Our Insurance Company Module provides answers to a number of questions with respect to the licensing of insurance companies in Canada and in all Canadian provinces and territories. Some of the answers below refer to our Agents and Brokers module.
Please click here to access our Agents and Brokers module.
Please click here to access our Agents and Brokers module.
This information is current as of December 1, 2017.
1. Under what legislation are insurance companies required to be licensed?
Section 52(1) of the Insurance Companies Act (Canada) provides that, in the case of insurance companies or federal benefit societies incorporated under the Insurance Companies Act (Canada):
Subject to subsection (6), a company or society shall not carry on any business until the Superintendent has, by order, approved the commencement and carrying on of business by the company or society."
Section 573(1) of the Insurance Companies Act (Canada) provides that, in the case of insurance companies or fraternal benefit societies incorporated under the laws of a country other than Canada:
"A foreign entity shall not insure in Canada a risk unless it is authorized by order made under subsection 574(1)."
2. What activities carried on by an insurance company in Canada require a licence?
Subsection 574(1) of the ICA provides that:
"On application by a foreign entity the Superintendent1 may, with the approval of the Minister2 but subject to the other provisions of this Part, make an order approving the insuring in Canada of risks by the foreign entity."
The phrase "insure in Canada a risk" is not defined in the ICA. However, the Office of the Superintendent of Financial Institutions ("OSFI") has issued an Advisory entitled "Insurance in Canada of Risks", which provides the following explanation of this concept and guidance on what activities carried on by a foreign insurer would require it to obtain an authorization to "insure in Canada a risk" under the ICA:
"1. The ICA does not define "insuring in Canada a risk" which, when read in the context of Part XIII of the ICA, falls within the "insurance business in Canada" of a foreign insurer. A review of case law indicates that courts have not interpreted these concepts, but have interpreted the analogous concept of "carrying on business in Canada". Based on these interpretations, the location where operations are carried on is of significant importance in determining the location where business is carried on.
2. To determine whether a foreign insurer is insuring in Canada a risk, consideration should be given to whether any person acting for, or on behalf of, the foreign insurer:
(a) promotes the foreign insurer or the foreign insurer's insurance products through a medium of communication that is primarily circulated, transmitted, broadcasted or otherwise accessible in Canada (other than in the course of the activity referred to in subparagraph 2(b) below);
(b) directly incites a person located in Canada to request insurance coverage (where that person is specifically identified and targeted), and that person is provided with the opportunity and/or means with which to make a request for insurance coverage in the course of that activity (e.g., telemarketing, door-to-door solicitation, direct/targeted mail);
(c) receives in Canada a request for insurance coverage from a policyholder;
(d) negotiates from Canada the terms and conditions of insurance coverage;
(e) decides in Canada to bind the foreign insurer to insurance coverage;
(f) communicates from Canada an offer to provide insurance coverage, or the acceptance of a request for insurance coverage, to a policyholder;
(g) receives in Canada an acceptance of the foreign insurer's offer to provide insurance coverage from a policyholder;
(h) receives in Canada payment for insurance coverage from a policyholder;
(i) interacts in Canada with the policyholder in the provision of services related to the insurance coverage (e.g., providing information about the coverage and receiving claims).
3. While each business model must be assessed on the basis of its own components, OSFI is of the view that:
(j) the indicia in paragraph 2 are not necessarily exhaustive; and
(k) where an activity referred to paragraph 2 occurs partly in Canada and partly outside Canada, the location where most of the material aspects of that activity occur should be regarded as the location where it occurs.
4. OSFI considers that a foreign insurer is insuring in Canada a risk where its business model encompasses:
Scenario 1: Two or more of the activities referred to in any of subparagraphs 2(b) to (h).
Scenario 2: Any one of the activities referred to in any subparagraphs 2(b) to (h) and both of the activities referred to in subparagraphs 2(a) and (i).
Scenario 3: Reaching an agreement, actual or in principle, on most or all of the material terms and conditions of the insurance coverage in the course of its negotiations in Canada (i.e., this Scenario contemplates that, in addition to 2(d), at least one additional activity referred to in 2(e) through (g) would apply).
5. OSFI considers that a foreign insurer is not insuring in Canada a risk where its business model encompasses no more than one of the activities referred to in paragraph 2."
The provinces and territories (except British Columbia and Quebec) require all foreign entities with branches registered in Canada to sign the following Consent and Undertaking:
"CONSENT AND UNDERTAKING
On January 1, 2010, amendments to Part XIII of the Insurance Companies Act (Canada) (the "Act") that affect the regulatory scope of the federal regime as it applies to foreign insurance companies will come into force.
To facilitate the conduct of insurance business across Canada, and avoid duplication of prudential regulation between jurisdictions, a foreign insurance company authorized under the Act to insure in Canada risks may, at its option, choose to enter into this Consent and Undertaking with the insurance regulators of the following provinces and territories:
Alberta, Saskatchewan, Manitoba, New Brunswick, Nova Scotia, Ontario, Prince Edward Island, Newfoundland and Labrador, Yukon Territory, the Northwest Territories and Territory of Nunavut (each, a "Province").
This Consent and Undertaking does not change any requirement under each Province's laws to obtain a licence, the requirement to hold a licence being governed by the laws of each particular Province.
ACCORDINGLY, THE INSURER UNDERTAKES AND AGREES THAT:
1. All risks insured by the Insurer as a result of any activity or activities that cause the Insurer to either carry on business under any Province's insurance legislation or transact insurance in any Province, shall be insured by the Insurer only in a manner that requires the Insurer to vest assets in trust in respect of those risks, pursuant to the Act.
2. The Insurer agrees to the above being added as a condition on its insurance licence issued by each Province, other than Ontario.
3. For the purposes of Ontario, the Insurer hereby acknowledges and agrees that the above is an undertaking within the meaning of paragraphs 447(2)(c) and 448(1)(b) of the Insurance Act (Ontario).
This Undertaking only applies to a Foreign Insurer with a branch registered in Canada under the Insurance Companies Act (Canada)."
1 The Superintendent of Financial Institution (Canada).
2 The Minister of Finance (Canada).3. Which jurisdictions have legislation that deems insurance contracts to be made in their jurisdiction?
N/A
4. What exceptions are there to the requirements for an insurance company to be licensed?
The phrase "insure in Canada a risk" is not defined in the ICA. However, the Office of the Superintendent of Financial Institutions ("OSFI") has issued an Advisory entitled "Insurance in Canada of Risks", which provides the following explanation of this concept and guidance on what activities a foreign insurer could carry on in Canada without being authorized to "insure in Canada a risk" under the ICA:
"1. The ICA does not define "insuring in Canada a risk" which, when read in the context of Part XIII of the ICA, falls within the "insurance business in Canada" of a foreign insurer. A review of case law indicates that courts have not interpreted these concepts, but have interpreted the analogous concept of "carrying on business in Canada". Based on these interpretations, the location where operations are carried on is of significant importance in determining the location where business is carried on.
2. To determine whether a foreign insurer is insuring in Canada a risk, consideration should be given to whether any person acting for, or on behalf of, the foreign insurer:
(a) promotes the foreign insurer or the foreign insurer's insurance products through a medium of communication that is primarily circulated, transmitted, broadcasted or otherwise accessible in Canada (other than in the course of the activity referred to in subparagraph 2(b) below);
(b) directly incites a person located in Canada to request insurance coverage (where that person is specifically identified and targeted), and that person is provided with the opportunity and/or means with which to make a request for insurance coverage in the course of that activity (e.g., telemarketing, door-to-door solicitation, direct/targeted mail);
(c) receives in Canada a request for insurance coverage from a policyholder;
(d) negotiates from Canada the terms and conditions of insurance coverage;
(e) decides in Canada to bind the foreign insurer to insurance coverage;
(f) communicates from Canada an offer to provide insurance coverage, or the acceptance of a request for insurance coverage, to a policyholder;
(g) receives in Canada an acceptance of the foreign insurer's offer to provide insurance coverage from a policyholder;
(h) receives in Canada payment for insurance coverage from a policyholder;
(i) interacts in Canada with the policyholder in the provision of services related to the insurance coverage (e.g., providing information about the coverage and receiving claims).
3. While each business model must be assessed on the basis of its own components, OSFI is of the view that:
(j) the indicia in paragraph 2 are not necessarily exhaustive; and
(k) where an activity referred to paragraph 2 occurs partly in Canada and partly outside Canada, the location where most of the material aspects of that activity occur should be regarded as the location where it occurs.
4. OSFI considers that a foreign insurer is insuring in Canada a risk where its business model encompasses:
Scenario 1: Two or more of the activities referred to in any of subparagraphs 2(b) to (h).
Scenario 2: Any one of the activities referred to in any subparagraphs 2(b) to (h) and both of the activities referred to in subparagraphs 2(a) and (i).
Scenario 3: Reaching an agreement, actual or in principle, on most or all of the material terms and conditions of the insurance coverage in the course of its negotiations in Canada (i.e., this Scenario contemplates that, in addition to 2(d), at least one additional activity referred to in 2(e) through (g) would apply).
5. OSFI considers that a foreign insurer is not insuring in Canada a risk where its business model encompasses no more than one of the activities referred to in paragraph 2."
The provinces and territories (except British Columbia and Quebec) require all foreign entities with branches registered in Canada to sign the following Consent and Undertaking:
"CONSENT AND UNDERTAKING
On January 1, 2010, amendments to Part XIII of the Insurance Companies Act (Canada) (the "Act") that affect the regulatory scope of the federal regime as it applies to foreign insurance companies will come into force.
