Written by Kelsey Buchmayer, associate with the Ottawa office of Gowling WLG (Canada) LLP

An insurer should not necessarily require a probated Will to release the proceeds of a life insurance policy.

Section 203 of the Insurance Act[1] sets out that upon receipt of “sufficient evidence”, an insurance company should pay the insurance money to the person entitled thereto, and within thirty days of receiving the evidence:

203 (1) Where an insurer receives sufficient evidence of,

(a)  the happening of the event upon which insurance money becomes payable;

(b)  the age of the person whose life is insured;

(c)  the right of the claimant to receive payment; and

(d)  the name and age of the beneficiary, if there is a beneficiary,

it shall, within thirty days after receiving the evidence, pay the insurance money to the person entitled thereto.

At issue in the 1999 Ontario Court of Justice decision of Rozon v Transamerica Life Insurance Co of Canada[2] was whether a probated Will was required to constitute “sufficient evidence” before the insurer could release the funds of a life insurance policy payable to the estate of the deceased. The Court disagreed with the insurer and held that “There is nothing in the Insurance Act which should lead the court to interpret “sufficient evidence” to mean necessarily a probated will.”[3]

In clarifying the Court’s reasons in a supplementary endorsement decision, Charbonneau J. explained: “there is no prerequisite for a “probated” will as a pre-condition to payment of life insurance proceeds to an estate claimant under the Insurance Act.”[4]

At the Ontario Court of Appeal, the appeal by the insurer was dismissed with the Court holding: “In our view this appeal must be dismissed. We agree with Charbonneau J. that there is nothing in the Insurance Act that should lead the court to interpret “sufficient evidence” in s. 203 to mean necessarily a probated will.”[5]

As set out by case law, “sufficient evidence” as set out at section 203 of the Insurance Act does not necessitate a probated Will.

Individuals often engage in planning to avoid probate, whether for simplicity in administration, saving of probate fees, or confidentiality of their Will. Though there may be other reasons or third-party institutions that necessitate probate (even when probate planning was attempted), the release of funds of a deceased’s life insurance policy should not be one of them.

[1] Insurance Act, RSO 1990, c I.8, s 203.

[2] Rozon v Transamerica Life Insurance Co of Canada, 1999 CarswellOnt 4840, [1999] OJ No 5599, with supplementary endorsement in 1999 CarswellOnt 4841, and affirmed by the Ontario Court of Appeal in Rozon Estate v Transamerica Life Insurance Co of Canada, 1999 CarswellOnt 4391, [1999] OJ No 4538.

[3] Rozon v Transamerica Life Insurance Co of Canada, 1999 CarswellOnt 4840, [1999] OJ No 5599 at para 2.

[4] Rozon v Transamerica Life Insurance Co of Canada, 1999 CarswellOnt 4841 at para 1.

[5] Rozon Estate v Transamerica Life Insurance Co of Canada, 1999 CarswellOnt 4391, [1999] OJ No 4538 at para 1.