for up to $5 million in damages. Originally filed in the Ontario Superior Court of Justice last year, the TTC confirmed on Thursday it is proceeding with the case. This latest development is part of an ongoing saga between the insurance giant and the TTC, which started in 2014 following a tip-off alleging employee benefits fraud.
The statement of claim alleges “negligence and breach of contract'' by Manulife, leading to substantial losses for TTC.
“Manulife employed incompetent managers, employees and contractors in connection with administration and operation of the systems and procedures so that such systems and procedures were inadequate in all of the circumstances for the purpose of preventing and detecting fraud,'' the claim states.
In response, Manulife said it does not comment on active litigation as a matter of policy, but added: “Manulife 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.”
The dispute began when an internal investigation by the TTC uncovered receipts 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 were provided, or receipt amounts were inflated.
Earlier this week, Adam Smith, proprietor of Healthy Fit, pleaded guilty to two counts of fraud over $5,000 and sentenced to two years in prison.
In addition, ten current and former TTC employees have been charged criminally for fraud, while a 2016 report from the Toronto Auditor General suggested as many as 600 TTC workers may have been involved in the scheme.
The suit comes as Manulife welcomes new CEO Roy Gori into the role, replacing the outgoing Donald Guloien. The insurer was replaced as Toronto City’s plan administrator at the end of 2016 by Green Shield Canada.
10 TTC employees charged as probe into benefits fraud continues
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The Toronto Transit Commission is suing