Disability Insurance Information

Clawbacks Series Part 11 - Why Should Government Programs be a Monetary Windfall for Canada’s Disability Insurers?

This article, the eleventh in a series about insurance clawbacks, was written by Steven Muller, Vice President Litigation at Share Lawyers. Click here to read the rest of the series.

In late March 2020, pandemic relief CERB benefits were rolled out in Canada. Some disability insurers saw this as a green light to clawback long term disability benefits from disabled who received CERB despite Ottawa’s requirement to pay back CERB benefits. CERB benefits were a temporary measure. Should disability insurers benefit from public benefit schemes that are targeted for the disabled in our communities?

When I was a law student some 30 years ago, OJ Simpson was on trial, and the Socratic method of teaching was used by my law professors at the University of Detroit-Mercy. So, colleagues, lawyers, employers, HR specialists, federal, provincial and territorial government officials - here are some tough questions for a well-needed dialogue. Do employers and insurance brokers have liability for failing to protect employees from aggressive clawback provisions in group long-term disability policies being purchased? Is disability insurers’ clawbacks from public benefit schemes ultimately a failure of consumer protection? If we want a free market system for long-term disability benefits which I very much support, to what extent should we incorporate clawbacks of public benefit schemes in long-term disability policies? Should public benefit schemes be deducted dollar for dollar from disability benefits? To prevent double recovery should we apply methods that reduce benefits from other sources like a pro-rata formula? Who should have the responsibility to regulate clawback provisions in disability policies—the market, the government, or the insurance industry? If federal, provincial, or territorial governments’ refuse to protect their money from being clawed back, should the insurance industry self-regulate? What burden are we imposing on the disabled with the many clawbacks in disability policies? Now is the time for us in Canada to rethink our archaic approach to clawbacks in a long-term disability scenario.

Denied your long term disability claim?

Contact lawyers for long term disability at Share Lawyers today and put our experience to work for you. Our 35+ years of experience can help you win your case against Canada Life, Desjardins, Manulife, RBC Insurance, Sun Life, and other insurance companies. We offer free consultations and there are no fees unless you win your case. Watch our web show, Your Disability Lawyers, on YouTube, or listen to the podcast on Google Podcasts.

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