Manulife sued by TTC

TORONTO TRANSIT COMMISSION SUING FOR ALLEGED NEGLIGENCE

The Toronto Transit Commission is suing Manulife Financial for alleged negligence in connection with a benefits fraud scheme that first came to light three years ago.

To date, 170 TTC employees have been dismissed, retired or have resigned to avoid dismissal, and 10 former employees are facing criminal charges for their part in the alleged fraud.

In a statement of claim — filed in the Ontario Superior Court of Justice — the TTC alleges Manulife Financial did not have appropriate fraud management controls in place nor were there systems in place to detect and analyze unusual trends or patterns that might indicate fraud or abuse.

It maintains that Manulife breached its duties of care, which contributed to losses suffered by the TTC.

The TTC says it is seeking up to $5 million in reimbursement and damages.

The allegations in the statement of claim have not been proven in court.

Manulife spokesman Sean Pasternak said Thursday that the company does not comment on active litigation, but added it “takes fraudulent insurance claims seriously.”

“Manulife works with policyholders, law enforcement and others in order to detect and prevent fraudulent activity for the benefit of our customers,” Pasternak said in an email.

The TTC began an investigation in 2014 following a tip to its “integrity line.”

The tip alleged receipts were being provided to employees by Healthy Fit, a health-care products and service provider, where claim reimbursements were being made, but where no product or service (such as orthotics, compression stockings and sleeves) was obtained or where receipt amounts were inflated.