Alberta Court of Appeal: Entitlement to Section B benefits requires compliance with IME protocol

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Can an insurer deny all Section B benefits if an insured agrees to attend an IME on conditions that conflict with the protocol of the examining medical practitioner? The Alberta Court of Queen’s Bench had occasion to consider this in Greenidge v Allstate Insurance Company, 2018 ABQB 266 [Greenidge], and answered this question in the affirmative. More recently, the Court of Appeal in Greenidge v Allstate Insurance Company, 2019 ABCA 52, heard the appeal of that issue and also answered the issue in the affirmative. An insured who conditions their compliance with the Section B policy on conditions that do not accord with an election made by the insurer can disentitle that insured from further benefits.

In Greenidge, the insured, Ms. Greenidge, suffered soft tissue, whiplash and TMJ injuries from a motor vehicle accident. Allstate Insurance Company (“Allstate”) began to make payments to the insured, pursuant to Section B of the insured’s SPF No. 1 policy (the “Policy”), for her whiplash and TMJ injuries. Allstate arranged an IME for her injuries unrelated to the TMJ injury. The insured refused to attend the IME unless it was video recorded, which conflicted with the examining medical practitioner’s protocol; as a result, Allstate discontinued all benefits.  

Trial decision

The parties proceeded with a trial of two issues:

  1. Did Allstate breach the terms of the Policy when it discontinued coverage for further benefits under the Policy after:
    1. Ms. Greenidge declined to attend the Medical Examination under the Policy that was not video-recorded; and
    1. Allstate declined to accommodate video recording of the Medical Examination?
  2. If Allstate did not breach the Policy, was Allstate entitled under the Policy to deny Ms. Greenidge further coverage for TMJ treatment?

The insured took the position that, by denying a video recorded Medical Examination which would have promoted a fair and transparent process, Allstate breached its duty of utmost good faith. Further, as the Medical Examination did not relate to the TMJ injuries, Allstate had no right to deny coverage for the TMJ injuries.

After reviewing the duty of utmost good faith, principles concerning the interpretation of insurance policies, and the language of Section B, the trial judge concluded that the insurer was not in breach of the Policy by refusing to accommodate the video recording.

The trial judge recognized that Special Provision 4 of Section B is unambiguous. In light of the insurer’s right to name the medical practitioner who will conduct a medical exam, there was nothing unfair about selecting a medical practitioner whose protocol did not permit video recordings. Section B did not restrict the medical practitioner in the manner of conducting their examination.

Furthermore, given that the medical examination was sought in the context of a Section B claim and not through the Rules of Court, rule 5.42(1)(b) – which permits videotaping medical examinations – had no application to the insured’s circumstance.

The Court also found that Special Provision 6(b) of Section B forms the basis for disentitling the insured from any Section B benefits, which reads:

No person shall bring an action to recover the amount of a claim under this section unless the requirements of provisions (3) and (4) are complied with, nor until the amount of the loss has been ascertained as provided in this section.

The Court found accordingly:

[43] [The insured] has in effect brought an action to recover “the amount of a claim”. Such claim is in relation to both the Whiplash injuries and the TMJ injuries… she does so having not complied with Special Provision 4.

The absence of any reference to “subclaims” or “separate claims” in Special Provision 6(b) meant that the insured “was no longer entitled to commence an action against Allstate to recover an amount in relation to any injuries which she alleged she suffered as a result of the motor accident”.

Court of Appeal

The insured appealed the first issue only to the Court of Appeal, arguing that the trial judge erred for several reasons:

  1. By not giving effect to the ordinary meaning of the provisions (i.e. to “afford to a duly qualified medical practitioner named by the Insurer an opportunity”), which the insured argued she satisfied in providing “a set of circumstances” that made it possible for the examination to occur.
  2. Because the provision as to Medical Reports is silent as to the manner of the exam, the trial judge erred in reading in a requirement that the insured attend the examination on the terms dictated by the practitioner.
  3. By interpreting the provision in a manner unfair to the insured and failing to find the respondent breached its duty of utmost good faith for insisting on compliance with the terms precluding video-recording.

The Court dismissed the appeal and found that Special Provision 4, which is clear and unambiguous, describes the rights of the insurer to select a practitioner – which an insured does not have the right to decline or modify. The insurer’s selected practitioner must be permitted to conduct the examination according to their protocol; otherwise, the right to select may be nullified. Neither fairness, nor the duty of utmost good faith, are engaged when an insurer relies on compliance with a term of the Policy.

Takeaway

Greenidge subsumes, within the terms of Special Provision 4 and the insurer’s right of election, the protocol of a practitioner selected to prepare a Medical Report. In conjunction with Special Provision 6(b), a failure to comply with that protocol – or any other terms of the Section B policy – may disentitle a Section B claimant from any further benefits.

While Greenidge is specific to Section B claims, the broader takeaway is equally instructive: relying on the clear terms of a policy does not necessarily impugn the duty of utmost good faith. That duty cannot be relied upon to displace or revise the unambiguous terms of a policy.