@actioninvestigations.ca

FINANCE John D. Seyler, CIP Integrated Insurance Resources CAREER RECRUITMENT PLANNING 5080 Timberlea Blvd., Suite 214 Mississauga, ON L4W 4M2 Richard Swierczynski, BA, CIP Phone: (905) 238-4985 AZ Claims Services Inc. 1500 Upper Middle Rd., Unit #3, Fax: (905) 238-2735

August/September 2017

E-mail: jseyler@integrated-ins.ca Heather Matthews, CIP, CRM, CIOP Crawford & Company (Canada) Inc. 539 Riverbend Dr. Kitchener, ON N2K 3S3 Phone: (519) 578-5540 Fax: (519) 578-2868 E-mail: Heather.Matthews@crawco.ca Fred R. Plant, AIIC ClaimsPro 85 Englehart Street Dieppe, NB E1A 8K2 Phone: (506) 853-8507 Fax: (506) 853-8501 E-mail: fred.plant@scm.ca IBC: LIAISON, LEGISLATIVE & FORMS Paul Hancock, B.Sc., CIP Crawford & Company (Canada) Inc. 300 – 123 Front Street West Toronto, ON M5J 2M2 Phone: (416) 867-1188 Fax: (416) 867-1925 E-mail: Paul.Hancock@crawco.ca LICENSING J. Miles O. Barber, B.Comm. (Hons.), FCIP, CRM, RF Network Adjusters Ltd. 67 Folkestone Blvd. Winnipeg, MB R3P 0B4 Phone: (204) 897-5793 Fax: (204) 897-5797 E-mail: mbarber@mts.net MEMBERSHIP & QUALIFICATIONS Marie C. Gallagher, FCIP, CRM Kernaghan Adjusters Limited 602 – 1 St. Paul Street St. Catharines, ON L2R 7L3 Phone: (289) 786-1074 Fax: (289) 723-1979 E-mail: mgallagher@kernaghan.com NOMINATING Fred R. Plant, AIIC ClaimsPro 85 Englehart Street Dieppe, NB E1A 8K2 Phone: (506) 853-8507 Fax: (506) 853-8501 E-mail: fred.plant@scm.ca Heather Matthews, CIP, CRM, CIOP Crawford & Company (Canada) Inc. 539 Riverbend Dr. Kitchener, ON N2K 3S3 Phone: (519) 578-5540 Fax: (519) 578-2868 E-mail: Heather.Matthews@crawco.ca Lorri Frederick ClaimsPro 120 Adelaide St. W., Suite 2401 Toronto, ON M5H 1T1 Phone: (905) 308-6292 Fax: (416) 360-7335 E-mail: lorri.frederick@scm.ca James B. Eso, CIP, CIOP Crawford & Company (Canada) Inc. 539 Riverbend Drive Kitchener, ON N2K 3S3 Phone: (519) 578-5540 Fax: (519) 578-2868 E-mail: Jim.Eso@crawco.ca Craig J. Walker, CIP, FCIAA, FIFAA Maltman Group International 2001 Sheppard Ave. East, Suite 810 Toronto, ON M2J 4Z8 Phone: (416) 492-4411 Fax: (416) 492-5657 E-mail: cwalker@maltmans.com PRIVACY James B. Eso, CIP, CIOP Crawford & Company (Canada) Inc. 539 Riverbend Drive Kitchener, ON N2K 3S3 Ph: (519) 578-5540 Fax: (519) 578-2868 E-mail: Jim.Eso@crawco.ca Keith P. Edwards, FCILA, CLA, FUEDI-ELAE — ClaimsPro 120 Adelaide St. W., Suite 2401 Toronto, ON M5H 1T1 Ph: (416) 777-4479 Fax: (416) 360-7335 E-mail: keith.edwards@scm.ca PROFESSIONAL PRACTICES Fred R. Plant, AIIC — ClaimsPro 85 Englehart Street Dieppe, NB E1A 8K2 Phone: (506) 853-8507 Fax: (506) 853-8501 E-mail: fred.plant@scm.ca

Claims Canada

The Times They Are A-Changin' â&#x20AC;&#x201C;

e g a r e v o C e c n a r u s The Evolution of In

for Medical Marijuana

By Helen D.K. Friedman and Evan Bawks

s we celebrate the 50th Anniversary of the Summer of Love (19672017), listening to vinyl/download versions of Jefferson Airplane, Janis Joplin and the Grateful Dead, it is clear some aspects of counter-culture have become mainstream. With the advent of new Health Canada Regulations in 2015, following the Supreme Court’s ruling that users of medical marijuana should be permitted to consume the product in more varied forms than smoking dried buds, the demand for insurers to cover medical marijuana under benefit plans has increased exponentially. At the same time, the current retreat from opioid prescription has left a gap in products available to treat chronic pain. These factors are shifting the landscape and mindset of employers, insurers and adjudicators towards coverage extension. Most recently, the food giant Loblaws extended coverage for medical marijuana to its approximately 45,000 employees under policies managed by Manulife and Great-West Life. It is possible that Loblaws’ extension of coverage is simply a supply chain support to the Shoppers Drug Mart application to Health Canada for the license required to sell medical marijuana. (Loblaws attributes the extension to evolving clinical evidence for use as treatment for specific medical conditions). Setting supply chain innovation aside, extension of coverage under insurance plans and by statutory tribunals has been well underway for years. Adjudicators, employers and insurers are tuning in, turning on (the benefits coverage) and dropping out (of coverage denials).

Background – Regulatory Scheme for Medical Marijuana In R. v. Parker, 2000 CanLII 5762 (ONCA), the Ontario Court of Appeal considered the impact of medical marijuana in the context of a criminal proceeding under the Controlled Drugs and Substances Act (CDSA). The accused Parker was suffering from epilepsy and found smoking marijuana substantially reduced instances of seizure. Since he had no legal source of marijuana, he cultivated it for himself, which led to him being charged under the CDSA. The Court of Appeal held the lack of a viable medical exemption from the enforcement provisions under CDSA violated the accused’s constitutional right to life, liberty and security of the person pursuant to section 7 of the Charter of Rights and Freedoms, as it would force individuals to choose between their liberty and their health. Parker eventually led the federal government to establish the Marihuana Medical Access Regulations (MMAR) which set out a framework for an individual, with appropriate authorization from a medical practitioner, to access marijuana for medical purposes. Pursuant to the MMAR, an individual with appropriate authorization could purchase marijuana from

Helen D.K. Friedman offers her clients expertise, value, innovation, and a wealth of experience in a practice focused on the defence and risk assessment of first-party insurance claims. She is a leader in Miller Thomson’s insurance industry practice.

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Health Canada sources of supply or, upon approval from Health Canada, was permitted to cultivate marijuana for his or her own use. (Note that the federal statutes and regulations all use the spelling “Marihuana” instead of the more common “Marijuana”). In 2013, the federal government revised the guidelines for access to medical marijuana through the Marihuana for Medical Purposes Regulations (or MMPR), which made some changes to the MMAR and sought to restrict possession limits and licences for the providers of medical marijuana. Originally, only dried marijuana was permissible for use under the regulations. In June 2015, in R. v. Smith, 2015 SCC 34, the Supreme Court of Canada broadened the available forms of marijuana to be used for medical purposes to include cannabis oil and fresh marijuana buds and leaves, in addition to dried marijuana. The MMPR stipulated that the MMAR would phase out and be fully repealed by March 31, 2014. As a result of the prohibition on issuing licences and lowering possession amounts under the MMPR, an injunction was sought in the Federal Court (in Canada v. Allard, 2014 FC 280), to preserve the MMPR and to limit the provisions of the MMPR. Injunctive relief was granted and was upheld by the Federal Court of Appeal (2014 FCA 298). The full case on the merits was heard in 2016, with the Federal Court declaring that the entire MMPR was unconstitutional and leaving a period of time for Parliament to pass appropriate remedial regulations (2016 FC 236 & 237). As a result, the Access to Cannabis for Medical Purposes Regulations (ACMPR) came into force in February 2017. This regulation replaces the MMPR and MMAR and is the central mechanism for controlling medical marijuana in Canada. The Narcotic Control Regulations, CRC c. 1041, allows medical practitioners to prescribe marijuana despite the provisions of the CDSA, while the ACMPR (and previous MMAR and MMPR) dictates the circumstances under which the exemption could be exercised. Under the ACMPR, consumers of medical marijuana can access cannabis from a licenced producer by first becoming a client of the producer, which requires filing an application with the client’s information and obtaining a “medical document”, a term defined by the regulations. Applicants may, in lieu of providing a medical document, obtain a registration certificate issued by the Minister (which also requires a medical document). The registration certificate allows an individual to grow their own marijuana instead of purchasing it from a licenced producer. Section 129 provides that only residents of Canada may become clients of a licenced producer. The “medical document” information is set out in section 8, which states that a health care practitioner may provide a

Evan Bawks is an insurance defence lawyer whose litigation practice includes accident benefits disputes and tort cases involving motor vehicle accidents, property claims, and occupiers’ liability claims. He practices with Miller Thomson.

