The Saskatchewan Court of Appeal recently confirmed (January 2017) that the calculation of death benefits under The Automobile Accident Insurance Act, RSS 1978, c A-35 (the “AAIA”) cannot exceed the insured’s maximum yearly insurable earnings. In Montgrand v Saskatchewan Government Insurance, 2017 SKCA 2, the appellant and her two children were entitled to receive death benefits after her spouse was fatally injured in a motor vehicle accident. One of the main issues on appeal was whether the death benefits payable under the AAIA should be capped by the insured’s maximum yearly insurable earnings. The Appellant argued that s. 144 of the AAIA, which provides for death benefits under these circumstances, was a self-contained provision and operated independently of any maximum yearly insurable earnings cap. The Court of Appeal disagreed, and held that the AAIA clearly provides that the insured’s maximum yearly insurable earnings must be taken into account in calculating death benefits. The AAIA provides that the amount of the weekly death benefit is calculated by taking 50% of the weekly "income replacement benefit", which is defined further in Division 4 of the AAIA. Section 136(1) in Division 4 of the AAIA states that the total of all benefits that an insured can receive pursuant to Division 4 may not exceed the insured’s maximum yearly insurable earnings. Absent any clear direction to the contrary from the Legislature, the maximum yearly insurable earnings cap continues to apply to death benefits under the AAIA.

About the author: Katherine is an associate in the Regina office and has an interest in all areas of litigation, with particular interest in Family Law and Estates Litigation.

About McKercher LLP: McKercher LLP is one of Saskatchewan’s oldest, largest law firms with offices in Saskatoon and Regina. Our deep roots and client-first philosophy have made us a top ranked firm by Canadian Lawyer magazine (2011, 2013). Integrity, experience and capacity provide innovative solutions for our clients’ diverse legal issues and complex business transactions. This post is for information purposes only and should not be taken as legal opinions on any specific facts or circumstances.  Counsel should be consulted concerning your own situation and any specific legal questions you may have.