1. 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
  2. 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
  3. 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)
  4. Citizens Insurance v. Parsons
    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
  5. Insurance Reference Case / Attorney-General for Canada v. Attorney-General for AB
    • 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
  6. 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
  7. Re Insurance Act of Canada
    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
  8. Canadian Indemnity Company v. Attorney-General of BC
    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
  9. 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
  10. 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
  11. Provincial Regulation of Insurance in protecting the p.h.
    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
  12. 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
  13. 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
Card Set
McD Life insurance laws of Canada