By Jason Frost
Ontario Regulation 383/24 (https://www.ontario.ca/laws/regulation/r24383) has amended the SABS for policies issued after June 30, 2026, making many of the previously standard SABS benefits only available for most persons injured in accidents in Ontario if they purchased optional benefits .
With the new SABS effective July 1, 2026, more Ontarians should have optional benefits included in their coverage, but will they?
As discussed in a prior blog (https://www.rogerspartners.com/sabs-amendments-likely-to-increase-auto-insurance-premiums-and-many-ontarians-will-not-have-access-to-significant-benefits-without-any-choice/), the amended SABS (with optional benefits replacing the currently mandatory benefits) will likely increase automobile insurance policy premiums in Ontario for several reasons.
One of these reasons discussed in this blog post is that, unless changes are made to Ontario’s priority dispute scheme to determine which insurer has responsibility to pay benefits to accident victims, priority disputes are about to get more prevalent, more complicated, and more expensive.
As more Ontarians purchase optional benefits, the problems with the current priority dispute scheme in properly dealing with optional benefits policies will be magnified. Insurers will spend more money fighting about responsibility to pay accident benefits and the plaintiff bar will likely see increased LawPro claims when their clients apply to the “wrong” insurer first.[1]
The Ontario Priority Dispute Scheme & the Optional Benefits Endorsement
Priority disputes in Ontario are governed by section 268 of the Insurance Act and Ontario Regulation 283/95. The intent behind the priority dispute scheme is for an insured person to be able to claim accident benefits from the insurer that they contracted with and to ensure that they have access to any of the optional benefits that they have purchased (“portable” coverage as described in FSCO Bulletin No. A-10/97, https://www.fsrao.ca/media/7211/download).
Policies with optional benefits are required by the SABS and s. 227 of the Insurance Act to have a special endorsement addressing priority rules. Currently, the approved endorsement is the archaic OPCF-47 endorsement, which can unfortunately prevent an insured from accessing optional benefits that they have purchased if they submit their claim to the “wrong” insurer first. The OPCF 47 contains the following poorly drafted provisions:
1. Purpose of this Endorsement
This endorsement is part of your policy. It has been made because persons who are entitled to receive optional statutory accident benefits under this policy may, by the priority of payment rules in Section 268 of the Insurance Act, be required to claim under another policy that does not provide them with the optional statutory accident benefits that have been purchased under this policy.
This endorsement allows these persons to claim Statutory Accident Benefits (SABS) under this policy including the optional statutory accident benefits provided by this policy, provided they do not make a claim for SABS under another policy.
2. What We Agree To
If optional statutory accident benefits are purchased and are applicable to a person under this policy, and the person claims SABS under this policy as a result of an accident and agrees not to make a claim for SABS under another policy, we agree that we will not deny the claim, for both mandatory and optional statutory accident benefits coverage purchased, on the basis that the priority of payment rules in Section 268 of the Insurance Act may require that the person claim SABS under another insurance policy.
Despite the clear intention that insurers which sold optional accident benefits should pay the benefits, the bolded sections above have resulted in many inequitable priority arbitration decisions in circumstances where the insured person applied to the “wrong” (non-optional benefits) insurer first. In those decisions, arbitrators have found that priority of payment of the claim cannot be transferred to the optional benefits insurer (so the optional benefits are inaccessible) because the insured failed to apply to the optional benefits insurer first, as required under the contract.
Unless an arbitrator can be convinced that the insured is entitled to relief from forfeiture on an equitable basis and can re-apply to the optional benefits insurer (per the reasoning in Continental Casualty Company v. Chubb Insurance Company of Canada, 2022 ONCA 188 (CanLII), https://canlii.ca/t/jmxww, affirming Arbitrator Bialkowski’s underlying decision dated April 4, 2018), an insured claimant who applied to the wrong insurer will not have access to the optional benefits that they purchased.
Caselaw – Priority Disputes & Optional Benefits
Unfortunately, no adjudicative body has definitively claimed jurisdiction to order an insurer which sold optional benefits to pay those benefits, in cases where the insured applied to their non-optional benefits insurer and relief from forfeiture is required to re-apply to the optional benefits insurer.
