LTD claim reviewing MAY extend a limitation period.

An application by a long term disability insurer to dismiss a claim commenced by an insured on the basis that the claim was barred by the expiration of the limitation period. The application was dismissed and costs awarded to the plaintiff.

In White v. Manufacturers Life Insurance Co. (c.o.b. Manulife), [2011] B.C.J. No. 2273, the plaintiff was insured for a long term disability benefits under a group policy issued by the defendant, Manulife Insurance. The plaintiff submitted an application for disability benefits on September 13, 2006.

On July 12, 2007 Manulife advised the plaintiff that her claim had been denied, but she had the option to request a review of the decision. The plaintiff pursued the review. Manulife required her to attend for an independent medical examination, which was completed on May 11, 2009. The physician’s opinion was not favorable to the plaintiff. Manulife wrote to the plaintiff on June 19, 2009 and advised her that it was upholding its previous decision to deny her claim.

The plaintiff commenced an action on August 12, 2009 seeking a declaration for entitlement to benefits and an order for payment of them. Manulife applied for a dismissal of her claim on the basis that it had been commenced after the expiry of the limitation period. Manulife argued that the limitation period began to run from the time that the claim was denied on July 12, 2007. They took the position that an offer to review the claim did not postpone the running of the limitation period, which by their calculation expired before the independent medical examination took place.

The Court concluded that the plaintiff had not failed to commence an action in accordance with the limitation period. The application was dismissed and costs were awarded to the plaintiff. The limitation period most favourable to the claimant was period set out in the policy which was two years after the acceptance of her proof of loss. The Court held that the limitation period did not start to run until May 19, 2009, when Manulife received the medical report following the independent medical examination.