Limitation Period Trumps Invalid Election

The recent FSCO decision on a preliminary issue in Kanagalingam v. Economical Mutual Insurance Company1 confirms that insurers can rely on the statutory two-year limitation period when a weekly benefit is properly denied, even if the underlying election of benefits is found to be invalid. In her decision, Arbitrator Morris found that even though the claimant's election of a caregiver benefit ("CGB") was an "invalid election", the subsequent claim for an income replacement benefit ("IRB") was time-barred when the claimant sought the new benefit after three years. The initial clear and unequivocal denial of the IRB following the claimant's application for benefits and election of a CGB started the clock on the two-year limitation period.

Following a motor vehicle accident on June 23, 2008, the claimant sought accident benefits from her insurer. The insurer advised her by letter that she may be eligible for either an IRB or a CGB, but that only one benefit could be paid at any one time. The only information given to the claimant regarding the duration of an IRB was that it would have been limited to 12 to 16 weeks if her injuries fell within the Grade I Whiplash Guideline/Grade II Whiplash Guideline. The claimant selected a CGB on her OCF-10 Election of Income Replacement, Non-Earner, or Caregiver benefits form.

The resulting OCF-9 Explanation of Benefits forms from the insurer set out that she was not eligible to receive an IRB as she had elected to receive a CGB (on July 23, 2008). The OCF-9 also set out the dispute...