Private arbitrators have been reluctant to grant equitable relief under s. 31 of the Arbitration Act, 1991, the Courts have held that they do not have jurisdiction to provide for relief from forfeiture under s. 129 of the Insurance Act (despite that relief being only available to the “court”), and the LAT has recently held that it as well cannot grant relief from forfeiture (it may be helpful to insert a popular Spiderman meme in your mind as you read this paragraph).
For further background on the related caselaw, see among others:
- Echelon v. Co-Operators, Arbitrator Samis, January 20, 2015; Jevco v. Chieftain, Arbitrator Samworth, March 11, 2016; Echelon v. Co-Operators, Arbitrator Samis, March 2, 2018; and Echelon v. Gore, Arbitrator Samworth, August 23, 2023 (no relief from forfeiture when the “wrong” insurer is applied to first).
- Co-Operators v. Certas, Arbitrator Cooper, April 2019 (the insured applied to the optional benefits insurer, first).
- Yaromich and Botbyl v. Heartland, 2021 ONSC 3759 (CanLII), https://canlii.ca/t/jg2xb (the courts do not have jurisdiction to grant relief from forfeiture for an accident benefits claim – “If I am incorrect and legislative amendment is required, the provincial government should enact the required legislative enactment as soon as possible to prevent this unfortunate situation befalling other innocent people”, para. 51).
- Botbyl v Heartland Farm Mutual Inc., 2024 CanLII 28838 (ON LAT), https://canlii.ca/t/k3wr9, and Yaromich v Heartland Farm Mutual Inc., 2024 CanLII 28835 (ON LAT), https://canlii.ca/t/k3wr8 (yes, the very same claimants as the above Superior Court decision, where the LAT held on Reconsideration that they do not have jurisdiction to grant relief from forfeiture).
- Northbridge General Insurance Corp. v. Jevco Insurance Co., 2024 ONSC 1520 (CanLII), https://canlii.ca/t/k3gpw, where an appeal is being pursued to the Divisional Court (multiplicity of proceedings with inconsistent results).
As you can see, a futile game of three-card monte has seemingly been created by the current caselaw which has the effect of depriving the insured from collecting the optional benefits they purchased. Most arbitrators hold that they cannot provide equitable relief. Both the LAT and the Courts have held that they do not have jurisdiction to provide relief from forfeiture.
Solution to Priority Disputes Involving Optional Benefits Policies
The only current potential solution for an insured person who has inadvertently applied to the “wrong” insurer is in the context of a dispute between insurers under O. Reg. 283/95. In that context, if a private arbitrator is willing to grant equitable relief under s. 31 of the Arbitration Act, 1991, does that mean that insurers are required to bring an Application in the Courts to enforce an equitable arbitral decision that an insured has access to their optional benefits? Are the Courts resourced to handle hundreds of such applications each year? Will the Regulator approve premium increases based on the increased legal costs associated with these applications?
What about those insureds who do not have the benefit of an insurer-initiated priority dispute? When they realize they made the wrong choice, are they simply out of luck and without recourse to any forum to protect their consumer “choice” to purchase optional benefits coverage from their insurer? There currently is no means for an insured person to access their optional benefits coverage when they or their agent (which often can mean the accounts receivable clerk at the treating clinic with zero legal knowledge or proper errors & omissions coverage) inadvertently applies to the wrong insurer.
The best solution would be for the Legislature to amend the Insurance Act and O. Reg. 283/95 to allow an insured to be able to apply (or for insurers in a priority dispute to be able to transfer the claim) to the insurer which sold the optional benefits, even if the insured person incorrectly applied to wrong insurer first. This solution will also require revisions to the optional benefits endorsement to replace the archaic language and inoperable provisions of the OPCF-47.
Key Takeaways
The amendments to the SABS and the anticipated increase in optional benefits purchases demands a revised OPCF-47 and amendments to the legislative scheme. This is necessary to provide a trier of fact (either a private arbitrator in the context of a priority dispute initiated by an insurer or a LAT adjudicator in the context of a LAT Application seeking access to optional benefits initiated by an insured) with jurisdiction to order benefits to be paid by the insurer which collected the additional premium for the optional benefits coverage sold to the insured person. That jurisdiction should encourage insurers to promptly agree to a priority transfer to the insurer with optional benefits (or to permit the insured person to re-elect to claim their optional benefits) without need of litigation.
