Finding: Insurance policy is binding consent to independent medical exam under PIPEDA

The Privacy Commissioner of Canada has published a few more findings on her website, including one in which I acted for the respondent.

In case summary #320, the complainants challenged an insurer's right to request an independent medical examination for individuals seeking benefits under Section "B" of the insurance policy. (Interestingly, the insureds were seeking benefits beyond the four-year limit set out in the policy, which the insurer has no obligation to pay.) The complainants wanted to only be exmined by their own physicians, so they refused to submit to an examination by a licensed physician hired by the insurer. It was, they argued, a violation of privacy.

The case hinged on the language contained in the policy of insurance, which is standard for all auto insurers in the province and is approved by the province's Superintendant of Insurance. The policy reads, in part:

Section B – Accident Benefits

The Insurer agrees to pay to or with respect to each insured person as defined in this section who sustains bodily injury or death by an accident arising out of the use of operation of an automobile:

Subsection 1 – Medical, Rehabilitation and Funeral Expenses

(1) All reasonable expenses incurred within four years from the date of the accident as a result of such injury for necessary medical, surgical, dental, chiropractic, hospital, professional nursing and ambulance service and for any other service within the meaning of entitled services in the Hospital Services Act or the Medical Services Payment Act and for such other services and supplies which are, in the opinion of the physician of the insured’s person’s choice and that of the Insurer’s medical advisor, essential for the treatment, occupational retraining or rehabilitation of said person, to the limit of $50,000 per person.

The insurance policy also contains a provision saying that the insured has the right to examine the insured person when and as often as it reasonably requires while the claim is pending. The insurer argued that the individual agreed, by being a party to the policy of insurance, to submit to an IME to support a claim for benefits and submitting to an IME is a condition of receiving benefits.

The commissioner determined that the complaint was not well-founded:

Application: subsection 5(3) [of PIPEDA] states that an organization may collect, use or disclose personal information only for purposes that a reasonable person would consider are appropriate in the circumstances; Principle 4.2 requires that the purposes for which personal information is collected be identified by the organization at or before the time the information is collected; and Principle 4.3 stipulates that the knowledge and consent of the individual are required for the collection, use, or disclosure of personal information except where inappropriate.

In making her determinations, the Assistant Privacy Commissioner deliberated as follows:

• In keeping with the requirements of Principle 4.2, the automobile insurance policy in question clearly specifies that the insurer has the right to request a medical examination by a physician of the insurer’s choice for the purpose of investigating and processing the insured person’s claim. The policy also states that both the physician of the insured person’s choice and the insurer’s medical advisor must concur with the expenses being claimed.
• In the Assistant Commissioner’s opinion, a reasonable person would likely consider it appropriate for an insurance company to request a medical examination in order to ensure the validity of a claim, and to collect information from the examination and use it to assess the claim. Such a purpose would therefore meet the expectations of subsection 5(3). As all automobile insurance policy language is standard in the province, all insurance companies have this requirement.
• By being a party to the motor vehicle insurance policy and by submitting a claim under the policy, each of the complainants consented to the terms of the policy, one of which is that the insurer has the right to “examine the person of the insured person.” She therefore found that the insurance company did not contravene the consent provisions set out in Principle 4.3 of Schedule 1.

You can read the full finding here: Commissioner's Findings - PIPEDA Case Summary #320: Refusal to undergo an independent medical examination results in termination of insurance benefits (December 5, 2005).

Technorati tags: Privacy :: Consent :: Insurance.