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1992 Report of the Auditor General of Canada

1992 Report—Chapter 2

Exhibit 2.4—Review of claims that took more than six months to process during 1990-91 and 1991-92

CASE 1

  • Claim for damages due to lightning.
  • Headquarters rejected the claim because "the Plan does not insure against lightning".
  • Regional staff identified examples of similar claims approved in the past.
  • Legal advice was sought and suggested claim could be paid.
  • Legal advice also suggested that policy wording could be changed to prevent future confusion.
  • Headquarters maintained decision to reject the claim.
  • Fisherman initiated legal action.
  • Regional staff again showed examples of similar claims approved in the past.
  • Headquarters approved the claim.
  • Turnaround time: 18 months.
  • Management still not clear as to whether existing policy covers damage caused by lightning.
CASE 2

  • Claim for motors that were installed on a new uninsured vessel damaged by fire.
  • Motors were originally on an older, insured vessel.
  • Considering mitigating circumstances, the regional manager recommended approval of the claim for motors on a "common sense basis".
  • Headquarters rejected the claim on the basis that equipment is insured only insofar as it is used on the insured hull.
  • Damaged hull was not insured and not claimed.
  • Using a broad interpretation of FVIP Regulations, headquarters suggested that the new vessel and motors be retroactively insured so that a claim for both the hull and motors could be paid.
  • Regional staff expressed serious reservations about insuring a boat after the fact and requested that the initial claim for motors only be approved.
  • Headquarters approved the initial claim for motors.
  • Turnaround time: 5 months.
CASE 3

  • Claim for latent defect.
  • Suggestion that wear and tear may be the cause.
  • Special investigation concluded that the cause was latent defect and not wear and tear.
  • Regional manager recommended approval of the claim.
  • Headquarters argued wear and tear was the cause.
  • Headquarters requested the damaged components for examination by metallurgical laboratories.
  • Regional manager provided the requested component mentioning that past experience with such examination "has been less than satisfactory".
  • No result of metallurgical analysis in the file.
  • Headquarters approved the claim.
  • Turnaround time: 9 months.