Without the proposed legislative changes, there is still a viable argument that under s. 31 of the Arbitration Act, 1991, a priority arbitrator can, on an equitable basis, provide relief from forfeiture, but historically that argument has not had much success.
If changes are not made, the plaintiff bar should review their LawPro and excess E&O coverage to anticipate increased claims due to their client applying to the wrong insurer first during the course of their retainer (the difference can be in the range of $4,000,000 after July 1, 2026, depending upon the age, vocation and injuries of their client). Last, clinics and other third parties should avoid assisting with OCF-1 completion or the selection of which insurer the OCF-1 is submitted to, to avoid the risk of E&O litigation for which they may not be properly insured.
[1] A common example will be when a client advises that they are not “married”, but they actually have a separated spouse who is still an Insurance Act “spouse” with a policy including optional benefits. There will also be claims where both a personal policy and an employer’s policy are available to an insured (or where two spouses who live together have separate policies for the household vehicles), but only one has optional benefits coverage. These common scenarios may not be apparent during an initial intake before an OCF-1 is submitted (often by an intake paralegal with a plaintiff firm, or, in many cases by an employee of the treating clinic).
By Jason Frost
Ontario Regulation 383/24 (https://www.ontario.ca/laws/regulation/r24383) has amended the SABS for policies issued after June 30, 2026, making many of the previously standard SABS benefits only available for most persons injured in accidents in Ontario if they purchased optional benefits .
With the new SABS effective July 1, 2026, more Ontarians should have optional benefits included in their coverage, but will they?
As discussed in a prior blog (https://www.rogerspartners.com/sabs-amendments-likely-to-increase-auto-insurance-premiums-and-many-ontarians-will-not-have-access-to-significant-benefits-without-any-choice/), the amended SABS (with optional benefits replacing the currently mandatory benefits) will likely increase automobile insurance policy premiums in Ontario for several reasons.
One of these reasons discussed in this blog post is that, unless changes are made to Ontario’s priority dispute scheme to determine which insurer has responsibility to pay benefits to accident victims, priority disputes are about to get more prevalent, more complicated, and more expensive.
As more Ontarians purchase optional benefits, the problems with the current priority dispute scheme in properly dealing with optional benefits policies will be magnified. Insurers will spend more money fighting about responsibility to pay accident benefits and the plaintiff bar will likely see increased LawPro claims when their clients apply to the “wrong” insurer first.[1]
The Ontario Priority Dispute Scheme & the Optional Benefits Endorsement
Priority disputes in Ontario are governed by section 268 of the Insurance Act and Ontario Regulation 283/95. The intent behind the priority dispute scheme is for an insured person to be able to claim accident benefits from the insurer that they contracted with and to ensure that they have access to any of the optional benefits that they have purchased (“portable” coverage as described in FSCO Bulletin No. A-10/97, https://www.fsrao.ca/media/7211/download).
Policies with optional benefits are required by the SABS and s. 227 of the Insurance Act to have a special endorsement addressing priority rules. Currently, the approved endorsement is the archaic OPCF-47 endorsement, which can unfortunately prevent an insured from accessing optional benefits that they have purchased if they submit their claim to the “wrong” insurer first. The OPCF 47 contains the following poorly drafted provisions:
Despite the clear intention that insurers which sold optional accident benefits should pay the benefits, the bolded sections above have resulted in many inequitable priority arbitration decisions in circumstances where the insured person applied to the “wrong” (non-optional benefits) insurer first. In those decisions, arbitrators have found that priority of payment of the claim cannot be transferred to the optional benefits insurer (so the optional benefits are inaccessible) because the insured failed to apply to the optional benefits insurer first, as required under the contract.
Unless an arbitrator can be convinced that the insured is entitled to relief from forfeiture on an equitable basis and can re-apply to the optional benefits insurer (per the reasoning in Continental Casualty Company v. Chubb Insurance Company of Canada, 2022 ONCA 188 (CanLII), https://canlii.ca/t/jmxww, affirming Arbitrator Bialkowski’s underlying decision dated April 4, 2018), an insured claimant who applied to the wrong insurer will not have access to the optional benefits that they purchased.