To facilitate the conduct of insurance business across Canada, and avoid duplication of prudential regulation between jurisdictions, a foreign insurance company authorized under the Act to insure in Canada risks may, at its option, choose to enter into this Consent and Undertaking with the insurance regulators of the following provinces and territories:
Alberta, Saskatchewan, Manitoba, New Brunswick, Nova Scotia, Ontario, Prince Edward Island, Newfoundland and Labrador, Yukon Territory, the Northwest Territories and Territory of Nunavut (each, a "Province").
This Consent and Undertaking does not change any requirement under each Province's laws to obtain a licence, the requirement to hold a licence being governed by the laws of each particular Province.
ACCORDINGLY, THE INSURER UNDERTAKES AND AGREES THAT:
1. All risks insured by the Insurer as a result of any activity or activities that cause the Insurer to either carry on business under any Province's insurance legislation or transact insurance in any Province, shall be insured by the Insurer only in a manner that requires the Insurer to vest assets in trust in respect of those risks, pursuant to the Act.
2. The Insurer agrees to the above being added as a condition on its insurance licence issued by each Province, other than Ontario.
3. For the purposes of Ontario, the Insurer hereby acknowledges and agrees that the above is an undertaking within the meaning of paragraphs 447(2)(c) and 448(1)(b) of the Insurance Act (Ontario).
This Undertaking only applies to a Foreign Insurer with a branch registered in Canada under the Insurance Companies Act (Canada)."
1. Under what legislation are insurance companies required to be licensed?
Section 18 of the Insurance Act (Alberta) provides that:
"Except as provided for in this Act, no insurer may carry on business in Alberta unless the insurer holds a valid and subsisting licence.
(2) Except as provided for in this Act, no insurer may insure a risk in Alberta unless the insurer holds a valid and subsisting licence for a class of insurance that covers that risk.
(3) Except as provided for in this Act, no person may enter into or renew a contract of insurance to insure a risk in Alberta with an insurer unless
(a) the insurer holds a valid and subsisting licence, and
(b) the licence held by the insurer authorizes the insurer to undertake a class of insurance that covers the risk that is insured."
2. What activities carried on by an insurance company in Canada require a licence?
Section 17 of the Insurance Act (Alberta) defines what constitutes carrying on business in Alberta for the purpose of the Insurance Act (Alberta).
"An insurer undertaking a contract of insurance that is made in Alberta, whether the contract is original or renewed, except the renewal from time to time of life insurance policies, is, for the purposes of this Act, undertaking insurance in Alberta.
(2) An insurer is, for the purposes of this Act, carrying on business in Alberta if the insurer
(a) undertakes or offers to undertake insurance in Alberta,
(b) sets up or causes to be set up in Alberta any sign or inscription that contains the name of the insurer or that refers to insurance,
(c) carries on market conduct activities in Alberta,
(d) solicits or negotiates insurance in Alberta orally or in writing or by electronic media or any other medium of communication or by vending machines,
(e) issues or delivers any policy of insurance or interim receipt in Alberta,
(f) collects or receives or negotiates for or causes to be collected or received or negotiated for any premium for a contract of insurance in Alberta,
(g) inspects any risk in Alberta,
(h) adjusts any loss under a contract of insurance in Alberta,
(i) prosecutes or maintains in Alberta any action or proceeding in respect of a contract of insurance, or
(j) is listed in a telephone directory for any part of Alberta."
3. Which jurisdictions have legislation that deems insurance contracts to be made in their jurisdiction?
Section 514 of the Insurance Act (Alberta) defines when a contract of insurance is deemed to be made in Alberta:
"A contract of insurance is deemed to have been made in Alberta if
(a) it insures a person who is domiciled or resident in Alberta when the contract is made, or
(b) the subject matter of the contract is property that is or will be located in Alberta.
(2) This section has effect despite any agreement, condition or stipulation to the contrary."
4. What exceptions are there to the requirements for an insurance company to be licensed?
Section 61 of the Insurance Act (Alberta) provides that:
"(1) Despite section 18, an insurer that is not licensed may undertake insurance in Alberta with an insured if
Section 63 of the Insurance Act (Alberta) provides that:
(a) the insurance is effected without any solicitation whatsoever on the part of that insurer, and
(b) the insured, not later than 30 days after signing the contract of insurance or receiving any policy, interim receipt or insuring document issued by or on behalf of the insurer, whichever occurs first,
(2) If the charge referred to in subsection (1)(b)(ii) is not paid within 30 days from the time it becomes payable, a sum equal to 50% of the charge remaining unpaid becomes a penalty that forms a part of the charge and is recoverable with the charge.
(2.1) Despite subsection (1)(b)(ii), the Minister may reduce the charge to an amount not less than 10% of the premium paid or payable or premium notes given or to be given in connection with the insurance if the Minister is satisfied that the insurance was not available through a licensed insurer.
(3) Despite section 18, a person may enter into or renew a contract of insurance to insure a risk in Alberta with an unlicensed insurer if the requirements of subsection (1)(a) and (b) have been met.
(4) This section does not apply to a contract of insurance that may be evidenced by a motor vehicle liability policy." (i) notifies the Superintendent in writing under oath of the terms of the insurance, the insurer with whom the insurance is placed and the amount of premium paid or payable or premium notes given or to be given in connection with the insurance, and
(ii) at the same time pays to the Minister1 a charge equal to 50% of the premium paid or payable or premium notes given or to be given in connection with the insurance.
"(1) Despite section 18, an insurer that is not licensed may undertake insurance in Alberta with an insured if
1 The Minister of Finance (Alberta). (a) the insurance cannot be obtained from licensed insurers,
(b) the insurance is effected through a person who holds a valid and subsisting special broker’s licence (Agents & Brokers) for that class of insurance,
(c) before the insurance is undertaken the special broker obtains from the proposed insured a signed and dated document
(2) Despite section 18, a person may enter into or renew a contract of insurance to insure a risk in Alberta with an unlicensed insurer if, subject to subsection (2.1), the requirements of subsection (1)(a) to (d) have been met.
(2.1) Subsection (1)(c) and (d) do not apply if
(i) describing the nature and amount of the insurance required, and
(ii) stating that the insurance cannot be obtained from licensed insurers and specifying the licensed insurers who refused the proposed insured’s application,
and
d) before the insurance is undertaken the special broker discloses in writing to the proposed insured that the insurance will be placed with an unlicensed insurer.(a) the special broker is an affiliate of the insurance agent that places the insurance, and
(b) the insurance is placed outside Alberta.
(3) This section does not apply to a contract of insurance that may be evidenced by a motor vehicle liability policy."1. Under what legislation are insurance companies required to be licensed?
Section 59 of the Financial Institutions Act (British Columbia) provides that:
"(2) An insurance company must not carry on insurance business unless authorized to do so by a business authorization issued to it under this Division...
(4) A business authorization issued to an insurance company
(a) may be confined to
(i) general insurance business or life insurance business, or
(ii) one or more classes of insurance, or
(b) may authorize both general insurance business and life insurance business."2. What activities carried on by an insurance company in Canada require a licence?
Section 1(1)of the Financial Institutions Act (British Columbia) (the "Act") defines “insurance business” as follows:
""insurance business" means
(a) undertaking or offering to undertake to indemnify another person against loss or liability for loss in respect of a certain risk or peril to which the object of the insurance may be exposed,
(b) soliciting or accepting any risk,
(c) soliciting an application for a contract of insurance,
(d) issuing or delivering a
(i) receipt for any contract of insurance, or
(ii) contract of insurance,
(e) in consideration of any premium or payment, granting an annuity on a life or lives,
(f) collecting or receiving any premium for a contract of insurance,
(g) adjusting any loss covered by a contract of insurance, or
(h) advertising for any business described in paragraphs (a) to (g),
whether or not the person undertaking an activity or activities set out in paragraphs (a) to (h) can or does distribute any gain, profit or dividend, or otherwise disposes of the person's assets, to a member or shareholder of the person other than during winding up or on dissolution."3. Which jurisdictions have legislation that deems insurance contracts to be made in their jurisdiction?
Section 9 of the Insurance Act (British Columbia) provides that:
"A contract is deemed to have been made in British Columbia and must be construed accordingly if it
(a) insures a person domiciled or resident in British Columbia at the date of it, or
(b) has as its subject matter property or an interest in property located in British Columbia."
4. What exceptions are there to the requirements for an insurance company to be licensed?
Section 11 of the Insurer Exemption Regulation to the Financial Institutions Act (British Columbia) provides that:
"(1) In this section, "marine insurance" means marine insurance as defined in section 1(1) of Classes of the Insurance Regulation, but does not include "pleasure craft insurance" as defined in the Insurance Premium Tax Act.
(2) Parts 1 to 6 of the Act do not apply to an extra-provincial insurance corporation when
(l) the extra-provincial insurance corporation is engaged in an activity referred to in paragraph (a) of the definition of "insurance business" in section 1(1) of the Act and the activity is not conducted in British Columbia,
(m) the insurance referred to in paragraph (a) of the definition "insurance business" in section 1(1) of the Act, as it applies for the purposes of this section, is marine insurance, and
(n) the risk or peril to which the object of the marine insurance may be exposed is located in British Columbia."
