How Varriano Changed SABS Notice Requirements
Over the last several years, the discussion surrounding “medical and other reasons” under the SABS has evolved significantly. Earlier LAT decisions increasingly scrutinized insurer notices and denial wording, particularly where the insurer relied on generic references to “medical documentation” or conclusory statements that did little to explain the dispute between the parties.
At the same time, adjusters work in an environment driven by timelines, high volume claims handling, and constant correspondence obligations. Templates, standardized wording, and automated processes are part of modern accident benefits practice. The issue arises when the notice stops reflecting the claim itself and starts reading like a form letter that could apply to almost anyone.
In many cases, the difference between a defensible notice and a problematic one is not the length of the explanation, but whether the notice addresses the claimant’s circumstances and the reason for the determination.
The 2023 Ontario Court of Appeal decision in Varriano v. Allstate Insurance Company of Canada[1] changed the discussion. The Court clarified that insurers are not required to provide medical reasons in every case. Instead, insurers are required to provide the actual reasons relied upon for the determination being made.
That distinction matters because notice obligations under the SABS are rooted in consumer protection principles. The notice should allow the insured person to understand the determination, why it was made, and whether it should be disputed. As the Court noted in Varriano, citing earlier caselaw, the purpose of the requirement to give reasons is “to permit the insured to decide whether or not to challenge the cancellation.”
Since Varriano, the issue is no longer whether every notice contains medical language. The issue is whether the insurer has clearly explained the basis for its determination.
This discussion also becomes increasingly important in light of the upcoming SABS changes. As coverage options and policy structures become more individualized, adjusters will need to ensure that notices accurately reflect not only the determination being made, but also the coverage available under the insured’s policy. Standardized wording will become increasingly difficult to rely upon where entitlement itself may differ significantly from one claim to another.
Where “Medical and Other Reasons” Appears in the SABS
The requirement to provide “medical and (any) other reasons” appears throughout the SABS and affects several different areas of accident benefits practice.
Under section 38(8), insurers denying treatment and assessment plans are required to provide medical and other reasons for the determination. Under section 44(5), insurers requesting insurer examinations must explain the medical and other reasons for the examination request. Section 37(4) similarly requires insurers to explain the basis for stoppages or terminations of specified benefits.
The requirement is not confined to one type of determination or category of benefit. It regularly arises in treatment disputes, insurer examination disputes, entitlement disputes, and limitation period litigation.
The upcoming SABS amendments will increase the importance of carefully identifying the actual basis for a determination and the specific coverage available under the policy. As optional benefits and coverage structures become more individualized, notices will require greater attention to the insured’s election of coverage and entitlement framework.
Proper notice is not simply a drafting issue. Defective notices create significant procedural and substantive consequences under the SABS. In treatment plan disputes, defective notices may trigger mandatory payment consequences. In insurer examination disputes, they may undermine reliance on non-attendance and affect section 55 arguments. In stoppage or termination disputes, they may affect whether limitation periods are triggered at all.
As a result, notice sufficiency frequently becomes a threshold issue before the LAT. Many disputes ultimately turn not only on entitlement, but on whether the insurer properly explained the determination in the first place.
These notice requirements exist not only to satisfy procedural obligations under the SABS, but also to ensure that insured persons understand the actual basis for the insurer’s determination and can respond accordingly.
Practice Point
- Before drafting any notice, identify both the statutory provision being relied upon and the consequence that may follow if the notice is later found deficient.
Why Defective SABS Notices Matter
Defective notices can create consequences well beyond the immediate benefit dispute. Depending on the issue, they may affect limitation periods, mandatory payment obligations, insurer examination compliance arguments, and overall litigation strategy. In practice, notice sufficiency is often one of the first issues examined once a matter proceeds to the LAT.
Practice Point
- Before sending a notice, make sure you can clearly answer a simple question: why is the insurer making this determination? If that reason cannot be easily articulated, the notice will likely be difficult to defend later.
Earlier LAT Decisions on SABS Notice Requirements
Several earlier LAT reconsideration decisions signaled increasing scrutiny of insurer notices and denial wording. Boilerplate explanations became increasingly vulnerable to challenge, particularly where the insurer relied on broad references to “medical documentation” or unsupported conclusions regarding treatment or entitlement.
