On January 7, 2020, in Talbot c. Industrielle Alliance, assurances et services financiers inc., 2020 QCCS 193, Justice Martin Dallaire dismissed a claim for a critical illness insurance benefit following a cancer diagnosis for which the insured showed signs and symptoms during the moratorium period. However, he concluded that this clause cannot have the effect of excluding a recurrence or a new diagnosis of cancer.
The Facts
In May of 2014, the Plaintiff purchased a Critical Illness Insurance policy with Industrial Alliance. The policy was delivered on July 10, 2014, and the Plaintiff signed a receipt acknowledging having reviewed the important elements of the insurance coverage.
Meanwhile, the Plaintiff developed chronic pain in his jaw and in June 2014, he was advised to consult an ENT specialist, which he did on July 15, 2014. On August 29, a computed tomography scan revealed a mass. A cancer of the parotid gland was diagnosed in November of 2014.
After reviewing the claim, the insurer concluded that the moratorium period exclusion applied. The insurer further specified that any claim related to a diagnosis of cancer that may be made in the future would be excluded.
The clause reads as follows:
| Moratorium period of exclusion
No Critical Illness Benefit will be payable for any diagnosis of cancer made during the moratorium period described below or thereafter, if: within 90 days of the latest of the following dates:
the Insured Life:
[Our translation] |
The Plaintiff argued that this clause is ambiguous and inconsistent with the application. After the proceedings were instituted, he added the broker as defendant, arguing that the broker failed in his duty to advise him and never told him about the moratorium period.
The Moratorium Period
Justice Dallaire dismissed the argument that the clause is ambiguous. He pointed out that the wording of the policy is sufficiently explicit to allow a reasonable person to understand that the occurrence of an illness within the moratorium period will trigger its application.
In this case, the medical evidence was clear, as the Plaintiff showed signs and symptoms related to his illness a few days before the application was signed and he consulted a specialist in the weeks that followed. Justice Dallaire concluded that the illness was present within 90 days of the Effective Date of the Policy.
As mentioned by Justice Claude Bouchard in Camiré c. Desjardins Sécurité financière, 2018 QCCS 1503, concerning a similar clause :
| [18] […] It does not matter whether or not Ms. Camiré knew of the existence of a sign or symptom leading to the diagnosis of brain tumor during the moratorium of exclusion, the real question being whether it existed during this period.
[Our translation] |
Regarding the argument of discrepancy between the application and the policy, Justice Dallaire points out that, for a discrepancy to exist, what is delivered and stated must not correspond to the wording of the policy. That is not the case.
Broker’s Liability
Justice Dallaire reminds us that the relationship between the broker and his client is governed by the rules of the mandate. As a professional, the broker assumed several obligations, including the obligation to advise and inform his client.
The judge concluded that the broker had not committed any fault. The parties did meet, and the broker provided essential information about the type of product and the insurance coverage. Furthermore, the Plaintiff is a savvy businessman.
Relying on Pouliot c. Gauthier, 2019 QCCS 3669, Justice Dallaire noted that the obligation to provide information should not be given such a scope that it would negate everyone’s obligation to inquire and obtain all the information needed.
He also stressed that failure to read a contract may, in certain cases, amount to gross negligence.
In this case, the plaintiff took almost four years before questioning his broker. If the latter had been so incompetent or had advised him so poorly, we can assume that the Plaintiff would have criticized him much earlier.
Exclusion of Any Future Cancer Diagnosis
Alternatively, the Plaintiff asked for a declaration that the protection remains valid for all conditions provided for in the policy, including any covered cancer. According to the insurer, the moratorium period exclusion applies to any new cancer that would be diagnosed later.
Justice Dallaire considered that the interpretation suggested by the insurer goes against the spirit and the letter of the exclusion. In his view, this argument is based on “tricks of the trade” and he cannot conceive that a cancer far removed from the one excluded by the clause would not be covered in the future. If that is the intention, it should be worded clearly. The judge therefore concluded that the insured continues to benefit from the critical illness insurance protection for any covered cancer.
Élisabeth Laroche and Sarah Bouzo are respectively a partner and an articled student in our Insurance Law Practice Group. They successfully represented the defendant broker in this case.
