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Summary

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Insurance - Liability insurance - Motor vehicle liability policy - Rented vehicle - Statutory Accident Benefits - “Pay first, dispute later” rule - Nexus between claimant and insurer - Insurance Act, R.S.O. 1990, s. 268 - Disputes Between Insurers, O. Reg. 283/95, Claimant declined optional motor vehicle liability policy when renting vehicle - Claimant injured in single-vehicle accident involving rental vehicle - Claimant applied to motor vehicle liability insurer for Statutory Accident Benefits - Insurer refused to provide benefits - Whether Chubb is an “insurer” for the purposes of s. 268 of the Insurance Act and Ontario Regulation 283/95 - Disputes Between Insurers - Whether, where there is a nexus between an insurer and a motor vehicle that gives rise to an accident benefits claim, an insurer can ignore the obligations imposed by the disputes between insurers regulation by unilaterally determining it is not an insurer for that purpose.

On September 23, 2006, Ms. Singh was injured in a single-vehicle accident while driving a vehicle rented from Wheels 4 Rent. Despite having declined the opportunity to purchase an optional death and dismemberment policy offered by Chubb Insurance Company of Canada, she submitted an application for Statutory Accident Benefits to Chubb. It declined benefits on the basis that the optional policy was not a motor vehicle policy, and it had been declined. Chubb argued that the Statutory Accident Benefits scheme did not apply because it was not an “insurer” under the Insurance Act, R.S.O. 1990, c. I.8. Eventually, she received benefits from Zurich Insurance Company, which insured Wheels 4 Rent’s rental vehicles pursuant to a “motor vehicle liability policy”. Zurich administered the claim on a “without prejudice” basis, arguing that Chubb was the first insurer and should have paid first.

The Arbitrator chosen by Zurich and Chubb determined, based on agreed facts, that Chubb was not an insurer for the purposes of the Act and the Regulation because it had not issued a “motor vehicle liability policy” to Wheels 4 Rent or Ms. Singh. Under the arbitration agreement, that meant that Chubb was not obligated to pay her benefits under the “pay first, dispute later” rules.

Lower Court Rulings