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medical document for a person under professional treatment which must include their personal information, the address where the consultation with the practitioner occurred, the daily quantity of marijuana, (in grams), which the practitioner authorizes for the person and the period of use (which cannot exceed one year). What medical marijuana does not have, however, is a Drug Identification Number (DIN). The absence of a DIN is a major barrier to insurance coverage and is also a deterrent to many doctors who are asked to prescribe it. A DIN confirms the product has been evaluated and approved for sale in Canada and identifies the manufacturer, brand name, medicinal ingredients, strength, pharmaceutical form and route of administration. According to the Canadian Life and Health Insurance Association, if medical marijuana was issued a DIN by Health Canada, it would be far more likely to be covered by health insurance. The process to obtain a DIN involves rigorous clinical research, generally including 10 year double blind studies. Instead, some licensed medical marijuana producers are assigning Product Identification Numbers (PINs). PINs are available when a drug or product is classified as an investigational drug or non-pharmaceutical. The purpose of the PIN is to make it as easy as possible for insurance administrators to approve or cover product costs under a benefit plan.

Context in Statutory Accident Benefits Cases (Ontario) Persons injured in motor vehicle accidents, particularly those with chronic pain and anxiety issues, are submitting requests for coverage to their accident benefits insurers. Currently, the Statutory Accident Benefits Schedule (SABS) provides medical benefits for: s.15(1) …all reasonable and necessary expenses incurred by…the insured personas a result of the accident for…(c) medication. (2) Despite subsection (1), the insurer is not liable to pay medical benefits (a) for goods or services that are experimental in nature. Further, section 38 provides: 38(2) An insurer is not liable to pay an expense in respect of a medical benefit…that was incurred 12

Claims Canada

before…a treatment plan…unless… (c) The expense is reasonable and necessary as a result of the impairment sustained by the insured person for, (i) drugs prescribed by a regulated health professional… Whether or not medical marijuana is experimental in nature may be somewhat fact specific, depending on the nature of the impairment. Medical marijuana may be considered experimental with respect to some impairments but not others. The cases below outline some of the considerations applied by SABS adjudicators pertaining to ‘experimental’, ‘reasonable and necessary’, administrative requirements and funding for medical marijuana.

TN v. The Personal Insurance Company of Canada, FSCO A06-000399, FSCO 3853 In Arbitrator Bayefsky’s seminal July 26, 2012 decision, medical marijuana was found to be a good and service of a medical nature. On the issue of whether or not it was experimental in nature, the insurer successfully established a prima facie case that, in general, the use of marijuana for treatment in neuropsychiatry (brain injury) was experimental. The Arbitrator then incorporated the reasoning in Paquette v. Certas, FSCO A05-000934 as to the meaning of “experimental in nature”. While accepting scientific principles should underlie the interpretation of terms, the SABS was intended to be a more remedial regime concerned with the provision of a therapeutic medical service. There was no requirement to prove with medical or scientific certainty that a treatment be therapeutic or effective. Accordingly, a low threshold was set. In TN, the Arbitrator accepted that the use of marijuana for some of TN’s symptoms, namely pain, anxiety, insomnia and poor appetite, would not be considered experimental. The fact that the use of marijuana to treat these symptoms remains controversial, did not relieve the insurer’s obligation to cover the cost provided that it was reasonably required as a result of the accident. As well, the Arbitrator noted evidence that conventionally prescribed medications (for pain) also carried significant risks and further accepted evidence that marijuana may be beneficial in mitigating those risks. (This line of reasoning has become even more cogent five years later.)

August/September 2017

Doyon v. Allstate Insurance Company of Canada, FSCO A15-002442, FSCO 4993 In this case, Doyon sought payment of medical marijuana expenses for the period June 2012 to November 2014 in the amount of $12,600. The insurer had agreed to fund the medical marijuana and/or related growing equipment provided it complied with the terms of Doyon’s licence. The stumbling block, however, was the provision of documentation confirming that the amounts claimed were provided by licensed suppliers in accordance with the terms of the licence. In this case, some of the marijuana and equipment had been purchased outside the terms of Doyon’s licence, specifically from “gray area” suppliers including compassionate societies. While accepting the insurer’s need to confirm properly incurred expenses, the Arbitrator was prepared to accept the Health Canada price guide and Doyon’s prescription for a specific level of consumption (in grams) to fill in the gaps. In so doing, the Arbitrator followed a Workplace Safety and Insurance Appeals Tribunal practice of accepting the Health Canada price with evidence of a specific level of consumption to set a monetary benefit. On a go forward basis, in order to satisfy the insurer’s requirement for proof, no less than once per year Doyon was required to submit written confirmation of the amounts of medical marijuana she was consuming.

MJ v. Pembridge Insurance Company, 2017 CanLII 1556 (ON LAT) MJ sought funding for two grams of medical marijuana per day. The insurer was prepared to fund the same, however required MJ to conform to the regulatory scheme. Specifically, the MMPR, which was still in force at the time, prescribed a “medical document” and the information required in the medical document to allow holders to possess medical marijuana. MJ was unable to produce a proper medical document to confirm entitlement to possess and use marijuana for medical purposes. Accordingly, the Tribunal agreed with the insurer, absent the proper medical documentation, the insurer was not required to fund the expense. Based on these decisions, expert evidence is available to support the argument that medical marijuana is not experiwww.claimscanada.DB

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mental in nature, at least for some conditions. Whether it is reasonable and/or necessary may be more fact specific. Another line of inquiry is whether consumption is as a result of the accident. The focus of the recent SABS decisions on the administrative aspects of funding rather than the therapeutic aspects of the product is a tacit admission that times have changed. Since SABS insurers are entitled to offset for collateral benefits, coverage developments outside the SABS context are becoming increasingly relevant.

Outside the Accidents Benefits Context A number of other tribunals have addressed entitlement and funding for medical marijuana in the broader insurance context.

Skinner v. Board of Trustees of the Canadian Elevator Industry Welfare Trust Fund, 2017 CanLII 3240 (NS HRC) This particular decision, under the Human

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Rights Commission of Nova Scotia, considered whether employee benefits under Skinner’s group plan could include coverage for medical marijuana (specifically, whether or not exclusion of coverage was a violation of the Human Rights Act in Nova Scotia). The plan restricted coverage to “medically necessary” drugs or medicine but did not define this term. The decision contains an in-depth and lengthy review of coverage considerations and policy language, including a number of Ontario Human Rights Tribunal decisions which generally found no grounds for discrimination when benefit plan administrators declined funding for medical marijuana. The Tribunal ultimately agreed that Skinner experienced discrimination as a result of the group plan’s decision to deny coverage and further held this decision was not supported by a reasonable justification. The Tribunal ruled in favour of coverage for medical marijuana. Reimbursement was ordered only when the medical marijuana was purchased from a producer licensed by Health Canada or a

person legally authorized to produce for the complainant.

Corporation of the City of Hamilton v. Hamilton Professional Firefighters Association, 2016 CanLII 16885 (ONLA) This labour arbitration decision relates to claim for payment of medical marijuana for a grievor’s spouse. Payment was denied as the expense was not covered by the group benefit plan and because the drug had not been assigned an identification number (DIN) by Health Canada under the Food and Drug Regulations. The collective bargaining agreement provided reimbursement for drug expenses specifically when the drug in question was approved by Health Canada under the Food and Drug Regulations. Although medical marijuana was approved for sale in Canada by Health Canada, it had not be incorporated by the Food and Drug Regulations. The arbitrator gave deference to the language in the collective agreement and the grievance was denied and dismissed.

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Decision No. 221/17, 2017 ONWSIAT 460 This recent Workplace Safety and insurance Act Tribunal (WSIAT) decision outlines the principles considered by the Tribunal when a worker seeks entitlement to reimbursement for the costs of medical marijuana from the Board following a workplace accident. Under the Workplace Safety and Insurance Act, a worker is entitled to health care benefits “as may be necessary” as a result of the injury. This includes “prescription drugs”. (Note that this wording is similar to SABS wording). The decision granted the worker’s application noting: [10] A number of Tribunal decisions have granted entitlement for medical marijuana as a necessary health care expense where the marijuana prescription is for a work-related injury, the worker has a severe impairment, and the worker has been granted an exemption by Health Canada to possess or cultivate marijuana for medicinal purposes. Tribunal decisions

have generally required that there be medical support for the use of marijuana to treat the compensable impairment and that other alternatives first be explored. [11] In Decision No. 2445/15, the Vice-Chair provided a succinct summary of the circumstances under which the Tribunal will provide funding for the use of medical marijuana. As stated in Decision No. 2445/15, the mainstream approach taken in previous Tribunal decisions (see Decision Nos. 480/15, 1393/14, 1537/12, and 491/12) where entitlement for medical marijuana has been granted is as follows: • The worker experiences constant and debilitating pain related to the worker’s compensable workplace accident; • The worker’s treating physician has recommended and/or prescribed medical marijuana to treat the worker’s ongoing debilitating pain; • The worker has obtained from

