PAU Strips Ontario Insurer of Defense for Payment of BC No Fault Benefits
As previously discussed, BC’s Financial Institutions Act requires out of Province vehicle insurers to sign a “Power of Attorney Undertaking” in essence promising to provide the minimum insurance coverage available in BC when their insured vehicles are travelling in this Province and further not to raise any defences which are not available to BC insurers. As many North American jurisdictions have insurance limits well below those required in BC this often creates excess exposure for foreign insurers. Reasons for judgement were released recently by the BC Supreme Court, New Westminster Registry, stripping a PAU signatory of a defence they otherwise would be entitled to.
In the recent case (McCord v. Insurance Corporation of British Columbia) the Plaintiff was injured as a pedestrian in a BC collision. He was insured for no-fault benefits both with ICBC and a private insurer from Ontario. He received benefits from ICBC and subsequently sought coverage with the Ontario provider. The Ontario insurer denied payment relying on an Ontario regulation which limited payments “if the person receives benefits under the law of the jurisdiction in which the accident occurred“.
The Plaintiff sued arguing the Ontario insurer could not rely on this section as they signed the PAU. Mr. Justice Saunders agreed and provided the following reasons:
 Western Assurance says that there has been no violation on its part of the PAU; it has not set up a defence as to coverage, but has simply taken a position as to the amount of coverage available….
 The PAU sets out two provisions. One is an undertaking not to raise defences. The other is an undertaking to pay limits as set out in (a) and (b) of the PAU. A “position” taken by a foreign insurer that only the minimum amount is payable, and not the full amounts otherwise payable under the foreign insurer’s policy, is, in every sense of the word, a defence. The position being taken here by Western Assurance is one of the types of conduct which the PAU is designed to prevent…
 In my view, the raising of the provisions of the Regulation by Western Assurance is a defence within the meaning of the PAU, and reliance on those provisions as a defence would constitute a breach of the undertaking under the PAU.
 The application is therefore allowed, and s. 57(1.1) of the Regulation will have no application to Mr. McCord’s claim for benefits.