The case involved an Ontario resident who was struck by a vehicle in Alberta
The Ontario Superior Court of Justice upheld an arbitrator’s decision requiring one insurer to indemnify another under Ontario's loss transfer rules, affirming that the province’s insurance regulations can apply to insurers licensed in Ontario, even when the accident occurs outside the province.
The dispute centred on Ontario’s loss transfer provisions under s. 275 of the Insurance Act, which allows an insurer covering a vulnerable party (e.g., motorcycle drivers) to seek indemnification from the insurer of the at-fault party in a collision. In this case, Echelon Insurance, an Ontario-based insurer, provided accident benefits to its insured, Joseph Thoo, an Ontario resident, after he was struck by a vehicle insured by Aviva Insurance Company in Alberta. Echelon then sought indemnification from Aviva, relying on Ontario’s loss transfer rules as clarified in the 2010 Primmum v. Allstate decision.
In an earlier arbitration, the arbitrator ruled that Primmum v. Allstate applied, obligating Aviva to reimburse Echelon under Ontario law. Aviva contested this ruling, arguing that the 2020 Travelers Insurance Company of Canada v. CAA Insurance Company decision questioned Primmum’s applicability, especially regarding cross-jurisdictional cases. Aviva contended that Travelers had effectively limited Ontario’s ability to impose its loss transfer provisions extraterritorially, particularly on insurance contracts issued in other provinces.
The Superior Court upheld the arbitrator’s decision, affirming that Primmum remained a binding precedent. He noted that while Travelers discussed concerns about Ontario's reach in insurance matters beyond provincial borders, it addressed a different aspect of the Insurance Act—priority of coverage—rather than loss transfer. The court confirmed that Travelers did not overturn Primmum and that, since Aviva is licensed in Ontario, the loss transfer provisions validly apply. He concluded that only the Court of Appeal could revisit or modify the rule established in Primmum.
Although the court recognized Aviva’s argument about potential constitutional overreach, he ultimately found that Primmum remained controlling on this issue. He acknowledged that addressing constitutional limits on Ontario’s legislative reach would require an appellate-level assessment. As a result, he upheld the arbitrator's decision, reinforcing that Ontario’s loss transfer regulations could apply when at least one involved insurer is licensed within the province.