Health Canada the necessary authorization to legally possess medical marijuana with the approval of the worker’s physician; • Other methods of pain control have been tried to address the worker’s pain, but have proven to be less effective or practical than medical marijuana; and • There are no circumstances which make it inappropriate for the worker to use medical marijuana to treat ongoing pain. [12] Decision No. 2335/06I held as follows: The Panel does not dispute that there may be controversy in the medical community about the effectiveness of marijuana in relieving pain. The same may be said to be true of many types of medication however. Notwithstanding the controversy surrounding the success of marijuana as a treatment for pain, we see nothing in the legislation or policy which prohibits an adjudicator from

continued PO page 16

concluding that the use of marijuana could be an appropriate health care measure to be used in treating intractable pain arising from a compensable injury. While one would expect that the use of marijuana would be the exception rather than the rule in treating pain, we are satisfied that in the appropriate case, the prescription of marijuana is a form of treatment that can [sic] authorized for injured workers. In our view, this is one of those cases. We see no reason why requests for payment of marijuana-related expenses ought to be treated as excluded from the Act. As we interpret the legislation and policy, we believe it provides that entitlement to marijuana can be granted if the evidence establishes that it is required as a result of the injury and it improves the quality of life of a severely impaired worker. In reaching our decision, we have been particularly influenced by the

fact that Health Canada has seen fit to allow this worker access to marijuana. As noted in the Health Canada information included in the case materials, the Marijuana Medical Access Regulations, which came in to force on July 30, 2001, established a framework to allow access to marijuana by individuals suffering from â&#x20AC;&#x153;grave or debilitating illnesses, where conventional treatments are inappropriate or are not providing adequate reliefâ&#x20AC;?. Health Canada has approved the workerâ&#x20AC;&#x2122;s access to marijuana on this basis. [13] The above decision was interpreted by the Vice-Chair in Decision No. 882/15 to mean that using marijuana for medicinal purposes would be the exception and not the rule. Entitlement is granted in each cased based on the particular facts of the case. WSIB adjudicators continue to address the issue on a case-by-case basis, while acknowledging the benefits for treatment of certain symptoms. For other in-

surers, policy wording remains critical.

Coverage by Incremental Extension The extension of private insurance to cover medical marijuana is incremental. In March 2015, a University of Waterloo student, covered by Waterlooâ&#x20AC;&#x2122;s Student Health Plan, petitioned the University of Waterlooâ&#x20AC;&#x2122;s Student Union as the Plan Sponsor to ask Sun Life to make an exception under their plan to fund his medical marijuana. The student had exhausted other medications to ease his chronic headaches. He submitted his medical marijuana expenses under his plan and was denied. Following his presentation, the Student Union requested Sun Life make an exception and cover the costs. Sun Life confirmed medical marijuana is not an eligible expense in its standard benefit plans, but it would consider requests for exceptions if directed by the Plan Sponsor. Manulife advised of a similar policy in similar circumstances.

The extension of coverage does not mean University of Waterloo students were automatically covered for medical marijuana, rather, the door is open for others to follow the exemption process. The incremental approach allows insurers to justify payment on a case by case basis. Loblaws’s coverage, while groundbreaking is also incremental. The coverage is limited to $1,500 per year, with the actual cost of the product to plan members being significantly higher. Similarly, Loblaws’s coverage is only extended to treat symptoms of multiple sclerosis and the side effects of chemotherapy for cancer patients. Presumably, this accords with “grave or debilitating illnesses” criteria, where conventional treatments are not providing adequate relief. In the private plan context, Administrative Services Only plans or self-funded, self-insured plans are more likely to extend coverage. These plans are administered by insurance companies while the costs of coverage are paid by the

Claims Canada

August/September 2017

employers. Self-insured companies are able to choose what their benefit plans cover and in so doing, are responding to their employees’ needs. In this context, Windsor Ontario Union LIUNA Local 625 extended coverage for medical marijuana to its members as a means of reducing opioid use and the consequent and attendant costs of opioid addiction ultimately borne by the insurers, including OHIP. In keeping with safety concerns, LIUNA’s coverage extension allows for medical marijuana to its retired or permanently injured workers. For those members who are still on the job, only medical cannabis oil products with reduced THC will be covered. Union members pay for the prescription up front and are reimbursed. The Union intends to monitor how often opioids are prescribed after the extension of medical marijuana coverage, in order to determine whether their objective has been achieved. On June 15, 2017, the Ontario Public Service Employees Union (OPSEU)

introduced a plan allowing OPSEU employees, their spouses and dependants to claim up to $3,000 annually for medical marijuana. The product must be prescribed by licensed physicians and obtained from legally authorized vendors. Of note, coverage is not limited to specific medical conditions. With the advent of coverage extension under collateral benefit plans, accident benefits insurers may ultimately have the opportunity to offset some costs of medical marijuana claims. While coverage remains incremental, there are positive indications for future offsets, given the extension of coverage for medical marijuana under the WSIB, Quebec’s CSST, and Veterans’ Affairs via Blue Cross and the delisting of higher-strength opioid medications under the Ontario Drug Benefit program, effective January 2017. The delisting of these substances will create further demand for ‘safer’ (and more organic) pain control medication. There is no doubt that the times they are a changing.

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Exit interview Heather Matthews reflects on the claims industry and her year as CIAA president BY EMILY ATKINS

eather Matthews, senior vice president of the National Claims Management Centre at Crawford & Company (Canada) Inc, is in the final weeks of her year as president of CIAA. We decided to talk with Heather towards the end of her tenure, to learn what makes her tick and discover her thoughts on independent adjusting in Canada.

From criminology to claims Like many people who work in claims adjusting, Heather says, she “just fell into it”. With a background in criminology, she had realized she “wasn't cut out to be a cop,” but when she had a chance to join Waterloo Insurance as a telephone adjuster Heather quickly saw that “a lot of the stuff that I had learned from an investigative standpoint and the law was applicable to insurance claims.” She credits the experience gained during her first year on the job, when a large tornado hit Barrie, Ontario and the surrounding areas, for a very quick exposure to a huge volume of claims. She stayed there for three years as an adjuster, then as an examiner, which she says taught her a lot about the commercial side of the business. Eventually she decided that opportunity lay elsewhere and moved to Crawford & Company as a road adjuster covering all lines—property, liability, “pretty much everything”. In the early 1990s she got on board with Crawford's healthcare division, and after a brief detour with another employer, Heather returned to Crawford as the operations manager of the healthcare division. In 2011, as part of a restructuring, Crawford established a national claims 18

Claims Canada

management centre that was designed to “mirror an insurer”, including call centres for first notice of loss, vehicle appraisals and more, with 200 desk adjusters that handle all lines of claims. They task out the fieldwork to Crawford's adjuster network. Heather applied for the top job and was chosen to run the national claims management centre, which she has done for five years now. “My days now are spent doing budgets, forecasts, dealing with clients, any kind of escalation, staffing, human resources issues, making sure we're staffed properly, trying to grow the business efficiently and always looking at new opportunities,” she says.

Technology vs the human touch New technologies to streamline the claims process are among the most common new opportunities she's been seeing. “There isn't a week goes by I don't look at some form of technology,” she notes. For example, self-serve technology is big right now. “I could push an app out to an insured and they can photograph the item, they can do videos, they can have discussions as a video link with an adjuster who is managing the process,” Heather says. Technology is bringing the industry to a crossroads, she believes. It is increasingly coming into play, especially with low-value claims. But with other areas a lot of technical skills are still required. She notes that cyber, business interruption, machinery claims—lots in the commercial space—still need strong technical skills to properly investigate, and must be paired with strong people skills. “That's where I think we're at that

August/September 2017

crossroads, because technology is definitely having an impact, but we still see that push where people want to talk to a human and still want to be reassured,” she believes. Heather notes that the aftermath of the Fort McMurray wildfire last year people wanted one-on-one service. “They didn't want an email, they didn't want any form of technology, they wanted you to come see them and discuss their claims.” As a result, she says, the average time to intake a client was probably at least double because they just needed to talk to somebody. “As we try to push people to technology, in times of a crisis they don't want technology. But once the claim's established most will be okay with sending an update by text or something like that,” she says. “Trying to deliver bad news to someone is really difficult,” Heather says. “A denied claim is incredibly difficult. You can't just send them a text and say 'your hundred-thousand-dollar homeowners claim is denied', and think they're going to go away. You know it doesn't work that way.” Ultimately, she says, there is no substitute for the amazing people skills and communications skills that a good claims adjuster brings to the table. Technology will make it possible to avoid some of the more dangerous physical tasks an adjuster does—like climbing a ladder up to a roof, for example—but it won't replace the sympathetic ear of an experienced adjuster listening to an insured's tale of loss and woe.

A valuable association Since early in her career Heather has been active in CIAA, working on conwww.claimscanada.ca

tions and I think other industries have pushed us. We need to continue to really up our game on speed, efficiency, customer experience because [customers are] demanding it.”

Never bored

ferences and helping to recruit members to the association. She recalls having to overcome the objections of some who questioned the value of hanging out with their competitors in the adjusting industry. “I think once people get involved, they realize very quickly that there's tremendous networking opportunities,” she says. “Just to build your own network, whether it's through your competitors or through insurers or vendors to the industry, the knowledge that you get is extremely valuable. I think it's better to operate in a holistic, broad manner than to stick your head in the sand and only look at your own business and what's going on in your shop.” She also believes in the strength of the collective: “I feel there is a benefit in collectively promoting the group and the association. Whet her iths lobbying for legislative changes, or constantly rewww.claimscanada.ca

evaluating the education we provide to our members. Working with partners like the institute [the Insurance Institute of Canada] means instead of me being out there on my own, together we can say 'this is what we want to work on.'" As for taking on the top job, Heather says she knew it would be a lot of hours, and that she needed to do it to give back. And she wanted to share her notion of what the claims business needs. “As of now I have not tried to change the world in any way shape or form, it's really all about messaging and getting people to think about what we need to do,” she says. “My view has always been to embrace change and try to have transparent conversations to try to work through the issues. More than ever we have to really, really work on our skills and those aren't the technical skills, but the customer service skills. The population now has incredibly high expecta-

As with many in the claims business, Heather is in love with the variety the job affords. She notes that there is always something new to learn, different kinds of claims are continually popping up, and now with the rapid advances in technology there are even more learning opportunities. As well, she thinks about the importance of remembering that for many claimants it's the first time they've experienced a loss, and it's up to the adjuster to walk them though the process and explain how things work, as well as being that sounding board for their emotions. “We're not building bridges, we're dealing with people, and at the end of the day they're not just a policy number. We have the ability to make a positive impact and get them through that bad situation and get them out on the other side. And it's really rewarding; we still get hand-written notes from insureds and they are so thrilled at how we help them, and how we were there for them and comforted them and explained things to them.”

