Disability Insurance Companies and Suspicions of Fraud

By Leanne Goldstein B.A., LL.B. 

Associate Lawyer, Share Lawyers, Lawyers

Toronto's Fraud and Waste Hotline has uncovered fraud perpetrated by employees of the City to the extent of over $500,000. Making fraudulent claims to the employee benefit plan administered by Manulife Financial and falsification of medical notes are some of the allegations being leveled against nine staff members.

This does not bode well for those claimants with legitimate disability claims against insurers like Manulife Financial. Whereas in the past insurers might have been more inclined to accept that a claimant was making a disability claim in good faith, insurers are becoming increasingly suspicious. Where insurers find evidence of fraudulent claims, it leads them to be more skeptical of genuine claims.

More insurers are resorting to adjudicating claims on the basis of investigation rather than a pure review of medical documentation. Investigators are hired and instructed to conduct surveillance of claimants in order to determine their levels of activity. Insurers then use surveillance footage to try and attack credibility by suggesting that the claimant is more active than they allege to be.

Some insurers have gone beyond the traditional hiring of an investigator to conduct surveillance and have scoured the Internet to find "information" on a claimant. Exploring websites, Facebook pages, social networking sites where claimants discuss and post their activities and emotions can provide an insurer with information that may not have been accessible in the past.

Sometimes, however, insurers go too far. On a recent mediation, counsel for the Defendant alleged that our client, Ms. D-R, was a fraud. The basis for the fraudulent accusation was the fact that Ms. D-R was allegedly using different names. It turned out that she had a last name that was comprised of both her mother's maiden name and her father's last name separated with a hyphen.

As a result, when documentation was generated by the Ministry of Health, Revenue Canada or other government or private bodies, it sometimes reflected only one of these names. A simple explanation of the anomaly was enough to clarify the issue unfortunately Ms. D-R and her claim had been stigmatized from the outset as a result of the insurer's mindset.

It required legal assistance to uncover the nature of the insurer's hard line approach to her case and to convince the insurer of her good faith.