"Marine insurance" is defined in section 1 of the Classes of Insurance to the Financial Institutions Act (British Columbia) as follows:
""marine insurance" means insurance against
(o) liability arising out of
Section 1(1) of the Insurance Premium Tax Act defines "pleasure craft" and "pleasure craft insurance" as follows:
(i) bodily injury to, or the death of, a person, or
(ii) the loss of, or damage to, property, or
(p) the loss of, or damage, to property,
occurring during a voyage or marine adventure, at sea or on an inland waterway, or during a delay or a transit, other than by water, that is incidental to a voyage or marine adventure, at sea or on an inland waterway".""pleasure craft" means a water craft for use for relaxation or sport whether or not it is chartered to another person for that use;
"pleasure craft insurance" includes
(q) personal property insurance in respect of pleasure craft, and
(r) insurance against liability arising out of
Section 76 of the Financial Institutions Act (British Columbia) provides that:
(i) bodily injury to or the death of a person, or
(ii) loss of or damage to property
caused by a pleasure craft or the use or operation of it.""Exceptions
(1) Despite section 75,
(a) any person may require insurance to be placed by a borrower as security for a loan,
(b) any person may
Section 9 of the Insurer Exemption Regulation to the Financial Institutions Act (British Columbia) provides that:
(i) adjust a loss,
(ii) prosecute or maintain a writ, action or proceeding, or
(iii) perform an obligation
under or arising out of a contract of insurance that was made or issued in British Columbia at a time when the person was authorized to carry on insurance business,
(c) an insurance agent licensed under Division 2 of Part 6 who is authorized by the resident to effect the contract of insurance may negotiate or procure a contract of insurance between a resident of British Columbia and an insurer prohibited by section 75 from carrying on business in British Columbia, subject to the requirements or conditions, if any, imposed by regulation,
(d) an insurer referred to in paragraph (c) may, without a business authorization, enter into a contract of insurance in the circumstances set out in that paragraph, and
(e) a person or insurer is exempted from the requirement to have a business authorization to carry on insurance business when permitted by the regulations.
(2) An insurance agent licensed under Division 2 of Part 6 who, under subsection (1) (c), procures or negotiates a contract of insurance must keep a record showing the particulars of the contract and at the request of the Commissioner of Income Tax or of the commission, must provide the record to the Commissioner of Income Tax or commission as requested.
(3) If
(a) the sum imposed by way of tax under section 4 of the Insurance Premium Tax Act in respect of an insurance contract lawfully made under subsection (1) (c) has been paid,
(b) the insurer described in subsection (1) (c) has notified the commission that it proposes to make an inspection for the purpose of the insurance contract or to adjust or appraise a loss under the contract, and
(c) the commission has given written approval to the proposed activity by the insurer,
the insurer may make the inspection or adjust and appraise the loss.""It is a condition of section 76(1)(c) of the Act that the insurance agent referred to in that section
(a) does not directly or indirectly solicit the resident for the contract of insurance, and
(b) files with the superintendent, within 30 days of the end of each quarter, the following information with respect to the contracts of insurance referred to in that section that are entered into by the agent:
The Financial Institutions Commission of British Columbia ("FICOM") has issued an Information Bulletin on the Placement of Risks with Unauthorized Insurers which states that:
(i) the names of the insureds;
(ii) the particulars of the insurance;
(iii) the names of the insurers;
(iv) the amount of insurance placed with each insurer referred to in subparagraph (iii) and the rate and the amount of premiums paid."
"Unauthorized insurers are not permitted to inspect, appraise or adjust any loss on an insurance contract in this province unless:
The Bulletin also states that:
• The contract was placed in accordance with section 76;
• The premium tax has been paid [Note: the premium tax is 7 % of the premium and applies whether the B.C resident purchases the insurance or a non-resident purchases the insurance on behalf of a B.C resident]; and
• The unauthorized insurer has sought and received written consent from the Superintendent to adjust, inspect or appraise the loss.
In seeking the consent of the Superintendent, the unauthorized insurer should be aware that the Superintendent will typically require that the insurer:
• Provide an undertaking to the Superintendent that it will appear in court in the province with respect to the claim;
• Agree to honour any order imposed by the court system;
• Appoint an attorney in the province to accept service; and
• Use an adjuster that is appropriately licensed with the Insurance Council of British Columbia to appraise, inspect or adjust the claim."
The Superintendent may also require the insurer to establish sufficient assets in Canada for settlement of the claim. (It should be noted that agent licensee's who place risks with unauthorized insurers should not be holding back premiums to use to settle any claim on the policy. Nor should they be adjusting or otherwise assisting in the determination of the amount of any loss on a policy placed with an unauthorized insurer as this would constitute unauthorized insurance business on the part of the agent.)" "Section 76 is only intended to cover situations where:
and that:
• A client has on their own pre-selected an unauthorized insurer and subsequently approaches an agent licensee and specifically requests assistance in placing the risk with that insurer; or
• The client of their own accord and initiative and without having been solicited by the agent specifically directs a licensee to seek placement of the clients risk with an unauthorized insurer."
"Agent licensees are not permitted to establish an ongoing business relationship with an unauthorized insurer, either directly, or through other agents to place risks with the insurer on an on going basis, including entering into any formal or tacit agreement for the placement of risks. Placement of risk under section 76 is expected to be on a "one-off" basis. Agent licensees are expected to do due diligence on the unauthorized insurer at the time of placement of the risk before approaching that insurer to determine if the insurer would be willing to accept the risk. As well, the agent licensee has a duty to advise the client as to the appropriateness of the insurance. Once the business is placed, the unauthorized insurer cannot hold out to either the agent licensee or the client that it is willing to renew the risk and the agent licensee cannot renew the risk with the unauthorized insurer without first determining that they are unable to place it in the authorized market and without being directed to do so (unsolicited) by the client."
Section 4 of the Insurance Premium Tax Act (British Columbia) provides that:
"A taxpayer other than a taxable insurer must pay to the minister a tax equal to 7% of the BC premium paid or payable, or premium note given, or mutual or other liability assumed, under an insurance contract referred to in paragraph (b) or (b.1) of the definition of "taxpayer"".
Section 1 of the Insurance Premium Tax Act (British Columbia) provides that:
""taxpayer" means
(a) a taxable insurer,
(b) a person resident in British Columbia who enters into an insurance contract with an insurer other than a taxable insurer,
FICOM has issued an Information Bulletin on Insuring Risks in British Columbia – Amendments to the Financial Institutions Act which states that:
(b.1) a person resident in British Columbia in respect of whom or in respect of whose risk, including, without limitation, risk related to the person's property, employees, directors or officers, a person not resident in British Columbia enters into an insurance contract with an insurer other than a taxable insurer, if
(c) a trustee in bankruptcy, assignee, liquidator, receiver, administrator or similar person administering, managing, winding up or otherwise dealing with the property or business of a taxable insurer."(i) the contract is entered into with the consent of the person resident in British Columbia,
(ii) the person resident in British Columbia contributes to the payment of premiums under the contract, or reimburses the person who entered into the contract for the payment of those premiums, or
(iii) the person resident in British Columbia and the person who enters into the contract are related persons within the meaning of section 251 of the Income Tax Act (Canada), or
"… it is FICOM’s interpretation that these new rules do not apply in the following two situations:
• Group life insurance policies and group employee benefit plans that provide coverage to group insured’s provided that:
• The policy is solicited, negotiated, written and issued outside the province with all of the related insurance activity also occurring outside of British Columbia;
• The group policyholder is not a resident of, or ordinarily resident in, British Columbia;
• The only connection the contract has to British Columbia is that it incidentally covers a few employees or other group insured’s that would normally be considered to be residents of British Columbia as part of a larger group; and
• The coverage provided under the policy is compulsory, there is no optional coverage provided to the British Columbia insured.
• Property and casualty insurance policies that provide global coverage of risks or perils, including those located in British Columbia as long as:
• The policy is solicited, negotiated, written and issued outside of Canada with all of the related insurance activity also occurring outside of British Columbia;
• The policy is arranged for a non-Canadian business interest, group or parent corporation; and
• The only connection the policy has to British Columbia is that it covers a risk or peril located in British Columbia solely incide
1. Under what legislation are insurance companies required to be licensed?
Section 24 of The Insurance Act (Manitoba) provides that:
"(1) An insurer that carries on business in Manitoba must obtain from the superintendent and hold a licence under this Act.
Prohibition of unlicensed insurance
(2) An insurer that carries on business in Manitoba without having obtained a licence as required by this section, is guilty of an offence.
Prohibition against person acting on behalf of unlicensed insurer
(3) A person is guilty of an offence if the person
(a) does or causes to be done in Manitoba any act or thing mentioned in section 22 on behalf of or as the agent of an insurer that is not licensed under this Act; or
(b) directly or indirectly receives any remuneration for doing anything mentioned in clause (a)."
2. What activities carried on by an insurance company in Canada require a licence?
Section 22 of The Insurance Act (Manitoba) defines what constitutes carrying on business for purposes of The Insurance Act (Manitoba).
"(1) Any insurer undertaking a contract of insurance that, under this Act, is deemed to be made in Manitoba, whether the contract is original or a renewal - except the renewal from time to time of life insurance policies, - is deemed to be undertaking insurance in Manitoba for the purposes of this Act.