Curiosity, empathy and initiative While her love for claims shines brightly, Heather acknowledges it's not a career for everyone. Those who are considering work in the field need to have an endless curiosity, great empathy and communications skills and the ability to self manage. But those who “want to sit behind a machine and not communicate with people,” should look elsewhere for a satisfying career, she advises. That said, there are tremendous opportunities in the field at the moment. Young adjusters who come up through the ranks and work to develop an area of expertise are doing extremely well. “You've got flexibility with all the online systems now,” she says. “You run your book of business and the whole concept is not nine to five. I don't have to see you in the office to know that you're working.”

August/September 2017

Claims Canada

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Sign-Up at http://bit.ly/cudaily to receive Canadian Underwriterâ&#x20AC;&#x2122;s free DAILY e-Newsletter each morning â&#x20AC;&#x201C; containing all of the latest industry news, press releases, blogs, events, careers and more.

Tech advances reshaping insurable privacy risk As technology that tracks and records our daily lives becomes ubiquitous, privacy risk is moving beyond data breach and ransomware, which currently dominate media attention. Advances in technology are reshaping insurable privacy risk, yet scant attention is being paid to the full extent of the exposure involved in collecting and using data, and how best to insure associated risks. Insurance profit is generated through assessment of and protection from risk. Insurance companies, and those who act on their behalf, should

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be paying close attention to the growing tension between rapidly expanding technology and individual privacy interests. Opportunities are emerging. Using existing technologies, companies are able to collect almost incalculable amounts of data from individuals, including information on family status, employment, financial information, physical and mental health status, ethnic background, sexual orientation, immigration status and even a personâ&#x20AC;&#x2122;s regular daily habits. Many organizations believe they are allowed to use this data as they see fit. For the most part, consumers donâ&#x20AC;&#x2122;t understand how their data is being used and sold. But they will, and so

BY DAVID MACKENZIE

will their lawyers, who will be turning their attention to emerging and novel grounds of liability as technology erodes traditional fee-generating areas of practice, such as automobile-related personal injury claims. Privacy litigation, technology litigation, and regulatory litigation will be the new fodder for the plaintiffsâ&#x20AC;&#x2122; bar. Technology we could barely imagine a few years ago has already arrived. The Internet no longer exists solely on our computers and mobile devices. It is increasingly ambient, with many billions of sensors now in use in homes, workplaces, cars and in the environment generally. Many people are uncomfortable with the resulting loss of privacy. Until recently, individuals could largely control their electronic presence and persona. Increasingly, however, personal

August/September 2017

Claims Canada

data footprints are likely to generate as much disquiet for those concerned with privacy as carbon footprints do for environmentalists. It is a future fraught with risk, but also one that portends opportunities and competitive advantages for Canadian businesses and insurers. Because of these growing privacy concerns, new legal barriers are looming. How will companies that generate or obtain data be permitted to use it? Privacy rights, long an

afterthought, have come into their own, recognized both by legislation and ever more fully by judges, who are extending broad common law recognition to concepts characterized as “intrusion upon seclusion,” “public disclosure of private facts” and the “right to be forgotten.” The conflict between ever-increasing access to personal data and emerging limits on using that data foreshadows a great deal of litigation, early examples of which have recently

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emerged in the United States. Google has been sued for exploiting loopholes in cookie-blocking technology that allows advertisers to track users in ways to which they had not consented. LinkedIn faced litigation for accessing email contacts folders to seek out new users. Bose is fighting allegations that an app on its headphones surreptitiously collects customers’ listening habits and provides that information to third parties. Each of these claims engages privacy issues. Did Google intrude on seclusion by giving third parties access to information to which users had not consented? Did LinkedIn cast its users in a false light when it used their email contacts list to invite others to join LinkedIn, suggesting that the users themselves were involved in sending the invitation? Could disclosure of personal listening habits, as Bose is alleged to have done, embarrass headphone users with terrible tastes in music? While all the foregoing involve global corporations, privacy risk issues also exist on the most mundane levels: for example, can landlords use personal information collected by third parties to determine the suitability of tenants? Wearable technology, GPS tracking and connected medical devices compound the problem by collecting individuals’ health and physical activity data. How will companies exploit that knowledge? Do they risk liability in the approach they take? Snapchat’s new “Snapmap” function, when activated, can broadcast an individual’s whereabouts to every one of their contacts. Does the company risk exposure for tracking someone’s location within inches and disclosing that information to others? All these risks can arise from technologies that many Canadian businesses are already using. Virtually all of these risks are insurable. The dilemma facing the insurance industry relates to the type of coverage and the language under which these risks should be insured. “Cyber” coverage seems an obvious place to start. But the primary focus of these policies remains accidental or

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criminal breach, rather than privacy claims related to intentional business conduct. While some cyber policies may cover this risk, the lack of standard wording suggests that many will not. To the surprise of many, perhaps, coverage is also likely to be found in other commonly used standard form policies that expose insurers to an array of privacy risks. Many insurers have not updated their CGL, bricks and mortar property, or professional errors and omissions policies to exclude or eliminate coverage that is being sold and priced in the cyber and technology insurance markets. But as contexts have changed, the courts have not been afraid to expand existing coverage and language written in other times to make the consumer whole in the modern world. CGL coverage, for example, offers privacy coverage for publication of material in any manner that violates a person’s right to privacy. But the extent of the coverage in the modern context is unclear: did LinkedIn publish material that violated privacy rights when it sent emails to individuals found in customers’ contact folders? Did Google publish material that violated privacy rights when it circumvented cookie blockers by sending information from website to website as a user was surfing? What about Bose’s alleged sale of data pertaining to users’ love of early Styx albums? Is the CGL policy really the right place to cover privacy risks? Or should the industry be considering whether other policies (e.g. Cyber and Tech E&O) might be more effective? Unless the industry addresses these issues directly, only time will tell which policies will respond best. Better to understand the risk and underwrite it intentionally. “Accidental” coverage is an unpleasant and expensive surprise. Adding grist to the mill, a recent decision from the Supreme Court of Canada (SCC) suggests that Canada is emerging as fertile ground for privacy and technology-related claims. In Douez v. Facebook, the court characterized privacy rights as “quasi-constitutional”. On that basis, the court

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refused to enforce a clause in Facebook’s terms of service that required lawsuits against Facebook to be filed in California (a jurisdiction favorable to Facebook). In another recent decision establishing individual rights broader than in most other countries, the SCC ordered Google to take down all of a company’s websites, both inside or outside Canada. Clearly, the risks related to data breach are of great concern to Canadian businesses and insurers. At the

same time, a wave of privacy litigation may be emerging from under the radar. Canadian insurers will not want to ignore these developments, and will wish to consider how best to address them from an underwriting perspective. Risk, after all, creates opportunity for insurers. These new privacy risks are no exception. David Mackenzie is Partner, Insurance Practice at Blaney McMurtry LLP in Toronto, Ontario.

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How to weather a disaster with customer satisfaction intact

an understatement. According to J.D. Power, their claims satisfaction score fell 10 points this year on a thousandpoint scale. Compare that to national carriers, whose satisfaction score rose by more than 20 points within the same period. “When dealing with losses on the scale of the Fort McMurray fire, the logistical challenges faced by carriers can be overwhelming,” said Valerie Monet at J.D. Power.

BY DARA BANGA, FCIP, CFEI

It’s been a record year for catastrophic disasters in Quebec, said J.D. Power in a recent press release. As a result, regional insurers are under tremendous pressure, and the strain they feel has its mirror image in their customer satisfaction scores. However, there’s no reason that customer service has to suffer when resources are scare and the claims process is challenging. By focusing on big picture, start-to-finish customer satisfaction, insurers can emerge from catastrophes with satisfaction intact. To find out how, let’s take a look at the two most notable disasters making waves in the West. We’ll observe the impact they have on claims for regional insurers. Finally, we’ll explore what this year’s annual customer satiswww.claimscanada.ca

faction study by J.D. Power says about mitigating the worst effects.

