An insurer's attempt to claw back $26,617 in accident benefits collapsed after a tribunal ruled the payments stemmed from no error at all.
The Ontario Licence Appeal Tribunal dismissed Aviva Insurance Company of Canada's claim to recover income replacement benefits (IRBs) it had paid to an insured following a September 6, 2023 automobile accident.
The dispute turned on a benefit-election mix-up. On September 13, 2023, the insured filed an application for accident benefits stating he was retired, and elected a non-earner benefit (NEB). Weeks later, he sent the insurer an employer's confirmation form and paystubs confirming his employment up to the date of the accident. On December 28, 2023, he submitted revised forms stating he had worked as a kitchen helper and electing an IRB instead.
The insurer accepted the revised documentation. By January 31, 2024, Aviva advised the insured he may be eligible for an IRB, set the benefit at $400.00 per week, and paid back amounts owing plus interest, with biweekly payments continuing.
Then, by correspondence dated January 17, 2025, Aviva reversed course. It demanded repayment of $26,617.14 under section 52 of the Statutory Accident Benefits Schedule, arguing that under section 35(3) the insured's original NEB election was final regardless of any change in circumstances and could not be changed.
The insured countered that he had simply elected the wrong benefit by mistake and corrected it, and that section 35(3) never applied because the insurer had not requested an election before he filed his initial form.
The adjudicator sided with the insured. She found the original forms had been completed in error, not because of any change in circumstances, and that section 35(3) does not address situations where an insured mistakenly elects the wrong benefit. "an insured is not held to a standard of perfection," she wrote.
The Schedule, she noted, is consumer protection legislation to be construed liberally in favour of the insured, citing Supreme Court and Court of Appeal authority. She also relied on Jones v. The Co-Operators, holding that it is for the insurer to review an application and determine whether an IRB or NEB applies. Once Aviva determined - through its own section 44 assessments - that the insured qualified for an IRB, no election was required, and the earlier error was cured.
Because section 52(1)(a) allows repayment only where a benefit is paid as a result of an error, and the tribunal found no error, no repayment was owing. Aviva had not proved on a balance of probabilities that it was entitled to recover the money.
The application was dismissed on June 22, 2026. The adjudicator added that relying on a procedural error to seek repayment of IRBs runs contrary to the intent of the Schedule.
