Future LTD Benefits Not Deducted in ICBC UMP Claim Due to Payment Suspension Clause
In my ongoing efforts to summarize UMP Arbitration decisions, a stack of historic UMP cases have recently been provided to me by colleagues in the Plaintiff bar which I will post as time permits. To this end, below is a summary of a useful 1999 decision addressing the deductibility of future Long Term Disability Benefits in an UMP Claim.
In the 1999 decision (M. v. ICBC) the Claimant was severely injured in a 1993 collision. The Claimant and ICBC came to a mediated settlement valuing the claim at $1.2 million. The Defendant was under-insured and an arbitration was held to determine what amounts were deductible from the Claimant’s UMP coverage.
The Claimant had a private policy of insurance with Canada Life. They had paid over $70,000 in LTD benefits. It was agreed that these were deductible. ICBC argued that these payments would continue and the present value of future payments had to be deducted from the settlement amount.
Arbitrator Yule disagreed due to a ‘payment suspension‘ clause in the LTD contract. In not deducting future LTD payments from Canada Life Arbitrator Yule provided the following reasons:
79. …The critical provision regarding what is payable in the subrogation provision is the term that says “if a lump sum payment is made under judgment or settlement for loss of future income or for future period or lump sum benefits which would otherwise be payable under this policy, no further benefits will be paid under this policy until such time as the monthly or periodic benefits which would otherwise be payable under this policy equal the amount received in the lump sum”…
81. …One looks to the ICBC Regulations and, in this case, the definition of deductible amount. One item to be deducted is an amount “payable to the insured under any benefit”. One then looks to the Canada Life Policy to see whether the future disability benefits will be payable in the sense that they are going to be paid. In this case, the result of the payment of the UMP Claim is that the future Canada Life benefits will not be paid because of the integration provisions of the Policy. In my view, then, the future Canada Life benefits are not payable and do not constitute a deductible amount.
Like many UMP Cases, This decision is not publicly available but, as always, I’m happy to provide a copy to anyone who contacts me and requests one.