Fort McMurray: Costs still smoldering Welcome to the largest insured disaster in Canadian history. Ten months after the 2016 wildfire swept Fort McMurray, MacEwan University estimated the cumulative damages (financial, physical, and social) at nearly $9 billion. Prior to that, Canada’s most expensive insured disaster was the Quebec ice storm of 1998, CBC News reported, in which insurers paid out $1.9 billion. Bear in mind: the current damage estimates regarding Fort McMurray are admittedly an underestimation. It may be years – even decades – before the full cost of the wildfire is fully calculated. To say that this event has challenged Western regional insurers is a bit of

Quebec: Lack of coverage, a splash in the face? Now let’s turn our attention from fire to water. Last May, nearly three thousand Quebec residents voluntarily evacuated their homes in response to “the heaviest rainfall we have seen in over 50 years,” CNN said. As dikes weakened, Montreal declared a state of emergency in what Mayor Denis Coderre described as “an exceptional and historic circumstance.” The insurance impacts are uncertain yet. But what we do know doesn’t bode well for customer satisfaction. According to J.D. Power, while almost half of customer respondents said they have overland flood coverage, the Insurance Bureau of Canada estimated that in fact, only 10 to 15 percent do. If customers weather a disaster thinking that they have coverage, only to find out, in their time of need, that they

August/September 2017

Claims Canada

don’t, there’s going to be some major grief where satisfaction is concerned.

Resources strained, satisfaction falling Obviously, disasters like these impose uncommon strain on the insurers they affect. And within this landscape, it’s uncommonly challenging to deliver a positive claims experience. As a result, we’ve seen a major decline in

claims satisfaction. To put it succinctly, “a spike in major claims has created significant challenges for insurance carriers, with Western regional carriers as a group experiencing a 10-point yearover-year decline in customer satisfaction with the claims process,” J.D. Power said. From a customer’s perspective, there are several claims complaints.

Your customer has a list of the vehicles that are covered by your ﬂeet policy. You have a list of the vehicles that are covered by that policy. And your lists aren’t the same. When the one vehicle that is involved in an accident is the one that doesn’t appear on both lists, do you know what happens next? ARC does.

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Two deserve special mention: • Claims payment cycles are longer than average • Annual premium increases following a claim are greater Now, strain is strain: you can’t blink it away. When resources are slim, some dissatisfaction is to be expected. That said, insurers can do much to mitigate the negative impacts of dissatisfaction in their claims process. How? By choosing to lean hard into customer service, big picture.

Two ways to achieve superior satisfaction despite the disasters In fact, the gains one can achieve by prioritizing customer service go well beyond simply mitigating the damage. Insurers may find they can raise their satisfaction scores, even while struggling to navigate major challenges in claims – to the extent that companies “that follow best practices for proactive customer communications can... achieve superior levels of customer satisfaction,” Monet said. To buck the dissatisfaction trend, focus on “providing truly great customer experiences even in periods of significant operational stress.” According to Monet, that’s an achievable goal even for insurers who are taking a flood of calls from the flooding in Quebec – even if the customer on the other end doesn’t have coverage. Steps to take Communicate: Managing customer expectations through the claims process makes a major difference for customer satisfaction. Let’s illustrate that point. Customers who’ve had to make a claim in the Western region report lower satisfaction than customers elsewhere – no surprise there. • Western region: 773 • Atlantic/Ontario region: 789 • Quebec: 812 But customers in the same region whose carriers provided a timeline for the process exceeded scores from all the regions mentioned above. In the Western region customers who were provided a timeline gave a satisfaction score of 823.

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Even if you’re struggling to deliver an above-average claims experience, make it a priority to communicate with customers so they know what to expect. Managing expectations can, in itself, improve claims satisfaction, even when other aspects of the process are less enjoyable. Look beyond claims: No matter how you’re doing right now in claims satisfaction, you may be able to push your score up the scale by finessing your non-claims customer interactions. Remember, while the claims experience is important, it’s only a small component of overall satisfaction. Even within the context of recent disasters, customer satisfaction has risen across the board by 37 points, J.D. Power noted, because insurers have been leveraging non-claims interactions to wow their customers. The J.D. Power study looks at five factors: • Non-claim interactions • Policy offerings • Pricing • Billing and payment • Claims

teraction, is by far the most important of the five. It’s also somewhat broader, encompassing interactions with local agents and brokers, with call centre service representatives and the insurer’s website.

What business are we in? There’s no doubt that disasters make customer satisfaction more challenging. That said, we’re in the business

of dealing with disasters. Therefore, more than any other industry, we in the insurance industry should make it our business to know how to maintain high satisfaction in the worst of times. Clearly, that process starts long before disaster strikes. Dara Banga, FCIP, CFEI, is the President of DSB Claims, headquartered in Brampton, Ontario.

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Some of these factors promise more opportunity for improvement than others. Of course, it’s important to make your offerings and pricing competitive, and, of course, you want your payment and billing system to be easy. It’s also vital to make your claims process fast and equitable, keeping payment cycles prompt and premiums affordable. But that first factor, non-claim in-

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August/September 2017

Claims Canada

Recovery for psychological injuries

Supreme Court decision puts physical and mental injury on equal footing BY TODD DAVIES AND JENNIFER GROENEWOLD

The Supreme Court of Canada released a unanimous decision in Saadati v. Moorhead, 2017 SCC 28 on June 2, 2017 and held that psychiatric injuries need no longer be proved by expert evidence. A Plaintiff can be awarded damages for mental injuries caused by a tortfeasor if they are able to show evidence of a serious and prolonged mental disturbance that rises above ordinary annoyances, anxieties, and fears that comes with living in a civil society. By way of background, Saadati was involved in five separate motor vehicle 28

Claims Canada

collisions between 2003 and 2009. This case arises from the action brought in the second car accident, which arose after Saadati's tractor-trailer was struck by the Hummer driven by Moorhead. Liability was admitted.

Decisions in the courts below Saadati was unavailable to testify at trial, having been found mentally incompetent in 2010, and his litigation was conducted through a litigation guardian. At the trial level the judge rejected the claim for physical injury arising from this accident; however, the trial judge did make an award for psychological injury based on the evidence of Saadati's friends and family. They testified that Saadati experienced a personality change and cognitive difficulties. Saadati was awarded $100,000

August/September 2017

in non-pecuniary damages. The British Columbia Court of Appeal overturned the decision on the basis that Saadati did not demonstrate a medically recognized psychiatric or psychological injury to support the award of non-pecuniary damages. Further, the Court of Appeal found that in awarding damages for mental injury, the trial judge erred by deciding an issue that was not “pleaded or argued” by the Plaintiff. In his Statement of Claim, Saadati entered a boiler plate pleading of “such further and other injuries as may become apparent…” and “the effects or results of the said injuries upon the Plaintiff include headaches, fatigue, dizziness, nausea and sleeplessness” as well as making claims under the broad heads of damages. www.claimscanada.ca

The Supreme Court of Canada decision The Supreme Court of Canada held that recovery for mental injury in negligence does not require a plaintiff to prove a specific recognized mental illness. In order to recover, the plaintiff must show that the psychological injury is serious, prolonged and more than ordinary emotional upset or distress; this claim can be assisted by expert evidence but expert evidence is not necessary to recover. The plaintiff must prove that the defendant owed the plaintiff a duty of care, that the defendant breached that duty of care, that the plaintiff sustained some psychological damage, and that there was a legal and factual causal relationship between the breach of the duty and the resulting claimed injury. The occurrence of a mental injury needs to be proven on a balance of probabilities and is open to rebuttal evidence, of an expert or otherwise. The Court stressed that the important factors to consider are the plaintiff’s symptoms and their effect, not the diagnosis involved. The Court discussed that the law of negligence must afford equal protections to victims of mental and physical injuries, citing that there is no need for a plaintiff to prove that a physical condition meets a threshold of diagnostic criteria. Writing for the Court, Justice Brown explained that if tort law does not afford identical treatment to mental and physical injuries, the law would continue to perpetrate a “dubious perception” of psychiatry and mental illness. The Court did not approve of the law as developed in the lower courts (and also applied in other jurisdictions like the UK, Australia, and New Zealand), which required plaintiffs alleging mental injury to prove, via expert evidence, that their injury qualified as a recognized psychiatric illness or condition. The Court held that confining recovery for a mental injury to conditions defined by a “diagnostic classification scheme” was flawed as a matter of legal methodology. In response to the concern that mental illness is subjective and easily exaggerated and that the law should not compensate "trivial matters", the court concluded that the elements of the cause of action of negligence are sufficient barriers to unmeritorious claims. The court cited Mustapha v. Mulligan of Canada Ltd., 2008 SCC 27 as evidence that the elements of the cause of action "furnish a sufficiently robust array of protections against unworthy claims" as well as addressing concerns regarding indeterminate liability, as Mustapha failed to prove his claim on causation. The court commented that where there is genuine factual uncertainty regarding the worthiness of a psychological injury claim, the trier of fact is in the best position to make that decision, similar to the trier of fact being left to make findings on a witness’s credibility. It remains open to the defendant, “in rebutting a claim, to call expert evidence establishing that the acwww.claimscanada.ca

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Claims Canada

cident cannot have caused any mental injury or at least any mental injury known to psychiatry”.

HAVE A TION RESTORA ? N QUESTIO

Sufficiency of pleadings The Supreme Court reiterated that cases should not be decided on grounds not raised in the pleadings. However, it held that in claims for negligently caused mental injury, it was generally sufficient that the Plaintiff’s pleadings allege some form of the injury. Justice Brown held that there were references and argument during the course of the trial to “psychological”, “emotional” or “psychiatric” that did not draw an objection from the defendants, and combined with the pleadings, provided ample notice to the defendants as to the case they had to answer.