(2) An insurer is carrying on business in Manitoba for the purposes of this Act if the insurer
(a) undertakes or offers to undertake insurance in Manitoba;
(b) sets up or causes to be set up within in Manitoba any sign containing the name of the insurer;
(c) maintains or operates within in Manitoba either in its own name, or in the name of an agent or other representative, an office for the transaction of an insurance business whether that business is within Manitoba or outside it;
(d) distributes or publishes in Manitoba, or causes to be distributed or published in Manitoba, any proposal, circular, card advertisement, printed form, or similar document;
(e) inserts, prints, or publishes, its name, or permits or causes its name to be inserted, imprinted, or published, in any telephone directory or in any other directory or list of names, with or without addresses, of the residents or occupants of premises in any municipality, locality, area, or district in Manitoba, or in a building in Manitoba;
(f) makes or causes to be made in Manitoba a written or oral solicitation for insurance;
(g) issues or delivers in Manitoba a policy of insurance or interim receipt;
(h) collects or receives in Manitoba, or negotiates in Manitoba for, a premium for a contract of insurance, or causes any of those acts to be done;
(i) inspects a risk in Manitoba or adjusts a loss in Manitoba under a contract of insurance;
(j) prosecutes or in Manitoba an action or proceeding in respect of a contract of insurance;
(k) represents or holds itself out in Manitoba to the public as being engaged in the insurance business; or
(l) has in force contracts of insurance on property situated in Manitoba, or insuring persons resident in Manitoba."
3. Which jurisdictions have legislation that deems insurance contracts to be made in their jurisdiction?
Subsection 116(1) of The Insurance Act (Manitoba) provides that:
"(1) A contract is deemed to have been made in Manitoba if
(a) it insures an insurable interest of a person who is resident in Manitoba; or
(b) its subject matter is property that is located in Manitoba.
(2) A contract that is deemed to have been made in Manitoba must be interpreted according to the laws of Manitoba."
4. What exceptions are there to the requirements for an insurance company to be licensed?
Section 382 of The Insurance Act (Manitoba) provides that:
"(1) Subject to subsection (2), a special insurance broker may assist or act on behalf of a person who wishes to enter into or renew an insurance contract with an unlicensed insurer if
(d) sufficient insurance cannot be arranged at reasonable rates with an insurer licensed under this Act; or
(e) sufficient insurance cannot be arranged on the terms stipulated by the person with an insurer licensed under this Act.
(2) Before the person enters into or renews the insurance contract, the special insurance broker shall obtain from the person a written statement that
(a) is dated and signed by the person;
(b) describes the nature and amount of the insurance the person requires;
(c) states that the person understands that
(3) Within 10 days after the person enters into or renews the insurance contract, the special insurance broker shall file with the superintendent a statement setting out
(i) the unlicensed insurer is not regulated under this Act,
(ii) the superintendent has no authority under this Act with respect to the unlicensed insurer,
(iii) the orderly payment of claims may be more difficult than it would be if the person obtained insurance from an insurer licensed under this Act, and
(iv) the person will not have the protection of any compensation plan operated by a compensation association designated in the regulations; and
(d) contains any further information that the superintendent may require. (a) the insured's name;
(b) the subject matter of the insurance;
(c) the name of each unlicensed insurer;
(d) the amount of insurance arranged with each; and
(e) the rate and amount of premium paid to each.
(4) A special insurance broker shall keep separate records, in the form required by the superintendent, about insurance the special insurance broker arranges with unlicensed insurers.
(5) The superintendent or a person authorized by the superintendent may, at any reasonable time, inspect the records required by subsection (4).
(6) Within 10 days after the end of each month, a special insurance broker shall file with the superintendent a return
(a) verified in the manner required by the superintendent;
(b) in the form required by the superintendent; and
(c) setting out the particulars of insurance the special insurance broker has arranged with unlicensed insurers during the month."
1. Under what legislation are insurance companies required to be licensed?
Section 6 of the Insurance Companies Act (Newfoundland and Labrador) provides that:
"(1) An insurer undertaking insurance in the province or carrying on business in the province shall obtain from the superintendent and hold a licence.
(2) An insurer undertaking insurance in the province or carrying on business in the province without first having obtained a licence is guilty of an offence.
(3) A person who within the province does or causes to be done an act or thing mentioned in subsection 4(2) on behalf of or as an agent of an insurer which is not licensed or who receives directly or indirectly remuneration for so doing is guilty of an offence."
2. What activities carried on by an insurance company in Canada require a licence?
Section 4 of the Insurance Companies Act (Newfoundland and Labrador), (the "Act") defines what constitutes carrying on business for the purposes of the Act.
"(1) An insurer undertaking a contract which, under this Act, is considered to be made in the province, whether the contract is original or a renewal, except the renewal of life insurance policies, is for the purpose of this Act considered to be undertaking insurance in the province.
(2) An insurer which, within the province,
(a) undertakes or offers to undertake insurance;
(b) sets up or causes to be set up a sign containing the name of the insurer;
(c) maintains or operates either in its own name or in the name of an agent or other representative an office for the transaction of the business of insurance within or outside the province;
(d) distributes or publishes or has distributed or published a proposal, circular, card, advertisement, printed form or like document;
(e) inserts, prints or publishes its name or permits or causes its name to be inserted, printed or published in a telephone directory or in another directory or list of the names, with or without addresses, of the residents or occupants of premises in a city, municipality, locality, area or district or in a building;
(f) makes or has made a written or oral solicitation for insurance;
(g) issues or delivers a policy of insurance or interim receipt, collects, receives or negotiates for or causes to be collected, received or negotiated for, a premium or part of a premium for a contract;
(h) prosecutes or maintains an action or proceeding in respect of a contract; or
(i) represents or holds itself out to the public as being engaged in the insurance business
is for the purposes of this Act considered to be an insurer carrying on business in the province."
3. Which jurisdictions have legislation that deems insurance contracts to be made in their jurisdiction?
Section 4 of the Insurance Contracts Act (Newfoundland and Labrador) provides that:
"Where the subject-matter of a contract is property in the province or an insurable interest of a person resident in the province, the contract, where signed, countersigned, issued or delivered in the province or committed to the post office or to a carrier, messenger or agent to be delivered or handed over to the insured, his or her assign or agent in the province, shall be considered to evidence a contract made in the province and shall be construed according to the laws of the province and all money payable under the contract shall be paid in lawful money of Canada and, where the person entitled to the money so requires, in the province."
4. What exceptions are there to the requirements for an insurance company to be licensed?
Section 25 of the Insurance Adjusters, Agents and Brokers Act (Newfoundland) provides that:
"(1) An agent, broker or representative is liable to the insured on all contracts of insurance unlawfully made through the agent, broker or representative directly or indirectly with an insurer not licensed to undertake insurance in the province in the same manner as if that agent, broker or representative were the insurer.
(2) A corporation or partnership shall not place a contract with an unlicensed insurer unless that corporation or partnership has obtained a licence under section 24 and complies with subsection (4). (Click here to access our Agents & Brokers Module)
(3) Where sufficient insurance in respect of a matter or thing in the province cannot be obtained from insurers licensed in the province, a corporation or partnership licensed under section 24 may effect insurance with an unlicensed insurer where that corporation or partnership complies with subsection (4).
(4) Where sufficient insurance cannot be obtained from an insurer licensed in the province, the agent, broker or representative shall obtain from the insured an executed and dated declaration including:
(a) a full description of the nature of the insurance;
(b) the amount of insurance required;
(c) a statement that the insurance cannot be obtained from licensed insurers; and
(d) a statement that application for the insurance was previously made to and refused by named insurers licensed in the province."
1. Under what legislation are insurance companies required to be licensed?
Section 21 of the Insurance Act (New Brunswick) provides that:
"(1) Every insurer carrying on business in the Province shall obtain from the Superintendent and hold a licence under the provisions of this Act.
(2) Every insurer carrying on business in the Province without having obtained a licence, as required by this section, is guilty of an offence."
2. What activities carried on by an insurance company in Canada require a licence?
Section 20 of the Insurance Act (New Brunswick), (the "Act") define what constitutes carrying on business in New Brunswick within the meaning of the Act.
"(1) Any insurer undertaking a contract of insurance that under the provisions of this Act is deemed to be made in the Province, whether the contract is original or a renewal, except the renewal from time to time of life insurance policies, shall be deemed to be undertaking insurance in the Province within the meaning of this Part.
(2) Any insurer that within the Province
(a) undertakes or offers to undertake insurance;
(b) sets up or causes to be set up any sign containing the name of the insurer; or
(c) maintains or operates either in its own name or in the name of an agent or other representative, any office for the transaction of the business of insurance either within or without the Province; or
(d) distributes or publishes or causes to be distributed or published any proposal, circular, card, advertisement, printed form or like document; or
(e) makes or causes to be made any written or oral solicitation for insurance; or
(f) issues or delivers any policy of insurance or interim receipt or collects or receives or negotiates for or causes to be collected or received or negotiated for any premium for a contract of insurance or inspects any risk or adjusts any loss under a contract of insurance; or
(g) prosecutes or maintains any action or proceeding in respect of a contract of insurance;
shall be deemed to be an insurer carrying on business in the Province within the meaning of this Act."
3. Which jurisdictions have legislation that deems insurance contracts to be made in their jurisdiction?
Section 97 of the Insurance Act (New Brunswick) provides that:
"Where the subject matter of a contract of insurance is property in the Province, or an insurable interest of a person resident within the Province, the contract, if signed, countersigned, issued or delivered in the Province or committed to the post office or to any person to be delivered to the insured, his assign or agent in the Province, shall be deemed to evidence a contract made therein, and be construed according to the law thereof, and all money payable thereunder shall be paid at the head office or chief agency of the insurer in the Province, in lawful money in Canada."
