moved:
That, pursuant to Standing Order 68(4)( b ), a legislative committee be appointed to prepare and bring in a bill that would create the position of ombudsman to oversee private disability insurers in Canada.
Mr. Speaker, this is a very interesting topic because of the amount of time that it ends up taking up not only in my office but, I am sure, in your office and the offices of all of the other members of parliament.
Most MPs who come to Ottawa try to raise issues of importance to their constituents, which is what I am doing. However, as I say, the beauty of this one is that I think it is an issue of importance to all Canadians and all members of parliament trying to represent them at the national level. Today I want to raise the issue in the House with this motion:
That, pursuant to Standing Order 68(4)(b), a legislative committee be appointed to prepare and bring in a bill that would create the position of ombudsman to oversee private disability insurers in Canada.
There is a terrible injustice being inflicted upon some Canadian citizens by private insurance companies that are refusing to honour their policies and pay benefits to people who suffer with long term disabilities.
Some of these cases involve Canadians who have put their own lives at risk in careers with the armed forces, the RCMP and the peacekeepers. Others are what we would call ordinary Canadians who have worked hard at their jobs as nurses, teachers and loggers to provide for themselves and their families.
In a nutshell, the problem is that Canadians in the workplace who find themselves with severe illnesses or disabilities which prevent them from performing their duties of employment and who then turn to their insurance companies, under which they believe they have insurance to assist them in such unfortunate circumstances, suddenly find the support is not there. Thus, the stress and anxiety they are under from their illnesses or accidents, along with the reality that they can no longer work to provide for themselves and their families, is multiplied by the process of and treatment by their insurance company.
Of course one must preface this by saying that it is not true of all claimants and not true of all insurance companies, but surely all members who are listening would agree with me that two, three and four times a week in every one of our constituency offices it happens that people are having difficulty with their disability insurance.
This is what my constituents have told me about processing their claims. First they are informed that their only option is to go on short term disability, from 26 to 52 weeks, only after they can prove with medical evidence beyond any reasonable doubt that they are severely disabled and unable to perform their duties at their present employment. At the end of the short term disability period, their insurance benefits are cut off and they are again required to go through the process to prove that they are still disabled. At that point they may be allowed to go on long term disability or be granted another short term period, but even if they are granted long term disability they will be subject to a review, usually every year. That means their benefits will again be cut off and they are required to go through the whole process over and over again with the same insurance company.
Within the past month I was made aware of two cases of constituents of mine who have received foreclosure notices on their homes from their banks due to cancellation of disability insurance benefits. These were on applications that had been completed at the bank, the lending institution, on behalf of the insurance company. They have led to disqualification of benefits, resulting in the foreclosure action by the bank.
Neither the insurance company nor the bank in these cases would take responsibility for the intent of the insurance. In other words, in these cases the bank had the customer sign documents insuring the mortgage but later the insurance company claimed it was the wrong document or application and refused to accept it and process the benefit.
The bank's response in these cases has been to discipline the employees to satisfy the insurance company. However, the banks have failed their customers, who in these cases have paid the premiums attached to the mortgage for years and believed the coverage was in place should they require it.
The intent of the insurance company and the bank to provide this coverage needs to be addressed. Do they intentionally provide wrong applications to their customers? I think not, but do the insurance companies not provide proper training to the bank employees? Perhaps. Do the insurance companies not review these applications and advise the banks that they have not processed the correct application and that their clients may not be entitled to benefits as a result? With the banks and insurance companies happily accepting their clients' insurance premiums each month, does it not obligate them to pay out benefits?
Surely if the funds are flowing through to the insurance company there is an expectation, an intent. If the paperwork is incorrect that is where an ombudsman would come in, because the banks and insurance companies end up working on and detailing only the words that are on a piece of paper.
Apparently the fact that people are paying their premiums does not really make that much difference. The question is: What can we do about it? What recourse do average Canadians have against banks and insurance companies when they find themselves faced with the circumstances that I have just described? Their insurance benefits denied, their only option is to accept it or hire a lawyer and fight for their rights. Talk about David and Goliath.