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Conclusion The Supreme Court of Canada has explicitly put mental and physical injuries on equal footing with this judgment. Plaintiffs can recover for mental illness if they can show a serious and prolonged disturbance that rises above ordinary annoyances, anxieties, and fears. This evidence can come from the plaintiff, or from lay evidence such as from family or friends, and the claim does not necessarily need to be supported with expert opinion evidence. When assessing a claim, if there is a potential claim for psychological injuries it will be important for defence counsel to be alive to the issue, by investigating and planning for the appropriate rebuttal evidence, for example, by way of expert evidence, collateral witness evidence, or the use of surveillance. Procedurally, defence counsel need to be to alert to the potential for psychological claims, even when not specifically pleaded, as this case is a reminder that courts will construe a plaintiff’s pleadings liberally when considering whether they are sufficient to suggest a psychological injury. Defence counsel need to be quick to object if “psychological” or “emotional” evidence is first raised at trial if there is no basis for a psychological claim grounded in the pleadings. Todd Davies is a partner and Jennifer Groenewold is an associate with Alexander Holburn Beaudin + Lang LLP. Both practice with the firm’s insurance group and regularly team up in handling the defence of catastrophic personal injury claims.

Claims Canada

August/September 2017

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Alberta court issues Canada’s first cyber coverage decision in 5he Brick v. Chubb

BY ANNE JUNTUNEN

In a decision issued June 29, 2017, the Court of Queen’s Bench of Alberta held that a social engineering fraud did not meet the requirements for coverage under the Funds Transfer Fraud (“FTF”) insuring agreement of a commercial crime policy. In doing so, the court established The Brick Warehouse LP v. Chubb Insurance Company of Canada, 2017 ABQB 413, as Canada’s first legal precedent on the applicability of cyber coverage. At issue was an increasingly common cyber crime known as “social engineering fraud”. Borrowed from the social sciences, the term “social engineering” refers to the use of psychological manipulation to trick people into taking some action that will benefit a fraudster. In this case, a fraudster posed as a representative of one of The Brick’s trusted vendors and, through a series of emails and phone calls, he obtained enough information from The Brick’s accounts payable department to understand the department’s internal procedures for changing a vendor’s account information. The fraudster then used that knowledge to submit a request to The Brick to update its records to reflect that the vendor had a “new” bank account. The Brick’s accounts payable department, believing the request had come from the company’s vendor, complied. www.claimscanada.ca

Following the account information change, The Brick instructed its bank to pay the vendor’s legitimate receivables via a series of electronic transfer payments to the account it had on file for the vendor – i.e., the fraudulent account. By the time the fraud was discovered, the bank had already made several payments to the “new” bank account. The Brick attempted to recall the previous transactions, with only partial success. The Brick sought to recover the lost funds under the FTF insuring agreement of its Chubb commercial crime policy. That insuring clause provided that Chubb would pay for: direct loss sustained by an Insured, resulting from . . . Funds Transfer Fraud by a Third Party[.] The policy defined a “Third Party” as, essentially, a non-employee. The definition of “Funds Transfer Fraud” was: the fraudulent written, electronic, telegraphic, cable, teletype or telephone instructions issued to a financial institution directing such institution to transfer, pay or deliver Money or Securities from any account maintained by an Insured at such institution, without an Insured’s knowledge or consent. Chubb denied coverage on the basis that The Brick had not met all the requirements of the insuring agreement. The Brick disagreed and issued a coverage action in Alberta. The matter ultimately proceeded to a summary trial on an agreed statement of facts. At trial The Brick made a number of arguments about why it met the FTF coverage. It also argued, in the alternative, that it met the required elements for coverage under the policy’s Computer Fraud insuring agreement, which covered direct loss resulting from “Computer Fraud by a Third Party”. The policy defined “Computer Fraud” as “the unlawful taking of Money, Securities or Merchandise through the use of any Computer System”. Ultimately the court addressed only three of The Brick’s arguments in its decision: (1) the insured’s expectations regarding coverage, (2) the role of the “Third Party” in the fraud; and, (3) whether the insured had “knowledge or consent”.

The Insured’s Expectations About Coverage The court first addressed an argument that is commonly made by insureds whose insurers have denied coverage: that the insured expected the policy to protect it against a particular kind of loss. Here, The Brick said it had purchased a crime policy because it meant to protect itself against loss due to crime. The court dealt with this argument summarily, noting that, no doubt, The Brick intended to insure itself against crime, but that the insurance August/September 2017

Claims Canada

policy naturally restricted the kinds of crime losses it would cover. The Brick’s expectations did not affect the scope of coverage that was actually provided.

The Role of the “Third Party” The second argument had to do with the role played by the third party fraudster. The Brick argued that it was entitled to coverage so long as a third party had a role in the overall fraud. According to The Brick, the wording supported this interpretation because the insuring agreement simply required “Funds Transfer Fraud by a Third Party”, whereas the definition of “Funds Transfer Fraud” did not itself require a third party to play any specific role. Here, The Brick argued, it was enough that an outside fraudster had clearly masterminded the scheme and had, in some sense, caused the “Funds Transfer Fraud” to take place. This was important because the third party did not actually instruct The Brick’s bank to do anything – the third party fraudster instead duped

an employee into instructing the bank to make the transfer. Chubb submitted that, in order to meet the coverage requirements, fraudulent instructions must come from a third party and be sent to the insured’s bank. Chubb submitted that this was consistent with the purpose of coverage, which was to protect the insured against a risk it cannot reasonably avoid: that an unknown person will steal from the insured’s bank account by impersonating the insured in direct communications with the insured’s bank. Where transfer instructions bypass the insured entirely, there is little the insured can do to avoid the loss. In this case, however, the only instructions received by the insured’s bank had come from an authorized accounts payable employee. While that employee was clearly mistaken as to some of the information underlying those instructions, the instructions still came from the employee – not the third party. In making its arguments on this point,

Chubb urged the court to follow a decision from the US Ninth Circuit Court of Appeals that was, at the time of argument, only three weeks old: Taylor & Lieberman v. Federal Insurance Co., No. 15-56102 (9th Cir. Mar. 9, 2017). That case involved an FTF insuring agreement identical to the one in The Brick, with similar facts. The court in Taylor & Lieberman upheld a ruling that the insured was not entitled to coverage for a social engineering fraud because, among other things, the insured’s reliance on a fraudulent email to instruct a bank to transfer funds did not amount to a third party issuing instructions to a financial institution. Without explicitly adopting Taylor & Lieberman, the court noted the similarity of its facts before siding with Chubb, holding that the FTF insuring agreement required The Brick to “show that its bank transferred funds out of [T]he Brick’s account under instructions from a third party impersonating [T]he Brick.” Here, it was an employee – not a third party – who issued the instructions.

ACCIDENT BENEFITS SPECIALIST

Claims Canada

August/September 2017

www.claimscanada.ca

The Insured’s Knowledge or Consent The last issue the court dealt with was whether instructions were issued to the bank without The Brick’s “knowledge or consent”. The Brick argued that, even though its accounts payable employees did instruct its bank to make the transfers, the instructions were induced by a fraud that vitiated any knowledge or consent on the part of the insured. The Brick urged the court to interpret “consent” to require informed consent – something it said was absent here. Chubb argued that information obtained from a prior fraudulent communication – in this case, the information that the vendor had a new bank account – did not transform the employees’ transfer instructions into instructions given “without knowledge or consent”. The court sided with Chubb, holding that, because “consent” was not otherwise defined in the policy, it should be given its plain meaning: “permission for something to happen”.

www.claimscanada.ca

Here, The Brick’s employee permitted the bank to transfer funds out of The Brick’s account and the court held that this was sufficient to show the transfer took place “with either [T]he Brick’s knowledge or consent”. The end result was that the insured had not established the required elements of a covered loss under the FTF insuring agreement.

Implications of the Decision The court’s decision in The Brick is consistent with the underwriting intent of the FTF coverage, which is to reimburse the insured in the event the insured’s bank transfers funds out of the insured’s account under instructions from someone impersonating the insured. Where the insured itself issues those instructions, there is no coverage. The decision is also the first indication that Canadian courts are willing to join the body of US precedent drawing an increasingly bright line between the risk of an outside fraudster taking

some action (what FTF and Computer Fraud coverages are aimed at) and the risk of a fraudster duping an employee into taking an action (the risk addressed by social engineering coverages). When evaluating coverage in the wake of a loss, the role of the third party is key to determining which insuring agreement is likely to respond. For insureds, this decision shows the importance of examining whether the right coverage is in place for the risks they intend to insure against. Insureds who are concerned about the risks posed by social engineering schemes will want to consider purchasing a social engineering rider or standalone cyber coverage. Anne is an associate at Lerners LLP in Toronto and a member of Canadian Defence Lawyers. Her practice includes coverage advice and litigation in fidelity, directors’ and officers’, and cyber insurance matters. Anne and Jamieson Halfnight, a Lerners LLP partner, acted for Chubb in The Brick.