4. What exceptions are there to the requirements for an insurance company to be licensed?
Sections 83 and 84 of the Insurance Act (New Brunswick) provide that:
“83 No person shall knowingly insure or cause to be insured, except through a special insurance broker duly licensed (See Agents & Brokers), any property situate in, or described in any contract as situate in, any part of the Province, against fire loss with an insurer not licensed under the provisions of this Act, and any person who knowingly violates the provisions of this section is guilty of an offence.
84 Notwithstanding anything in this Act any person may insure property situated in the Province against fire or marine risks with an unlicensed insurer, if such insurance is effected outside the Province and without any solicitation whatsoever directly or indirectly on the part of the insurer."
Section 355 of the Insurance Act (New Brunswick) provides that:
"(1) Where sufficient insurance on property in the Province at reasonable rates of insurance in the form required by the insured cannot be obtained by the insured from insurers licensed to do business in the Province, a special insurance broker, duly licensed, (See Agents & Brokers) may effect insurance with unlicensed insurers, but shall in the case of every contract so effected obtain from the insured a signed and dated statement describing the property insured, its location and the amount of insurance required, and stating that the insurance cannot be obtained in licensed companies at reasonable rates and that the application for such insurance at the stated rate of premium was previously made to and refused by named companies licensed in the Province.
(2) Every such broker shall keep a separate account of insurance effected by him under his licence in books in the form prescribed by the Superintendent and shall make those books available for inspection by the Superintendent or any of his officers.
(3) Within ten days after the end of each month every such broker shall make to the Superintendent a return under oath, in the form and manner by him prescribed, containing particulars of all insurance effected by him under this section during such month.
(4) In respect of all premiums on insurance effected under a special broker’s licence, the licensee shall pay to the Province such taxes as would be payable if such premiums had been received by a licensed insurer, and payment therefor shall accompany the monthly return provided for in subsection (3).
356 On it being shown to the satisfaction of the Superintendent that all insurances effected by a licensed special insurance broker are no longer in force or have been reinsured, and that the taxes owing to the Province have been paid, the broker is entitled to a release or cancellation of his security."
1. Under what legislation are insurance companies required to be licensed?
Section 3 of the Insurance Act (Northwest Territories) provides that:
"(1) Every insurer undertaking insurance in the Northwest Territories or carrying on business in the Territories shall obtain from the Superintendent and hold a licence under this Act.
(2) Every insurer undertaking insurance or carrying on business in the Northwest Territories without having obtained a licence as required by this section is guilty of an offence.
(3) Every person who in the Northwest Territories does or causes to be done any act or thing mentioned in subsection 2(3) or (4) on behalf of or as agent of an insurer not licensed under this Act or who receives directly or indirectly any remuneration for so doing is guilty of an offence…"
2. What activities carried on by an insurance company in Canada require a licence?
Section 2 of the Insurance Act (Northwest Territories) defines what constitutes carrying on business in the Northwest Territories within the meaning of the Insurance Act (Northwest Territories).
"(1) This Part applies to insurance undertaken in the Northwest Territories and to all insurers carrying on business in the Territories.
(2) An insurer undertaking a contract that under this Act is deemed to be made in the Northwest Territories, whether the contract is original or renewed, except the renewal from time to time of life insurance policies, shall be deemed to be undertaking insurance in the Territories within the meaning of this Part.
(3) An insurer undertaking insurance in the Northwest Territories or that in the Territories,
(a) displays or causes to be displayed a sign containing the name of an insurer;
(b) maintains or operates, either in its own name or in the name of its agent or other representative, an office for the transaction of the business of insurance either in or outside the Territories;
(c) distributes or publishes or causes to be distributed or published any proposal, circular, card, advertisement, printed form or similar documents;
(d) makes or causes to be made any written or oral solicitation for insurance;
(e) issues or delivers any policy of insurance or interim receipt or collects or receives or negotiates for or causes to be collected or received or negotiated for any premium for a contract of insurance or inspects any risk or adjusts any loss under a contract of insurance, otherwise than through a licensed broker pursuant to sections 223 and 224; or
(f) prosecutes or maintains in the Territories an action or proceeding in respect of a contract of insurance,
shall be deemed to be an insurer carrying on business in the Territories within the meaning of this Act."
3. Which jurisdictions have legislation that deems insurance contracts to be made in their jurisdiction?
Section 40 of the Insurance Act (Northwest Territories) provides that:
"Where the subject -matter of a contract of insurance is property in the Northwest Territories or an insurable interest of a person resident in the Territories, the contract of insurance, if signed, countersigned, issued or delivered in the Territories or committed to the post office or to any carrier, messenger or agent to be delivered or handed over to the insured, his or her assign or agent in the Territories shall be deemed to evidence a contract made in the Territories, and the contract shall be construed according to the law of the Territories, and all moneys payable under the contract shall be paid at the office of the chief officer or agent in the Territories of the insurer in lawful money of Canada."
4. What exceptions are there to the requirements for an insurance company to be licensed?
Section 31 of the Insurance Act (Northwest Territories) provides that:
"Notwithstanding anything in this Act, any person may insure property situated in the Northwest Territories against fire with an unlicensed insurer, and any property insured or to be insured under this section may be inspected and any loss incurred in respect of that property adjusted, if that insurance is effected outside the Territories and without any solicitation directly or indirectly on the part of the insurer."
Section 224 of the Insurance Act (Northwest Territories) provides that:
"(1) If sufficient insurance in respect of any matter or thing in the Northwest Territories cannot be obtained from insurers licensed to do business in the Territories, any licensed broker may place insurance with unlicensed insurers.
(2) Before placing insurance with an unlicensed insurer, a broker shall obtain from the insured a signed and dated statement
(a) describing fully the nature of the insurance and the amount of insurance required;
(b) stating that the insurance cannot be obtained from licensed insurers; and
(c) stating that application for the insurance was previously made to and refused by named insurers licensed in the Northwest Territories.
(3) A broker shall, within 10 days after the placing of the insurance with an unlicensed insurer, submit to the Superintendent
(a) a statement setting out
(i) the name of the insured,
(ii) the nature of the insurance,
(iii) the full names of the unlicensed insurers, and
(iv) the amount of insurance placed with each and the rate and amount of premium paid to each; and
(b) the statement referred to in subsection (2).
(4) A broker shall keep a separate account of insurance placed by the broker under his or her licence and keep the accounts open to inspection by the Superintendent or any person authorized by the Superintendent.
(5) Within 10 days after the end of each month, a broker shall make a return under oath to the Superintendent in the form and manner required by the Superintendent, containing particulars of all insurance placed under subsection (1) by the broker during the month.
(6) In respect of all premiums on insurance placed under subsection (1), a broker shall pay to the Superintendent, at the time of making a monthly return, the taxes that would be payable if the premiums had been received by a licensed insurer.
(7) On it being shown to the satisfaction of the Superintendent that all insurance placed under subsection (1) by a broker is no longer in force or has been reinsured, the broker is entitled to a release or cancellation of his or her security.
(8) Every broker who contravenes this section forfeits his or her licence and is guilty of an offence."1. Under what legislation are insurance companies required to be licensed?
Section 6 of the Insurance Act (Nova Scotia) provides that:
"(1) Notwithstanding any other enactment, no person shall carry on the business of insurance in the Province without a license, issued pursuant to this Section, that is in force.
(2) Every insurer carrying on the business of insurance in the Province who does not hold a license that is in force is guilty of an offence.
(3) The Superintendent may issue a license to an insurer subject to such limitations and conditions as the Superintendent may prescribe.
(4) The Superintendent may suspend or revoke a license of an insurer issued pursuant to this Section for misconduct by the insurer or a violation by the insurer of any provision of this Act, the regulations or any federal or provincial enactment applicable to the insurer."
2. What activities carried on by an insurance company in Canada require a licence?
Section 3(e) of the Insurance Act (Nova Scotia) provides that:
"“business of insurance” means the business of insurance within the meaning of the Insurance Companies Act (Canada)"
3. Which jurisdictions have legislation that deems insurance contracts to be made in their jurisdiction?
N/A
4. What exceptions are there to the requirements for an insurance company to be licensed?
N/A
1. Under what legislation are insurance companies required to be licensed?
Section 3 of the Insurance Act (Nunavut) provides that:
"(1) Every insurer undertaking insurance in Nunavut or carrying on business in Nunavut shall obtain from the Superintendent and hold a licence under this Act.
(2) Every insurer undertaking insurance or carrying on business in Nunavut without having obtained a licence as required by this section is guilty of an offence.
(3) Every person who in Nunavut does or causes to be done any act or thing mentioned in subsection 2(3) or (4) on behalf of or as agent of an insurer not licensed under this Act or who receives directly or indirectly any remuneration for so doing is guilty of an offence…"
2. What activities carried on by an insurance company in Canada require a licence?
Section 2 of the Insurance Act (Nunavut) defines what constitutes carrying on business in Nunavut within the meaning of the Insurance Act (Nunavut).
"(1) This Part applies to insurance undertaken in Nunavut and to all insurers carrying on business in Nunavut.