In M.B. v. Aviva Insurance Canada[2], the LAT emphasized that notices should explain the insurer’s determination with reference to the claimant’s condition and should allow an unsophisticated insured person to understand the dispute. The decision reflected a broader shift toward requiring more meaningful explanations tied directly to the claim.
The LAT expanded on that approach in T.F. v. Peel Mutual Insurance Company[3] and B.H. v. Aviva Canada Inc[4]. In both cases, the LAT rejected vague references to “clinical notes,” “medical documentation,” or generalized assertions that treatment was unsupported. The issue was not simply that the notices were brief. The issue was that the explanations failed to meaningfully connect the insurer’s reasoning to the evidence in the file and the actual dispute between the parties. ⁴
By the time these reconsideration decisions were released, many insurers and counsel were left with the impression that nearly every entitlement determination required detailed medical reasoning tied directly to the file.
The Court of Appeal addressed that concern in Varriano.
How Varriano Changed the SABS Notice Framework
In Varriano, the Court of Appeal confirmed that insurers are not required to provide medical reasons in every case. Rather, insurers are required to provide the actual reasons relied upon for the determination being made. As the Court explained, the obligation is tied directly to the basis for the insurer’s decision under the SABS.
Varriano clarified the issue.
The Court confirmed that insurers are not required to provide medical reasons in every case. Rather, insurers are required to explain the basis for the determination being made. As the Court explained, the purpose of the notice requirement is “to permit the insured to decide whether or not to challenge the cancellation.”[5] The obligation is therefore tied directly to the basis for the insurer’s decision under the SABS.
When Medical Reasons Are Required Under the SABS
If the determination depends on medical entitlement, such as causation, disability, treatment necessity, or impairment, medical reasoning will generally be required. Where the determination is based on a non-medical issue, such as a return to work or failure to provide documentation, the insurer is not required to create medical reasoning where none exists.
Varriano shifted the focus from whether every notice contains medical language to whether the notice explains the basis for the insurer’s position.
That does not mean adjusters should read Varriano as permission to send generic notices. Many disputes involve both medical and procedural considerations. In those situations, the safest approach is usually to explain all material grounds being relied upon.
The distinction can often be framed simply:
When Non-Medical Reasons Satisfy the SABS
In practical terms, medical reasons will usually be required where the determination depends on medical entitlement, such as treatment denials, insurer examination requests, causation disputes, or MIG determinations. Conversely, where the determination is based on a non-medical issue, such as a return to work, failure to provide forms, or another procedural issue, the insurer is generally required to explain that non-medical basis rather than create medical reasoning where none exists.
A simple example helps illustrate the distinction. If an insurer stops IRBs because the insured has returned to full time work, the notice should explain that return to work information and the basis for the stoppage. Conversely, if the insurer denies treatment because the proposed intervention is not considered reasonable and necessary, the notice should explain the medical information supporting that determination.
From a litigation perspective, adjudicators will generally examine whether the notice reflects the insurer’s reasoning at the time the determination was made and whether the insured person could reasonably understand the basis for the determination and decide whether to dispute it.
Practice Point
- Adjusters should start by identifying the actual basis for the determination before drafting the notice. If the issue is fundamentally procedural or eligibility based, the notice should clearly explain that basis rather than defaulting to generalized medical language.
While Varriano clarified that insurers are not required to provide medical reasons in every case, the decision did not eliminate the obligation to provide meaningful, defensible explanations tied to the actual determination being made. In practice, many of the most difficult issues now arise not from the legal test itself, but from how notices are drafted on real accident benefits files.
In Part 2, we will look at the practical side of the issue, including common drafting problems, how adjusters can structure more defensible notices, and why substance matters far more than length.
[1] Varriano v. Allstate Insurance Company of Canada,2023 ONCA 78 (CanLII)
[2] M.B. v. Aviva Insurance Canada, 2017 CanLII 87160 (ON LAT)
[3] 16-003316/AABS v. Peel Mutual Insurance Company, 2018 CanLII 39373 (ON LAT)
[4] 17-003774/AABS v. Aviva Canada Inc., 2018 CanLII 84051 (ON LAT)
[5] Varriano v. Allstate [para 32], taken from Turner v. State Farm Mutual Automobile Insurance Co., (2005) 2005 CanLII 2551 (ON CA)