August/September 2017

Claims Canada

APPOINTMENT

â&#x20AC;˘ on the scene OTS

Aaron T. Lewicki Claude Blouin and Jamie Dunn, Partners at Blouin, Dunn LLP, are extremely pleased to announce that Aaron T. Lewicki has joined the ďŹ rm as an associate. Aaron received his Bachelor of Arts degree in Political Science and Legal Studies (Joint Honours), from the University of Waterloo in 2012, and subsequently obtained his Juris Doctor from the University of Windsor in 2015. As a student at Windsor Law, Aaron was an active member of the law school community. While completing his undergraduate degree, Aaron competed in four seasons of CIS varsity hockey split between Dalhousie University and University of Waterloo. Aaron is a four-time Academic All-Canadian. Aaron was called to the Ontario Bar in 2016. Before joining Blouin Dunn, Aaron worked for a well-known, full-service ďŹ rm in Hamilton where he gained valuable experience in insurance defence litigation. Aaron practices in the areas of civil litigation and insurance defence, with a focus on motor vehicle accidents, bodily and personal injury claims, property damage, occupiersâ&#x20AC;&#x2122; liability, and subrogation.

CIAA member Joanne Morgan of Crawford, Dartmouth NS, won a recent Canadian Association of Insurance Women (CAIW) national public speaking competition in Montreal. Joanne, centre, is shown receiving her award from Donna Brown, with sponsor Intact on left, and CAIW director, Jacki Lisi, on the right.

John Tung has joined Totten as vice president, professional lines. John brings over 23 years experience to this newly created role. Most recently he was AVP at a major US-based insurer, responsible for the strategy and underwriting of professional liability and cyber, with a focus on technology. A University of Toronto grad, John also holds a bachelor of commerce from Ryerson University. He is a Fellow Chartered Insurance Professional (FCIP) and a Fellow in Risk Management (FRM). â&#x20AC;&#x153;John got in on the JURXQG Ă RRU RI &\EHU DQG 7HFK ULVN LQ DQG KDV John Tung built a stellar reputation on delivering skilled underwriting,â&#x20AC;? says Denis Dei Cont, COO and executive vice president of Totten ,QVXUDQFH *URXS Â´+LV H[SHUWLVH ZLOO ERRVW EURNHU FRQĂ&#x20AC;GHQFH LQ WKLV FRPSOH[ ULVN Âľ 6SOLWWLQJ KLV WLPH EHWZHHQ WKH 2DNYLOOH 'XQGDV DQG 7RURQWR RIĂ&#x20AC;FHV John will be responsible for a team of professionals handling E&O, enhancing broker relationships, and developing new products. O

Outside of work Aaron enjoys cooking at home, live music, and physical ďŹ tness activities. Aaronâ&#x20AC;&#x2122;s contact information is: alewicki@blouindunn.com (416) 365-7888 ext. 170 Blouin Dunn is one of Ontarioâ&#x20AC;&#x2122;s leading insurance defence firms whose members have been providing quality legal support to the insurance community for over 30 years. We offer services in Ontario to property and casualty insurers throughout North America, at all levels of experience, at appropriate and competitive rates.

www.blouindunn.com

Claims Canada

August/September 2017

FirstOnSite Restoration has strengthened the senior management team in Ontario by promoting Dennis Van Luit to the newly created role of director of operations â&#x20AC;&#x201C; Ontario. Dennis joins the leadership team of Jason Prescott who is senior vice president. In this new role, Dennis is supporting the growth of the Ontario Region, ensuring performance related to .3,V DQG ZRUNĂ RZ ZRUNLQJ ZLWK %UDQFK 2SHUDWLRQV WR LPSURYH RYHUDOO HIĂ&#x20AC;FLHQFLHV DQG SURYLGLQJ VXSSRUW to the local branches. â&#x20AC;&#x153;Dennis bolsters the strong Dennis Van Luit existing team that continues to grow FirstOnSite in the Province of Ontario and ensures the company is delivering the highest standards of customer experience in our industry,â&#x20AC;? says Dave Demos &(2 RI )LUVW2Q6LWH 5HVWRUDWLRQ :LWK \HDUV RI LQGXVWU\ experience, Dennis began his career as an adjuster before moving to restoUDWLRQ +H UDQ WKH %URFNYLOOH RSHUDWLRQV IRU *HQHUDO 0DLQWHQDQFH &RQWUDFtors before it joined FirstOnSite in 2008, and continued to run the branch as LW LQWHJUDWHG LQWR WKH )LUVW2Q6LWH EUDQG ,Q 'HQQLV OHG WKH RSHQLQJ RI FirstOnSiteâ&#x20AC;&#x2122;s new Ottawa branch, and added its management to his role. O www.claimscanada.ca

APPOINTMENT

â&#x20AC;˘ on the scene OTS 30 Forensic Engineering has launched its newly redesigned website www.30fe.com. The revamped website offers visitors a seamless user experience with easy access to essential information which is now fully integrated with the Ă&#x20AC;UPÂˇV QHZ EUDQG LGHQWLW\ Â´:H DUH H[FLWHG DERXW WKH ODXQFK RI RXU ZHEVLWH 7KH new website now falls in line with our 30 FE brand, and helps to tell the story of 30 Forensic Engineering, our growth as a company, and our vision of being a centre of excellence in forensic engineering and science,â&#x20AC;? stated &KULV *LIĂ&#x20AC;Q, CEO of 30 Forensic Engineering. O Grace Klemke is the new regional sales manager for Western Canada with DAS Canada. Grace is a dedicated individual with more than 25 years of experience in the insurance industry. As a designated Chartered Insurance 3URIHVVLRQDO &,3 DQG &DQDGLDQ $FFUHGLWHG ,QVXUDQFH %URNHU &$,% VKH WKULYHV RQ FUHDWLQJ VROXWLRQV IRU SDUWQHUV and customers that align with their goals, values, and strategic objectives. Grace is passionate about people and has devoted her time to providing mentorship, coaching, and education to sales professionals and those who are new to GraDe Klemke the industry. She is proud to lead the regional sales team in Western Canada and has the pleasure of working with our top-notch broker consultants: Shari Sanders, Lynnette Cappis, and Crystal Lidgren. O

MKA Canada Inc KDV RSHQHG D :LQQLSHJ RIĂ&#x20AC;FH DQG appointed Etienne Nel as regional manager. Etienne has RYHU \HDUV RI FRQVWUXFWLRQ DQG SURMHFW PDQDJHPHQW experience gained on various projects in the contracting DQG FRQVXOWLQJ Ă&#x20AC;HOGV +LV H[SHUWLVH LV LQ FRVW DQG VFKHGule reporting, quality control and multiple subcontractor management. He has experience overseeing numerous projects spanning across South Africa, Canada, the United Kingdom and extending into other parts of Europe. ,Q (WLHQQH UHORFDWHG WR &DQDGD VWHSSLQJ LQWR WKH Etienne Nel role of construction project manager in Manitoba on a large-scale substation project. His experience included the management and EXLOGLQJ RI PDMRU FRQFUHWH ZRUN IRU IRXQGDWLRQV HTXLSPHQW SDGV Ă RRU VODEV DQG large containment pits. O DKI Canada introduces Tammy Nichol as the incoming director for Atlantic Canada. She will be based in Halifax, Nova Scotia. In her new role, Tammy will have overall responsibility for regional strategic planning, business development and account maintenance. She will report directly to the senior vice president of DKI Canada, Paul Burns. â&#x20AC;&#x153;We are very H[FLWHG WR KDYH 7DPP\ RQ RXU WHDPÂľ VDLG %XUQV Â´6KH brings a unique skill set that we believe will allow us to successfully execute on our strategic objectives Tammy Nichol in the region and also continue to support both our Atlantic membership and our clientsâ&#x20AC;&#x2122; business needs.â&#x20AC;? Tammy brings to DKI close to 20 years combined insurance, human resource development, account management and business development experience. In addition, she carries both her Chartered Insurance Professional (CIP) and Chartered Professional in Human Resources (CPHR) ) designations. She is currently pursuing her Canadian Risk Management (CRM) designation. Tammy has recently returned from Christchurch, New Zealand, where she has been working to assist in the earthquake recovery. O

Michael Connors The Insurance Council of British Columbia (â&#x20AC;&#x153;Councilâ&#x20AC;?) is pleased to announce the election of Michael Connors, CIP, CRM as its chairperson for 2017-2018. Mike Connors is an independent adjuster and a Partner in Payne, Travis & Associates. Previously, he was an independent adjuster and Partner at Can West Claims Vancouver, an independent adjuster with Meredith Allan & Robinson, and a road adjuster with Commercial Union Vancouver. Mr. Connors has been in the insurance industry since 1989 and was first appointed to Council in 2012. He has been a voting member since 2014. Active in his community, he is a member of Runners of Compassion, former VicePresident of the Insurance Softball League, a past coach with the Coquitlam Minor Soccer League, and a member of Nanaimo Ultimate Frisbee. He is an ambassador with Career Connections for the Insurance Institute of Canada. Council is a regulatory body established under the Financial Institutions Act, responsible for the licensing and professional conduct of 38,000 insurance agents, adjusters, and salespersons doing business in British Columbia. Its mandate is to uphold the public interest in dealings with insurance licensees by promoting ethical and competent behaviour. Council consists of 11 voting members with representation from the life and P&C insurance industries, adjusters, and non-industry persons.

continued on page 36...

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August/September

Claims Canada

â&#x20AC;˘ on the scene OTS

...continued from page 35

CIAA New Members â&#x20AC;&#x201D; July 2017 CORPORATE MEMBERSHIP

ESIS Canada Inc.