Of interest to all Canadians at this point is, if the claim is approved at this point, the insurance companies require the employee or victim to apply for early Canada pension benefits thus reducing the insurance companies benefit payable. In other words, the insurance company is downloading onto the reserves Canadians have paid into for their retirement pensions. Also of interest is that at one time all pension benefits received from an insurance company were in addition to any other pensions received such as the CPP and WCB.
The insurance companies will review each stage and suggest other employment opportunities that can be pursued so they can lower their benefit. Quoting from an insurance group's policy, it states:
“Totally disabled” shall mean, for the first 30 months of a total disability, an employee is wholly and continuously disabled by illness or accidental bodily injury which prevents him from performing the essential duties of his normal occupation. After the first 30 months of total disability, “totally disabled” shall mean he is unable to perform the essential duties of any occupation for which he is reasonably fitted by education, training or experience.”
Note that when the insured obtained the insurance it was insured at his present job.
The tactics of periodically discontinuing benefits or taking away our financial support mechanism and requiring one to continually prove he or she is incapable of working is in itself questionable. We are aware of cases where the insurance company has hired private investigators or sent their investigators out to spy on and record all activities of their clients for extended periods.
I would like to quote from letters from my constituents who, according to their doctors and medical specialists, were disabled but were unable to convince the bureaucrats working for the Canada Pension Act. The insurance providers look for any unfavourable decision from CPP so they can suspend or deny benefits. The letter states:
I had been on Long Term Disability—for over two years, at which point (the company) informed me that I had to apply for Canada Disability. This upset me at the time as I didn't consider my disability to be permanent. I am doing everything in my power to get better. It was explained to me that this is a necessary step in my health care management, and that I would qualify for benefits until such time as I was well. I was told (the company) would “top up” the benefits from CPP to my present level, if in effect, I qualified for disability pensions.
The next letter said:
Both companies denied my benefits, and I had to go through the appeal process. CPP has since denied my appeal, and I am awaiting (the company's) decision. I highly suspect (the company) is waiting to hear CPP's decision so that it can be used against me.
What we are looking at here is the fact that there is a patchwork quilt with which our constituents are faced. Much of the law that covers this particular activity in our society is federal law yet its administration is at the provincial level. Yet when we go to the provincial level, there is no ombudsman function on the part of any of the provincial governments. This unfortunately ends up falling between the cracks of federal and provincial jurisdiction. We recognize that getting an ombudsman is not the full answer because in effect we can still end up with fighting and delays and things getting in the way of the ombudsman to go ahead and work on behalf of the people.
The bottom line to the exercise is this, if people find themselves disabled and at that particular point no longer able to be gainfully employed, they now has a number of concerns.
The first concern is obviously their physical or mental incapacity to be able to perform at an ordinary level. That is a concern that would relate to everyone around them, particularly within their family unit.
Second, they will not have any income. Therefore, all their assets will be threatened and their ability to provide for themselves and their families will be threatened. It is a highly stressful situation because the two things work together in a symbiotic relationship to make both of those issues work. Then, if they are denied the benefits that they were fully anticipating by paying into a benefits program, there is a third compounding effect to their very difficult situation.
I am sure, Madam Speaker, as I said to the previous gentleman in that chair, that even in your office and in all our offices we deal with these things on a weekly basis.
The point of my motion is to tell the federal government that we have a problem and that there is no solution to the problem. The people who no longer have a job or the resources, and in many cases do not have the emotions to be able to handle the situation, require some help. To ask them to put down a $1,000, $5,000 or $10,000 retainer for a lawyer to represent them is absolutely facetious. It simply cannot happen.
Therefore, with the motion I am simply asking the government take a look at this gaping hole between the federal jurisdiction of legislation, the provincial enactment that relates to the legislation and find some way to help our constituents.
This is an opportunity for all of us in the House, on a totally non-partisan basis, to bring a balance to the people of Canada which balance the rights of the individual against the rights of these very large corporations that are all, I am sure, obeying the law but nonetheless represent a very formidable force in the face of ordinary citizens. I say that collectively, on a non-partisan basis, we should be working together to represent individual Canadians.