The Discipline committee of the ChAD was asked to rule on the duty of a claims adjuster (the respondent) to act with objectivity and fairness when settling a claim.
The Facts of the Case
The insured, his son, and daughter-in-law bought a house in Saint-Adolphe-d’Howard on June 9, 2007. At the time of purchase, the son did not qualify for a mortgage on his own. His financial institution accepted his father as a guarantor and thus, out of necessity rather than an actual desire to do so, the father became a co-owner of the house, together with his son and daughter-in-law.
During the night of December 15-16, 2007, barely six months after its purchase, the house was engulfed in flames and totally destroyed. The insureds notified the insurer of their loss and on December 17, 2007, the respondent was mandated to settle the claim.
Immediately, the respondent’s superior informed him that the father/co-insured was registered with the Insurance Crime Prevention Bureau (ICPB). Apparently, the father had been the owner of a four-plex that had been destroyed by fire in 1996. In the ICPB’s files, the event was described as four separate fires. The respondent thus began his investigation under a false impression.
From the first meeting onwards, the atmosphere between the parties was cold and tense. The respondent began by questioning the father regarding the fire that had destroyed his “four apartments” in 1996.
The respondent then learned that at the time the fire broke out, no one was home. The son/co-insured was the first to arrive on the scene while his wife and children were out visiting friends. At this point, the respondent began to consider the son/co-insured as a suspect. He never lost this impression, which served to justify his behaviour and the decisions he made on the insureds’ file.
The reasons underlying the respondent’s suspicions concerning the origin of the fire could be summarized as follows:
- The fact that the father was registered with the ICPB.
- The father’s behaviour: at their first meeting, and without even introducing himself, the father gave him a series of invoices.
- Contradictions in the various statements made by the son.
- The fact that his wife and children were conveniently absent when the fire broke out.
- The couple’s financial difficulties.
- The father’s refusal to let his son ride alone with the respondent in his car when going to visit the site of the fire.
- The fact that a specialized firm had analyzed the son’s written statement and concluded that it was false.
- The statutory examination of the son and the opinion of the insurer’s legal counsel, who also had serious doubts about the truthfulness of his statements.
It should be noted that the Saint-Adolphe-d’Howard fire department and police department both came to the conclusion that the fire was accidental. The chemical engineer retained by the respondent was unable to establish the cause of the fire. Ultimately, on June 3, 2008, the insurer decided to compensate the insureds for their loss.
Essentially, the insureds blamed the respondent for having been slow in processing their claim, and in particular, for having unfairly suspected them of criminal intent.
After conducting an investigation, the Syndic’s office lodged a formal complaint with the Discipline committee, based on section 27 of the Code of Ethics of claims adjusters that reads as follows:
27. Claims adjusters must act promptly, honestly and fairly in providing their professional services under the mandates entrusted to them.
Specifically, the respondent was charged with failing in his duty to act with objectivity and fairness, having plagued the insureds with undue requests for information and shown a total unwillingness to engage in any negotiations.
The Discipline Committee
The Discipline committee heard evidence that on two occasions the respondent required the insureds to provide sworn lists of property and initial each paragraph.
The evidence also showed that although the insurer agreed to the insureds’ claim, the respondent asked them for the preceding four years’ worth of tax returns, notices of assessment, budgets and a list of all the books they had bought.
To quote the Discipline committee: “[…] despite the insurer’s decision, the respondent […] continued to hound the insureds in order to confirm the suspicions he had held against them since the file was opened.”
After the hearing, the Discipline committee found the respondent guilty of, amongst other things, failing in his duty to act with objectivity and fairness in processing the claim, in contravention of section 27 of the Code of Ethics of claims adjusters.
On June 25, 2013, the respondent was found guilty of this charge and sentenced to pay a fine of $2,0002.
By Me Marie-Josée Belhumeur, LL.B., syndic
Chambre de l’assurance de dommages c. Lévesque, 2013 CanLII 4787 (QC CDCHAD).
Chambre de l’assurance de dommages c. Lévesque, 2013 CanLII 46531 (QC CDCHAD).