Caselaw – Priority Disputes & Optional Benefits
Unfortunately, no adjudicative body has definitively claimed jurisdiction to order an insurer which sold optional benefits to pay those benefits, in cases where the insured applied to their non-optional benefits insurer and relief from forfeiture is required to re-apply to the optional benefits insurer.
Private arbitrators have been reluctant to grant equitable relief under s. 31 of the Arbitration Act, 1991, the Courts have held that they do not have jurisdiction to provide for relief from forfeiture under s. 129 of the Insurance Act (despite that relief being only available to the “court”), and the LAT has recently held that it as well cannot grant relief from forfeiture (it may be helpful to insert a popular Spiderman meme in your mind as you read this paragraph).
For further background on the related caselaw, see among others:
As you can see, a futile game of three-card monte has seemingly been created by the current caselaw which has the effect of depriving the insured from collecting the optional benefits they purchased. Most arbitrators hold that they cannot provide equitable relief. Both the LAT and the Courts have held that they do not have jurisdiction to provide relief from forfeiture.
Solution to Priority Disputes Involving Optional Benefits Policies
The only current potential solution for an insured person who has inadvertently applied to the “wrong” insurer is in the context of a dispute between insurers under O. Reg. 283/95. In that context, if a private arbitrator is willing to grant equitable relief under s. 31 of the Arbitration Act, 1991, does that mean that insurers are required to bring an Application in the Courts to enforce an equitable arbitral decision that an insured has access to their optional benefits? Are the Courts resourced to handle hundreds of such applications each year? Will the Regulator approve premium increases based on the increased legal costs associated with these applications?
What about those insureds who do not have the benefit of an insurer-initiated priority dispute? When they realize they made the wrong choice, are they simply out of luck and without recourse to any forum to protect their consumer “choice” to purchase optional benefits coverage from their insurer? There currently is no means for an insured person to access their optional benefits coverage when they or their agent (which often can mean the accounts receivable clerk at the treating clinic with zero legal knowledge or proper errors & omissions coverage) inadvertently applies to the wrong insurer.
The best solution would be for the Legislature to amend the Insurance Act and O. Reg. 283/95 to allow an insured to be able to apply (or for insurers in a priority dispute to be able to transfer the claim) to the insurer which sold the optional benefits, even if the insured person incorrectly applied to wrong insurer first. This solution will also require revisions to the optional benefits endorsement to replace the archaic language and inoperable provisions of the OPCF-47.
Key Takeaways
The amendments to the SABS and the anticipated increase in optional benefits purchases demands a revised OPCF-47 and amendments to the legislative scheme. This is necessary to provide a trier of fact (either a private arbitrator in the context of a priority dispute initiated by an insurer or a LAT adjudicator in the context of a LAT Application seeking access to optional benefits initiated by an insured) with jurisdiction to order benefits to be paid by the insurer which collected the additional premium for the optional benefits coverage sold to the insured person. That jurisdiction should encourage insurers to promptly agree to a priority transfer to the insurer with optional benefits (or to permit the insured person to re-elect to claim their optional benefits) without need of litigation.
Without the proposed legislative changes, there is still a viable argument that under s. 31 of the Arbitration Act, 1991, a priority arbitrator can, on an equitable basis, provide relief from forfeiture, but historically that argument has not had much success.
If changes are not made, the plaintiff bar should review their LawPro and excess E&O coverage to anticipate increased claims due to their client applying to the wrong insurer first during the course of their retainer (the difference can be in the range of $4,000,000 after July 1, 2026, depending upon the age, vocation and injuries of their client). Last, clinics and other third parties should avoid assisting with OCF-1 completion or the selection of which insurer the OCF-1 is submitted to, to avoid the risk of E&O litigation for which they may not be properly insured.
[1] A common example will be when a client advises that they are not “married”, but they actually have a separated spouse who is still an Insurance Act “spouse” with a policy including optional benefits. There will also be claims where both a personal policy and an employer’s policy are available to an insured (or where two spouses who live together have separate policies for the household vehicles), but only one has optional benefits coverage. These common scenarios may not be apparent during an initial intake before an OCF-1 is submitted (often by an intake paralegal with a plaintiff firm, or, in many cases by an employee of the treating clinic).