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The Manitoba Public Insurance Corporation Act, CCSM c P215 creates a scheme of insurance under which the MPI is subject to the duty of good faith in administering the personal injury claim of an uninsured automobile interest

Manitoba

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Canada

Manitoba Public Insurance Corporation Is Subject to the Duty of Good Faith In Martens v. The Manitoba Public Insurance Corporation, 2021 MBCA 102, the Manitoba Court of Appeal considered whether the Manitoba Public Insurance Corporation has a duty to act in good faith in administering the personal injury claim of an uninsured automobile accident victim.With respect to the relationship created by Part 2 of the Manitoba Public Insurance Corporation Act, the relationship between the insurer and the people who benefit from their insurance is not a contractual relationship, in the conventional sense of the expression. The rights acquired by both parties, and their corresponding duties, are not grounded in an agreement voluntarily negotiated, but in a regulatory framework imposed upon them (paras 17-26).Nevertheless, the legislative history of Part 2 of the Act supports the view that it involves insurance, and the MBCA has previously stated that the scheme under Part 2 of the Act is insurance (paras 29-30). Part 2 of the Act is best described as a scheme of insurance rather than as social welfare legislation (para 44).The duty of good faith imposed on an insurer was defined in Fidler v. Sun Life Assurance Co. Of Canada, 2006 SCC 30 (para 48). There is authority for the duty of good faith to apply to public insurers in the same manner as private insurers. In other Canadian jurisdictions, the duty on a public insurer in administering no-fault benefits has been described by the courts as a high standard of commercial morality (paras 50-51). The obligation of good faith has also been held to apply in situations where an individual was not in a contractual relationship with a public insurer but was nonetheless treated as an insured. It was the establishment of a relationship of insurer and insured that resulted in the obligation to act in good faith (para 53).The Legislature did not intend to remove MPI’s duty of good faith to its insureds. Rather, the obligations imposed on MPI in s. 150 are complementary to the existing duty of good faith owed by MPI to its insureds at common law (para 57).Whether the actions of an insurer constitute bad faith is determined on the facts in each individual case. The court considers the conduct of the insurer throughout the claims process (para 152).

April 14, 2022
Martens v The Manitoba Public Insurance Corporation, 2021 MBCA 102