Toronto, ON

INDIVIDUAL MEMBERSHIP

Bannatyne & Company General Insurance Adjusters Ltd. Peter MacKinnon Hamilton, ON

Level 1

Coast Claims Service Ltd. Katie Fulton Victoria, BC

Level 1

Cunningham Lindsay Canada Tracy Adamson, CIP Richmond Hill, ON Level 2 Maria Codarin Hamilton, ON Level 2 Ben Ogunleye, CIP Richmond Hill, ON Level 3 ESIS Canada Inc. Morgan Bonner Jovan (John) Calkov Krystal Elhajj Fred Silvestri, BA, B.Ed, CIP Emily Tanandar

Toronto, ON Toronto, ON Montreal, QC Toronto, ON Toronto, ON

Level 1 Level 2 Level 1 Level 3 Level 1

Midwest Claims Services Nathan Rivard, CIP Saskatoon, SK

Level 3

Rocca Claims Jenna Levac

Level 1

Sudbury, ON

Kernaghan Adjusters has expanded its Nova Scotia team with the addition of Scott Lynds CIP, senior adjuster. Scott is a veteran large-loss property adjuster with over 30 years experience in the industry. His specialties include: complex commercial property, catastrophic bodily injury and commercial liability claims. â&#x20AC;&#x153;We are excited about the depth of expertise Scott brings to our team,â&#x20AC;? said Nova ScoScott Lynds tia regional manager, Phil Harris )&,3 %$ Scottâ&#x20AC;&#x2122;s adjusting knowledge spans a number of different loss types such as: marine liability, pharmaceutical malpractice, pollution and environmental liability, livestock, warehouseman liability and motor WUXFN FDUJR 6FRWW Ă&#x20AC;UVW MRLQHG .HUQDJKDQ $GMXVWHUV +DOLID[ EUDQFK LQ DQG ZRUNHG ZLWK WKH FRPSDQ\ IRU RYHU \HDUV 3UHVLGHQW and CEO, Patti Kernaghan FCIP, CRM, FIFAA stated: â&#x20AC;&#x153;I am very glad to welcome Scott back to KA. He is a great addition to our company and we value his loyalty and excellent work ethic.â&#x20AC;? O FIRST Insurance Funding of Canada (FIRST Canada) has acquired Insurance Premium Finance Company (IPFC). The two will offer payment solutions and service for brokers and clients in Western Canada. â&#x20AC;&#x153;We have been looking to expand our commitment and physical presence in Western Canada and as those in the industry know, good people are the hardest part of the puzzle. Thatâ&#x20AC;&#x2122;s why this opportunity to join teams with IPFC is a win-win for both our companies and our clients,â&#x20AC;? said Stuart Bruce, CEO of FIRST Canada. FIRST Canada is in the initial stages of the transition. There will be no impact to brokers and their clients. O

David Horner of Kernaghan Adjusters received his Chartered Loss Adjuster (CLA) accreditation from CIAA Western Region president, Jody Schmidt. Having met stringent experience and competency requirements, David, successfully completed a IXUWKHU KRXUV RI FRPSUHKHQVLYH FODLP VSHFLĂ&#x20AC;F HGXFDWLRQ LQFOXGLQJ WHFKQLFDO SURSerty courses, adjuster skill and knowledge courses as well as legal concept courses in contract law and tort law. He is now eligible to proudly display the CLA designation, UHĂ HFWLQJ WKH HVVHQWLDO VNLOOV UHTXLUHG IRU HIĂ&#x20AC;FLHQW DQG HIIHFWLYH ORVV DGMXVWPHQW O 36

Claims Canada

August/September 2017

www.claimscanada.ca

â&#x20AC;˘ on the scene OTS Cunningham Lindsey held a cocktail reception for more than 100 invited guesets on June 28 at Hyâ&#x20AC;&#x2122;s Steakhouse in Toronto, raising a toast to a late-breaking summer and highlighting the work of four of its specialty services divisions. O

www.claimscanada.ca

August/September

Claims Canada

â&#x20AC;˘ on the scene OTS The Ontario chapter of Women in Insurance Cancer Crusade (WICC) held a Canada 150-themed golf tournament on July 12 at the Angus Glen Golf Club in Markham, Ont. Thanks in large part to the ďŹ nancial support of numerous sponsors, the 18th-annual event raised $55,000 for the Canadian Cancer Society. O

Claims Canada

August/September 2017

www.claimscanada.ca

Crawford & Company (Canada) Inc. Makes Key Operational Appointments Crawford & Company (Canada) Inc., is pleased to announce the appointment of several key operational staff on a national level and within our Ontario operations. Joe Turcotte, an employee of Crawford for over 30 years has been appointed to the position of national general manager, Insurer Markets. In his new role Joe will serve as liaison between Crawford’s branch network, operations and sales, with the objective of growing our business through streamlining and simplifying operational processes and supporting branch functions. On a branch level, a number of seasoned, highly successful Crawford branch managers have taken on managerial roles within their newly expanded branch networks. The appointment of Mary Charman, Kelly Stevens and Mike McLeod as managers, Spencer Bailey as assistant manager, and Keith Marentette as managing professional for their respective branch hubs, will serve to enhance the operations of our branch network. Crawford has strategically grouped its Ontario branches into hubs based on geographic proximity and service reach. These newly established service hubs consist of North GTA, West GTA and West Ontario, all of which serve as the central location for surrounding branches. This initiative, coupled with the professional acumen, service excellence and devotion to quality that former branch managers Joe Turcotte, Mary Charman, Kelly Stevens, Mike McLeod and Keith Marentette have displayed throughout their careers at Crawford, serves to strengthen our operational excellence and service delivery to our clients.

Joe Turcotte

National General Manager, Insurer Markets As a claims professional for over 30 years at Crawford, Joe has held a number of progressive positions including multi-line claims adjuster, control adjuster, branch manager and national general manager, insurer markets. Throughout his professional career he has worked closely with many of Crawford’s insurer clients and has implemented effective service solutions. Joe is an active member of the Insurance Brokers Association of Hamilton and past president of the Ontario Insurance Adjusters Association (Hamilton chapter), and he holds his Chartered Insurance Professional designation from the Insurance Institute.

Mary Charman,

Manager, North GTA Branch Hub (Newmarket, Barrie, Orangeville, Huntsville and Owen Sound branch locations) Mary has been with Crawford for over 22 years and is heavily involved in the insurance community. She holds executive positions with both the Canadian Independent Adjusters Association and the Ontario.

Kelly Stevens,

Manager, West GTA Branch Hub (Mississauga, Hamilton and St. Catherines branch locations) Kelly commenced her insurance career in 1995 and has occupied numerous progressive roles with several insurers in the Ontario auto and property space. She has been with Crawford since 2007 and has been branch manager of the former Toronto West operation since 2015.

Spencer Bailey

Assistant Branch Manager, West GTA Branch Hub (Mississauga, Hamilton and St. Catharines branch locations) Spencer brings a vast knowledge of claims adjusting to this position, with more than two decades of experience working in all aspects of the claim administration process. Spencer is an industry recognized expert and has a reputation for handling complex losses in the areas of residential and commercial property, general liability and environmental, with a special focus on greenhouse claims. He holds his Chartered Insurance Professional (CIP) designation and is licensed in all lines. In his new role, Spencer will be responsible for the direct supervision of front line associates in the property and casualty lines of business.

Mike McLeod

Manager, West Ontario Branch Hub (Kitchener, Waterloo, Brantford, London and Windsor branch locations) Since joining Crawford in 1998, Mike has held positions as bilingual adjuster-trainee, all lines ﬁeld adjuster, branch supervisor and branch manager. Mike has gained a wealth of knowledge in both his ﬁeld and management roles. As branch manager, Toronto West,Mike was also instrumental in helping Crawford work through several large branch consolidations in the GTA. These experiences and his vast capabilities make Mike an ideal candidate for this role.

Keith Marentette

Managing Professional, West Ontario Branch Hub (Kitchener, Waterloo, Brantford, London and Windsor branch locations) Keith began his insurance career in Windsor, Ontario with Crawford, as an all lines adjuster in 1975. Throughout his professional career he has held branch manager positions within Kamloops, British Columbia and London, Ontario. Keith will be working with Mike McLeod to help manage this growing area.

www.crawfordandcompany.ca

The fire forced an entire city of 80,000 residents to evacuate for weeks and some for months and destroyed 2400 structures, including 1600 homes

423

CIAA Member adjusters:

Insurer Clients serviced by CIAA members:

Canadian Independent Adjustersâ&#x20AC;&#x2122; Association (CIAA) members were on the ground in challenging conditions helping the citizens of Fort McMurray recover and rebuild.

108

CIAA Members are proud to have played a critical role in assisting in the costliest insured natural disaster in Canadian history PCS Canada estimates total value of Commercial and Residential insured losses at

$3.8 billion

60%

$2.2 billion total value of Commercial and Residential insured losses handled by CIAA members

Infrastructure â&#x20AC;&#x201C; The one College; the one Hospital; all 41 schools; all municipality claims for Wood Buffalo; Restaurants; Churches; Retail stores Northern Lights Regional Health Centre

CIAA member Adjusters handling the hospital claim were among the first on the ground and went in on a military flight

CIAA members provide expertise in residential and commercial losses and were instrumental in adjusting losses to the infrastructure of Fort McMurray ciaa-adjusters.ca