(2) An insurer undertaking a contract that under this Act is deemed to be made in Nunavut, whether the contract is original or renewed, except the renewal from time to time of life insurance policies, shall be deemed to be undertaking insurance in Nunavut within the meaning of this Part.
(3) An insurer undertaking insurance in Nunavut or that in Nunavut,
(a) displays or causes to be displayed a sign containing the name of an insurer;
(b) maintains or operates, either in its own name or in the name of its agent or other representative, an office for the transaction of the business of insurance either in or outside Nunavut;
(c) distributes or publishes or causes to be distributed or published any proposal, circular, card, advertisement, printed form or similar documents;
(d) makes or causes to be made any written or oral solicitation for insurance;
(e) issues or delivers any policy of insurance or interim receipt or collects or receives or negotiates for or causes to be collected or received or negotiated for any premium for a contract of insurance under a contract of insurance, otherwise than through a licensed broker pursuant to sections 223 and 224; or
(f) prosecutes or maintains in Nunavut an action or proceeding in respect of a contract of insurance,
shall be deemed to be an insurer carrying on business in Nunavut within the meaning of this Act."
3. Which jurisdictions have legislation that deems insurance contracts to be made in their jurisdiction?
Section 40 of the Insurance Act (Nunavut) provides that:
"Where the subject-matter of a contract of insurance is property in Nunavut or an insurable interest of a person resident in Nunavut, the contract of insurance, if signed, countersigned, issued or delivered in Nunavut or committed to the post office or to any carrier, messenger or agent to be delivered or handed over to the insured, his or her assign or agent in Nunavut shall be deemed to evidence a contract made in Nunavut, and the contract shall be construed according to the law of Nunavut, and all moneys payable under the contract shall be paid at the office of the chief officer or agent in Nunavut of the insurer in lawful money of Canada.
4. What exceptions are there to the requirements for an insurance company to be licensed?
Section 31 of the Insurance Act (Nunavut) provides that:
"Despite anything in this Act, any person may insure property situated in Nunavut against fire with an unlicensed insurer, and any property insured or to be insured under this section may be inspected and any loss incurred in respect of that property adjusted, if that insurance is effected outside Nunavut and without any solicitation directly or indirectly on the part of the insurer."
Section 224 of the Insurance Act (Nunavut) provides that:
"(1) If sufficient insurance in respect of any matter or thing in Nunavut cannot be obtained from insurers licensed to do business in Nunavut, any licensed broker may place insurance with unlicensed insurers.
Statement of insured
(2) Before placing insurance with an unlicensed insurer, a broker shall obtain from the insured a signed and dated statement
(a) describing fully the nature of the insurance and the amount of insurance required;
(b) stating that the insurance cannot be obtained from licensed insurers; and
(c) stating that application for the insurance was previously made to and refused by named insurers licensed in Nunavut.
(3) A broker shall, within 10 days after the placing of the insurance with an unlicensed insurer, submit to the Superintendent
(a) a statement setting out
(i) the name of the insured,
(ii) the nature of the insurance,
(iii) the full names of the unlicensed insurers, and
(iv) the amount of insurance placed with each and the rate and
(v) amount of premium paid to each; and
(b) the statement referred to in subsection (2).
(4) A broker shall keep a separate account of insurance placed by the broker under his or her licence and keep the accounts open to inspection by the Superintendent or any person authorized by the Superintendent.
(5) Within 10 days after the end of each month, a broker shall make a return under oath to the Superintendent in the form and manner required by the Superintendent, containing particulars of all insurance placed under subsection (1) by the broker during the month.
(6) In respect of all premiums on insurance placed under subsection (1), a broker shall pay to the Superintendent, at the time of making a monthly return, the taxes that would be payable if the premiums had been received by a licensed insurer.
(7) On it being shown to the satisfaction of the Superintendent that all insurance placed under subsection (1) by a broker is no longer in force or has been reinsured, the broker is entitled to a release or cancellation of his or her security.
Forfeiture of licence
(8) Every broker who contravenes this section forfeits his or her licence and is guilty of an offence."1. Under what legislation are insurance companies required to be licensed?
Section 40 of the Insurance Act (Ontario) provides that:
"(1) Every insurer undertaking insurance in Ontario or carrying on business in Ontario shall obtain from the Superintendent and hold a licence under this Act.
(2) No person shall carry on business as an insurer or engage in an act constituting the business of insurance in Ontario without a licence under this Act."
2. What activities carried on by an insurance company in Canada require a licence?
Section 39 of the Insurance Act (Ontario) defines what constitutes carrying on business in Ontario within the meaning of the Insurance Act (Ontario).
"(1) This Part applies to insurance undertaken in Ontario and to all insurers carrying on business in Ontario.
(2) An insurer undertaking a contract of insurance that under this Act is deemed to be made in Ontario, whether the contract is original or renewed, except the renewal from time to time of life insurance policies, shall be deemed to be undertaking insurance in Ontario within the meaning of this Part.
(3) An insurer undertaking insurance in Ontario or that in Ontario sets up or causes to be set up a sign containing the name of an insurer, or that in Ontario maintains or operates, either in its own name or in the name of its agent or other representative, an office for the transaction of the business of insurance either in or out of Ontario, or that in Ontario distributes or publishes or causes to be distributed or published any proposal, circular, card, advertisement, printed form or like document, or that in Ontario makes or causes to be made any written or oral solicitation for insurance, or that in Ontario issues or delivers any policy of insurance or interim receipt or collects or receives or negotiates for or causes to be collected or received or negotiated for any premium for a contract of insurance or inspects any risk or adjusts any loss under a contract of insurance, or that prosecutes or maintains in Ontario an action or proceeding in respect of a contract of insurance, or a club, society or association incorporated or unincorporated that receives, either as trustees or otherwise, contributions or money from its members out of which gratuities or benefits are paid directly or indirectly upon the death of its members, or any of them, shall be deemed to be an insurer carrying on business in Ontario within the meaning of this Act."
3. Which jurisdictions have legislation that deems insurance contracts to be made in their jurisdiction?
Section 123 of the Insurance Act (Ontario) provides that:
"Where the subject-matter of a contract of insurance is property in Ontario or an insurable interest of a person resident in Ontario, the contract of insurance, if signed, countersigned, issued or delivered in Ontario or committed to the post office or to any carrier, messenger or agent to be delivered or handed over to the insured or the insured’s assign or agent in Ontario shall be deemed to evidence a contract made therein, and the contract shall be construed according to the law thereof, and all money payable under the contract shall be paid at the office of the chief officer or agent in Ontario of the insurer in lawful money of Canada."
4. What exceptions are there to the requirements for an insurance company to be licensed?
Section 113 of the Insurance Act (Ontario) provides that:
"Despite anything in this Act, any person may insure property situated in Ontario against fire with an unlicensed insurer, and any property insured or to be insured under this section may be inspected and any loss incurred in respect thereof adjusted, if such insurance is effected outside Ontario and without any solicitation whatsoever directly or indirectly on the part of the insurer."
Section 10 of the General Regulation to the Registered Insurance Brokers Act (Ontario) provides that:
"(1) A member shall not act or assist in the placing of insurance with an unlicensed insurer unless,
(a) the member has informed the member of the public for whom the member acts of the following risks of entering into a contract of insurance with an insurer not licensed under the Insurance Act:
1. That the insurer is not subject to regulation under the Insurance Act.
2. Orderly payment of claims may be more difficult than with an insurer licensed under the Insurance Act.
3. The Superintendent has not authority under the Insurance Act in respect of the insurer.
4. Provincial and federal taxes payable;
(b) the member has obtained the written consent of the member of the public for whom the members acts; and
(c) sufficient insurance cannot be obtained at reasonable rates or on the form of contract required by the member of the public from insurers licensed under the Insurance Act.
(2) A member shall not act or assist in the placement of automobile insurance with an unlicensed insurer except automobile insurance in excess of the minimum liability coverage required by the Insurance Act.
(3) A member who places insurance with an unlicensed insurer shall, within thirty days after the last day of March, June, September and December of each year,
(a) file with the Superintendent a return under oath or affirmation in the form and manner required by the Superintendent, containing particulars of all insurance effected under this section by the member during the period covered by the return; and
(b) at the same time, in respect of all premiums on such insurance, pay to the Minister of Finance the premium taxes that would be payable if such premiums had been received by a licensed insurer."1. Under what legislation are insurance companies required to be licensed?
Section 22 of the Insurance Act (Prince Edward Island) provides that:
"(1) Every insurer carrying on business in the province shall obtain from the Superintendent and hold a license under this Act.
(2) Every insurer carrying on business in the province without having obtained a license as required by this section is guilty of an offence.
(3) Any person who, within the province, does or causes to be done any act or thing mentioned in section 20 on behalf of, or as agent of, an insurer not licensed under this Act, or who receives, directly or indirectly, any remuneration for so doing, is guilty of an offence…"
2. What activities carried on by an insurance company in Canada require a licence?
Section 20 of the Insurance Act (Prince Edward Island) defines what constitutes carrying on business in Prince Edward Island within the meaning of the Insurance Act (Prince Edward Island).
"(1) Any insurer undertaking a contract of insurance which, under this Act, is deemed to be made in the province, whether the contract is original or a renewal, except the renewal of life insurance policies, is deemed to be undertaking insurance in the province within the meaning of this Part.
