McDonald

• TTCBBN
• Regulation of trade and commerce
• Raising money by taxation
• Banking
• Bankrupcy and insolvency
• Natualization and aliens
• Criminal law

• Incorporation of companies with a prov
• Property and civil rights
• Matters of local or private nature

• A fedly regulated insurer (i.e. fed incorporation)
• A prov regulated insurer registered with another prov (i.e. prov incorporation with permission to operate in other prov's)

fed vs. prov regulation

1. Facts: ON enacted Fire Policy Act (re: req'ts in fire policies), and a fed incorporated insurer questioned validity and argued ultra vires because:
   • subject matter is related to regulation of trade and commerce (exclusively in fed power)
   • province legislation can't deprive a fed incorporated or British company of its status and capacity
2. Decision: intra vires:
   • subject matter is related to regulating contracts in a single province not trade and commerce (trade & comm = “inter-prov”, not “intra-prov”)
   • Act treated all companies equally and did not affect their status

• fed enroachment
  1. Facts: fed enacted fed Insurance Act, requiring all insurers operating in >1 province to obtain fed license
  2. Decision: ultra vires:
     • regulation of trade and commerce does not extend to licensing of a particular trade
     • for a prov company to operate in another prov, they only need prov's permission (permission not required for fed company)
• Aftermath:
  • gov passed new Act amending Criminal Code making it indictable offence for a person to solicit or accept insurance risk unless on behalf of company licensed under Act
  • still within fed power to require foreign company to obtain fed license before operating in Canada even if business only in 1 province

Privy Council: fed amendments to Criminal Code were invalid as it was an attempt to regulate insurance which were not within fed power

fed encroachment

1. Facts: fed argued under fed Insurance Act, a foreign insurer operating in QC licensed under QC Insurance Act must comply with certain sections of fed Act
2. Decision: utra vires:
   • not in fed power of regulating naturalization and aliens
   • provinces had exclusive power to regulate insurance

prov regulation

1. Facts: BC created compulsory auto insurance plan and refused to renew licenses of auto insurers, who argued that:
   • matter was within exclusive fed power
   • interfered with status and capacity of fed incorporated company
2. Decision: Supreme Court of Canada unholds prov power to do so

• Conditions that must be satisfied to enter into insurance business
• Periodic reporting on financial condition
• Control over investments, calculation of asset and claim liabilities
• Protect interests of p.h.'s in areas outside of insurance contract

• have asset vested in Canada and controlled by Chief Agent or Minister of Finance
• have sufficient vested assets to cover liabilities both in Canada plus sufficient margin as determined by BAAT

1. Contract matters:
   • contents of insurance policy
   • insurable interest
   • payments of premiums
   • duty to disclose
   • incontestability
   • reinstatement
2. Other matters:
   • licensing of agents
   • unfair practices
   • claims procedures

• Applicants:
  • Nature and sufficiency of financial resources
  • Soundness of business plan
  • Business record and experience
• Character, competence and experience of those operating the company
• Whether in best interests of Canadian financial system
• If foreign subsidiary, Canadian insurer will be treated as favourably

• Capable of contributing to Canadian financial system
• Canadian insurers treated as favourably as in principal jurisd
• Appoint Canadian resident to be Chief Agent
• Appoint auditor and actuary for business in Canada
• prescribed value vested in trust, in a trust company approved by Superintendent
• Maintain adequate margin of A's over L's in Canada