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Matters that fed gov has exclusive legislative authority over
- TTCBBN
- Regulation of trade and commerce
- Raising money by taxation
- Banking
- Bankrupcy and insolvency
- Natualization and aliens
- Criminal law
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Classes of subjects that provincial legislation has exclusive legislative authority over
- Incorporation of companies with a prov
- Property and civil rights
- Matters of local or private nature
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2 ways an insurer can operate in >1 province
- 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)
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Citizens Insurance v. Parsons
fed vs. prov regulation - 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
- 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
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Insurance Reference Case / Attorney-General for Canada v. Attorney-General for AB
- fed enroachment
- Facts
: fed enacted fed Insurance Act, requiring all insurers operating in >1 province to obtain fed license - 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
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Reference re Reciprocal Insurance Legislation
Privy Council: fed amendments to Criminal Code were invalid as it was an attempt to regulate insurance which were not within fed power
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Re Insurance Act of Canada
fed encroachment - 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
- Decision: utra vires:
- not in fed power of regulating naturalization and aliens
- provinces had exclusive power to regulate insurance
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Canadian Indemnity Company v. Attorney-General of BC
prov regulation - 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
- Decision: Supreme Court of Canada unholds prov power to do so
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Areas that fed legislation is concerned with re: financial soundness of an insurance company.
- 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
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Requirements for foreign company to hold adequate asset in Canada under ICA
- 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
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Provincial Regulation of Insurance in protecting the p.h.
- Contract matters:
- contents of insurance policy
- insurable interest
- payments of premiums
- duty to disclose
- incontestability
- reinstatement
- Other matters:
- licensing of agents
- unfair practices
- claims procedures
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Considerations before incorporating a company
- 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
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Conditions for foreign companies to be incorporated
- 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
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