(2) Any insurer that within the province,
(a) undertakes or offers to undertake insurance;
(b) sets up or causes to be set up any sign containing the name of the insurer;
(c) maintains or operates either in its own name or in the name of an agent or other representative, any office for the transaction of the business of insurance either within or outside the province;
(d) distributes or publishes or causes to be distributed or published any proposal, circular, card, advertisement, printed form, or a like document;
(e) makes or causes to be made any written or oral solicitation for insurance;
(f) issues or delivers any policy of insurance of interim receipt or collects or receives or negotiates for or causes to be collected or received or negotiated for any premium for a contract of insurance or inspects any risk or adjusts any loss under a contract of insurance; or
(g) prosecutes or maintains any action or proceeding in respect of a contract of insurance,
is deemed to be an insurer carrying on business in the province within the meaning of this Act."
3. Which jurisdictions have legislation that deems insurance contracts to be made in their jurisdiction?
Section 86 of the Insurance Act (Prince Edward Island) provides that:
"Where the subject matter of a contract of insurance is property in the province, or an insurable interest of a person resident within the province, the contract, if signed, countersigned, issued or delivered in the province or committed to the post office or to any person to be delivered to the insured, his assign or agent in the province shall be deemed to evidence a contract made therein, and be construed according to the law thereof, and all moneys payable thereunder shall be paid at the head office or chief agency of the insurer in the province, in lawful money of Canada."
4. What exceptions are there to the requirements for an insurance company to be licensed?
Sections 356 of the Insurance Act (Prince Edward Island) provides that:
"(1) Where sufficient insurance on property in the province at reasonable rates of insurance in the form required by the insurer cannot be obtained by the insured from insurers licensed to do business in the province, a special insurance broker, duly licensed, (See Agents & Brokers) may effect insurance with unlicensed insurers, but shall in the case of every contract so effected obtain from the insured a signed and dated statement describing the property insured, its location and the amount of insurance required, and stating that the insurance cannot be obtained in licensed companies and that the application for such insurance at the stated rate of premium was previously made to and refused by named companies licensed in the province.
(2) Such broker shall, within ten days after the placing of such insurance with unlicensed insurers, submit to the Superintendent a statement setting forth the name of the insured, the property insured and its location, the full names of the unlicensed insurers, and the amount of insurance placed with each and the rate and amount of premium paid to each.
(3) Every such broker shall keep a separate account of insurance effected by him under his license in books in the form prescribed by the Superintendent, which shall be open to inspection by the Superintendent or any of his officers.
(4) Within ten days after the end of each month every such broker shall make to the Superintendent a return under oath in the form and manner by him prescribed, containing particulars of all insurance effected by him under this section during such month."
Section 358 of the Insurance Act (Prince Edward Island) provides that:
"A special insurance broker shall accept applications for insurance with unlicensed insurers only from the insured or another licensed broker, and shall not receive any such application from, or pay or allow compensation or anything of value in respect of such application to, an agent or broker not licensed under this Act, and any contract of insurance with an unlicensed insurer made by or through any agent or broker not licensed under this section shall be deemed to be unlawfully made."
1. Under what legislation are insurance companies required to be licensed?
Section 201 of the Act Respecting Insurance (Quebec) provides that:
"Only the legal persons authorized for that purpose by law and holding licences issued by the Authority shall act as insurers in Quebec…"
2. What activities carried on by an insurance company in Canada require a licence?
Section 1(a) of the Act Respecting Insurance (Quebec) defines the term “insurer” as follows:
"(a) “insurer”: any person who directly or indirectly advertises or acts as an insurer, issues or undertakes to issue an insurance contract, receives premiums, assessments or other amounts under such a contract or to pay mutual benefits, or undertakes to pay insurance benefits or mutual benefits, excluding any professional syndicate authorized to exercise the powers provided in subparagraph 1 of section 9 of the Professional Syndicates Act (chapter S-40) or any person who, in the field of insurance, offers or enters into only contracts of additional warranty under which he binds himself towards another person to assume directly or indirectly, wholly or partly, the cost of repair or replacement of property or part of any property in case of defect or malfunction;"
3. Which jurisdictions have legislation that deems insurance contracts to be made in their jurisdiction?
Article 3119 of the Civil Code of Québec provides that:
"Notwithstanding any agreement to the contrary, a contract of insurance covering property or an interest situated in Québec, or that is subscribed in Québec by a person resident in Québec, is governed by the law of Québec if the policyholder applies for the insurance in Québec or the insurer signs or delivers the policy in Québec."
Also, Article 3150 of the Civil Code of Québec provides that:
"Québec authorities also have jurisdiction to hear an action based on a contract of insurance where the holder, the insured or the beneficiary of the contract is domiciled or resident in Québec, the contract covers an insurable interest situated in Québec or the loss took place in Québec."
4. What exceptions are there to the requirements for an insurance company to be licensed?
Sections 41-43 of an Act Respecting the Distribution of Financial Products and Services (Quebec) provide that:
"41. Only a damage insurance broker acting for a firm, and who is authorized by the Authority to act as a special broker on the conditions determined by regulation of the Authority, may offer an insurance product from an outside insurer. The broker’s certificate shall include the relevant particulars.
No broker may pursue such activities unless the firm has met the requirements set out in the second paragraph of section 77.
An outside insurer is an insurer in damage insurance that does not hold a licence issued pursuant to the Act respecting insurance (chapter A-32).
42. No special broker may offer the products of an outside insurer, except in the fields of automobile insurance and surety insurance, unless justified by market scarcity.
43. Before placing a risk with an outside insurer, special brokers must give the client a written notice stating that the proposed insurer does not hold an insurance licence in Québec and has no establishment in Québec."
The Regulation Respecting Special Brokerage in Damage Insurance under an Act Respecting the Distribution of Financial Products and Services (Quebec) provides that:
"1. A damage insurance broker is authorized to act as a special broker (See Agents & Brokers) provided that the firm in which he is employed or on whose behalf he acts applies in writing to the Autorité des marchés financiers and provides, with the application, the following documents and information:
(1) the name, residential address and certificate number of the damage insurance broker who intends to act as a special broker;
(2) the names and addresses of at least 3 damage insurers holding insurance licences in Québec and whose services the firm is authorized to offer and whose products the firm is authorized to sell;
(3) a copy of the firms' financial statements for its most recent fiscal year, signed by 2 of the firms' directors;
(4) a copy of the security prescribed in section 2.
2. The firm on whose behalf the special broker acts must provide the Authority with a security guaranteeing the obligation of the outside insurers whose products the special broker sells for a blanket amount of $100,000, regardless of the number of insurance contracts placed through a special broker.
3. Each month, the damage insurance broker authorized by the Authority to act as a special broker, must forward to the Authority the following documents and reports:
(1) a copy of all statements signed by clients in accordance with Schedule 1 to this Regulation;
(2) a list indicating the names of the insurers that refused to grant insurance for a given risk and a description of the contemplated risk and the name of the person who requested such insurance;
(3) the name and principal establishment of all outside insurers, as that term is defined in section 41 of the Act respecting the distribution of financial products and services, who agreed to insure the contemplated risk.
4. Every 6 months, a broker in damage insurance authorized by the Authority to act as a special broker shall forward a report to the Authority containing the following information:
(1) for each risk placed with an outside insurer, the number of insurers holding a licence issued under the Act respecting insurance who were offered the coverage of the risk, the name of the outside insurers with whom the risk was placed by the special broker, and a brief description of the risk placed;
(2) the percentage and number of risks entrusted to him by natural persons, partnerships or legal persons having their domiciles, principal establishments or head offices in Québec, both in terms of the number of risks and the value of the premiums placed with an outside insurer."
1. Under what legislation are insurance companies required to be licensed?
Section 2‑2 of The Insurance Act (Saskatchewan) provides that:
"(1) Except as provided in this Act, no insurer shall carry on the business of insurance in Saskatchewan unless the insurer holds a valid licence.
(2) Except as provided in this Act, no insurer shall insure a risk in Saskatchewan unless the insurer holds a valid licence for a class of insurance that covers that risk."
2. What activities carried on by an insurance company in Canada require a licence?
Section 2-1(2) of The Insurance Act (Saskatchewan) provides that:
"For the purposes of this Act, a person is carrying on the business of insurance in Saskatchewan if the person:
(a) undertakes or offers to undertake insurance in Saskatchewan;
(b) sets up or causes to be set up in Saskatchewan any sign or inscription that contains the name of the insurer or that refers to insurance;
(c) issues or delivers any policy or interim receipt in Saskatchewan;
(d) collects or receives or negotiates for or causes to be collected or received or negotiated for any premium for a contract of insurance in Saskatchewan;
(e) inspects any risk in Saskatchewan;
(f) adjusts any loss under a contract of insurance in Saskatchewan;
(g) commences or maintains in Saskatchewan any action or proceeding with respect to a contract of insurance;
(h) is listed in a telephone directory for any part of Saskatchewan in a manner that contains the name of the insurer or that refers to insurance;
(i) solicits, negotiates, provides, promotes, advertises, markets, sells or distributes any contract of insurance by any means that cause communication from the insurer or the insurer’s agents or representatives to reach a person in Saskatchewan;
(j) has a resident agent or representative or maintains an office or place of business in Saskatchewan that contains the name of the insurer or that refers to insurance;
(k) holds himself, herself or itself out as carrying on the business of insurance in Saskatchewan; or
(l) carries out any other prescribed activity.
