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Clearing away the doubts (disability)

Ms. F. called OLHI on behalf of a member of her family, Mr. L., to seek assistance with reinstatement of disability benefits that had been discontinued under his group policy. Mr. L. could not act for himself due to his state of disability. The OLHI Dispute Resolution Officer (DRO) learned that short-term disability benefits had been paid for a period of six months. Long term disability benefits were paid, on a trial basis, for a year and were then discontinued following an independent medical examination conducted on behalf of the insurer.

In sum, based on the medical examination, the insurer suspected that the insured was feigning his disability. The insurer also queried whether Mr. L. met the condition of “total disability” as per his insurance contract. Ms. F. called OLHI seeking assistance with the reinstatement of benefits. The complaint was initially reviewed by a DRO and was then referred to an OmbudService Officer (OSO) for a more detailed examination.

As is usual, Mr. L.’s group disability plan provided benefits for a period of 24 months if a claimant can demonstrate disability from his or her own pre-disability occupation. In order to qualify for benefits after that period, the claimant must provide evidence to support his or her inability to perform any occupation for which he is reasonably suited by education, training or experience.

OLHI’s OSO reviewed the extracted documents from the claims file previously provided to Ms. F. by the insurer. He then spoke at length with her to ascertain the chronology of events and the extent of her involvement to date. Taking into account the information already available, he determined that this case would best be served by a review of the insurer’s claim file. The insurer readily agreed and cooperatively provided the complete claim file.

A review of the insurer’s claim file and the additional information provided by the insured’s representative disclosed that Mr. L. had subsequently left his minimum wage-type work in the hospitality industry in order to be closer to his family. The file also revealed a history of progressively worsening mental health, culminating in Mr. L.’s hospitalization by the time of the OSO’s review.

The OSO appreciated the reasons for the insurer’s concerns about proof of disability, which were based on anecdotal evidence that suggested Mr. L. was physically active and had made some efforts to find a job. However, our Officer’s review of the claim history led him to conclude that the insured was indeed suffering from a serious deteriorating mental disability. This disability had not been clearly diagnosed at the time of the insurer’s decision to terminate benefits but had been conclusively diagnosed by the time OLHI’s Officer was reviewing the case.

Upon conclusion of his review, the OSO made a detailed written submission to the insurer. He acknowledged the insurer’s concerns and the fact that this was a challenging and complex claim. However, his view was that the evidence did not support a conclusion of feigning on the part of the insured. He suggested that the totality of the subsequent circumstances, which indicated a progressive deterioration in mental health, also be taken into account.

Upon receipt of our Officer’s analysis, the insurer referred the case back to its business unit for further consideration. In due course, the insurance company offered Mr. L. a lump sum settlement or reinstatement of the claim back to a point in time where the insurer accepted that Mr. L. was unquestionably totally disabled from any occupation. This offer was considered fair by OLHI’s OSO and the reinstatement of claim option was eventually accepted.


Disclaimer: Names, places and facts have been modified in order to protect the privacy of the parties involved. This case study is for illustration purposes only. Each complaint OLHI reviews contains different facts and contract wording may vary. As a result, the application of the principles expressed here may lead to different results in different cases.