3. Which jurisdictions have legislation that deems insurance contracts to be made in their jurisdiction?
Section 8-7 of The Insurance Act (Saskatchewan) provides that:
(1) For the purposes of this Act, a contract of insurance is deemed to have been made in Saskatchewan if:
(a) it insures a person who is domiciled or resident in Saskatchewan when the contract is made; or
(b) the subject‑matter of the contract is property that is or will be located in Saskatchewan.
(2) This section has effect notwithstanding any agreement, condition or stipulation to the contrary.
4. What exceptions are there to the requirements for an insurance company to be licensed?
Section 6-1 of The Insurance Act (Saskatchewan) provides that:
"No person shall enter into or renew a contract of insurance to insure a risk in Saskatchewan with an unlicensed insurer unless the requirements of subsection 6‑2(1) or 6‑7(1) are met.
Subsection 6‑2(1) The Insurance Act (Saskatchewan) provides that:
" 6‑2(1) Notwithstanding section 2‑2, an insurer that is not licensed may undertake insurance in Saskatchewan with an insured if:
(a) the insurance is effected without any solicitation through any medium to cause communication with residents of Saskatchewan on the part of that insurer;
(b) the insurance is not effected by a special broker; and:
(c) the insured, not later than 30 days after signing the contract of insurance or receiving any policy, interim receipt or insuring document issued by or on behalf of the insurer, whichever occurs first:
(i) pays to the Superintendent a tax equivalent to 10% of the premium paid or payable or of the premium note given or of the mutual or other liability assumed under the contract; and
(ii) delivers to the Superintendent a document that:
(A) is prepared in the prescribed manner; and
(B) contains the prescribed information.
Subsection 6‑7(1) of The Insurance Act (Saskatchewan) provides that:
"Notwithstanding section 2‑2, an insurer that is not licensed may undertake insurance in Saskatchewan with an insured if:
(a) one of the following circumstances exists:
(i) sufficient insurance cannot be obtained at reasonable rates from an insurer licensed pursuant to this Act; and
(ii) sufficient insurance cannot be obtained on the terms stipulated by the proposed insured from an insurer licensed pursuant to this Act;
(b) the insurance is effected through a person who holds a valid special broker’s endorsement for that class of insurance;"
(c) before the insurance is undertaken, the special broker provides the proposed insured with a document that meets the requirements of subsection (2) and that:
(i) describes the nature and amount of the insurance required;
(ii) states that the insurance cannot be obtained from licensed insurers and specifying the licensed insurers who refused the proposed insured’s application;
(iii) states that the insurance will be placed with an unlicensed insurer;
(iv) states that:
(A) the unlicensed insurer is not subject to regulation pursuant to this Act;
(B) the orderly payment of claims may be more difficult than it would be if the person obtained insurance from a licensed insurer;
(C) the Superintendent has no authority with respect to the unlicensed insurer;
(D) the proposed insured may not have the protection of any compensation plan; and
(E) the proposed insured may have to take legal proceedings in another jurisdiction outside Saskatchewan or Canada to enforce the contract of insurance; and
(v) contains any other information the Superintendent may require; and
(d) the special broker retains a copy of the document mentioned in clause (c) for its records.
(2) The document mentioned in clause (1)(c) must be signed and dated by the special broker and contain an acknowledgment of its receipt signed and dated by the proposed insured."
1. Under what legislation are insurance companies required to be licensed?
Section 20 of the Insurance Act (Yukon) provides that:
"(1) Every insurer undertaking insurance in the Yukon or carrying on business in the Yukon shall obtain from the superintendent and hold a licence under this Act.
(2) Every insurer undertaking insurance or carrying on business in the Yukon without having obtained a licence as required by this section is guilty of an offence.
(3) A person who in the Yukon does or causes to be done any act or thing mentioned in subsection 19(3) or (4) on behalf of or as agent of an insurer not licensed under this Act or who receives directly or indirectly any remuneration for so doing is guilty of an offence…"
2. What activities carried on by an insurance company in Canada require a licence?
Section 19 of the Insurance Act (Yukon) defines what constitutes carrying on business in the Yukon within the meaning of the Insurance Act (Yukon).
"(1) This Part applies to insurance undertaken in the Yukon and to all insurers carrying on business in the Yukon.
(2) An insurer undertaking a contract that under this Act is deemed to be made in the Yukon, whether the contract is original or renewed, except the renewal from time to time of life insurance policies, shall be deemed to be
undertaking insurance in the Yukon within the meaning of this Part.
(3) An insurer undertaking insurance in the Yukon or that, in the Yukon,
(a) displays or causes to be displayed a sign containing the name of an insurer;
(b) maintains or operates, either in its own name or in the name of its agent or other representative, an office for the transaction of the business of insurance either in or out of the Yukon;
(c) distributes or publishes or causes to be distributed or published any proposal, circular, card, advertisement, printed form, or like document;
(d) makes or causes to be made any written or oral solicitation for insurance;
(e) issues or delivers any policy of insurance or interim receipt, collects, receives, or negotiates for or causes to be collected, received, or negotiated for any premium for a contract of insurance, inspects any risk or adjusts any loss under a contract of insurance; or
(f) prosecutes or maintains in the Yukon an action or proceeding in respect of a contract of insurance
shall be deemed to be an insurer carrying on business in the Yukon within the meaning of this Act."
3. Which jurisdictions have legislation that deems insurance contracts to be made in their jurisdiction?
Section 49 of the Insurance Act (Yukon) provides that:
"If the subject matter of a contract of insurance is property in the Yukon or an insurable interest of a person resident in the Yukon, the contract of insurance, if signed, countersigned, issued, or delivered in the Yukon or committed to the postal office or to any carrier, messenger or agent to be delivered or handed over to the insured, their assign or agent in the Yukon, shall be deemed to evidence a contract made therein, the contract shall be construed according to the law thereof, and all money payable under the contract shall be paid at the office of the chief officer or agent in the Yukon of the insurer in lawful money of Canada."
4. What exceptions are there to the requirements for an insurance company to be licensed?
Section 40 of the Insurance Act (Yukon) provides that:
"Despite anything in this Act any person may insure property situated in the Yukon against fire with an unlicensed insurer, if that insurance is effected outside the Yukon and without any solicitation whatsoever directly or indirectly on the part of the insurer, and any property insured or to be insured under this section may be inspected and any loss incurred in respect thereof adjusted."
Section 238 of the Insurance Act (Yukon) provides that:
"(1) The superintendent may, on the payment of the prescribed fee, issue to any suitable person resident in or outside or the Yukon a licence to act as a special insurance broker (See Agents & Brokers) to negotiate, continue or renew contracts of insurance in the Yukon, other than contracts of life insurance, with insurers not authorized to transact that business in the Yukon.
(2) The applicant for such a licence shall file with the superintendent a written application under oath as prescribed by subsection 235(2).
(3) If the superintendent is satisfied with the statements and information required by subsection (2), the superintendent shall issue the licence applied for, and the licence expires at any time the regulations provide unless sooner suspended or revoked.
(4) The superintendent may renew a licence issued pursuant to this section for each succeeding year on payment of the prescribed fee without requiring anew the detailed information specified by section 235.
(5) A person shall, before receiving the licence, execute and deliver to the superintendent security to the satisfaction of the superintendent in the sum of not less than $5,000 that the licensee will faithfully comply with this Act.
(6) If sufficient insurance in the Yukon cannot be obtained at reasonable rates or on the form of contract required by the insured from insurers licensed to do business in the Yukon, the person named in the license may effect insurance with unlicensed insurers, but shall in the case of every insurance effected under this section obtain from the insured a signed and dated statement describing the risk to be insured and the amount of insurance required and stating that the insurance cannot be obtained in licensed companies and that the application for the insurance at the stated rate of premium was previously made to and refused by named companies licensed in the Yukon, and the person named in the license shall, within 10 days after the placing of the insurance with unlicensed insurers, submit to the superintendent a statement setting forth the name of the insured, a description of the risk insured, the full names of the unlicensed insurers, and the amount of insurance placed with each and the rate and amount of premium paid to each.
(7) Such a licensee shall keep a separate account of insurance effected by the licensee under the license in books in the form prescribed by the superintendent, which shall be open to inspection by the superintendent or any officer appointed by the superintendent.
(8) Within 10 days after the end of each month every such licensee shall make to the superintendent a return under oath in the form and manner prescribed by the superintendent, containing particulars of all insurances effected under the section by the licensee during the month.
(9) In respect of all premiums on insurance effected under a licence, the licensee shall pay any taxes that would be payable if the premiums had been received by a licensed insurer, and payment thereof shall accompany the monthly return provided for in subsection (8).
(10) The licensee is entitled to a release or cancellation of their security if all insurances effected by them under this section are no longer in force or have been reinsured.
(11) A licensee under this section shall accept applications for insurance with unlicensed insurers only from the insured or another licensee under this section and shall not receive any such application from, or pay or allow compensation or anything of value in respect of those applications to an agent or broker not licensed under this section, and any contract of insurance with an unlicensed insurer made by or through any agent or broker not licensed under this section shall be deemed to be unlawfully made within the meaning of section 240.
(12) The superintendent may, for cause shown, revoke a licence issued under this section, or may suspend it for a period not exceeding the unexpired term thereof and may for cause shown revoke the licence while so suspended, and shall notify the licensee in writing of the revocation or suspension and the cause shown.
(13) A person licensed under this section who contravenes any of its provisions is guilty of an offence and, in addition of any other penalty, shall forfeit their licence."
