Chapter 3 Flashcards
What is the primary role of the Office of the Superintendent of Financial Institutions (OSFI)?
To supervise and enforce safeguards ensuring financial health of Canadian and foreign insurance companies.
Which legislation governs the incorporation and regulation of insurance companies in Canada?
The Insurance Companies Act.
What are the three areas of supervision under the Insurance Companies Act?
Establishment, prerequisites to operation, and supervision during operation.
What legal document grants an insurance company its corporate status?
Letters patent.
Why is federal incorporation preferred for insurance companies?
To facilitate business operations across Canada.
What must an insurance company provide to obtain an order of commencement?
Incorporating documents, proof of capitalization, and other required information.
Where must the company publish notice of the order of commencement?
In a local newspaper and the Canada Gazette.
How often are insurance companies inspected by OSFI?
At least once a year, or every three years if deemed less frequent.
What must a company’s annual return include?
Assets, liabilities, income, expenditures, and actuarial/auditor reports.
What happens if a company fails to comply with OSFI directives?
OSFI may take control of assets and liquidate the company.
What is required for a foreign insurance company to operate in Canada?
An order of the superintendent approving specified risks in Canada.
Where must a foreign company vest its assets in Canada?
In trust with a Canadian financial institution.
What is the role of provincial/territorial regulators?
to supervise insurance companies operating exclusively in their jurisdictions.
Which insurance professionals are licensed by provinces/territories?
Agents, brokers, and adjusters.
What do provincial insurance acts regulate?
Statutory conditions, policy contents, and grounds for voiding policies.
Which policies are most affected by statutory conditions?
Accident and sickness, automobile, and fire insurance policies.
What is the purpose of PACICC?
To protect policyholders if an insurer becomes insolvent.
How is PACICC funded?
By the property and casualty (P&C) insurance industry.
What does PIPEDA govern?
Collection, use, and confidentiality of personal information.
Name three provinces with privacy legislation deemed “substantially similar” to PIPEDA.
Alberta, British Columbia, and Quebec.
What governs insurance contracts in Quebec?
The Civil Code of Québec.
How does the Civil Code differ from common law in other provinces?
It is not obliged to follow prior case law.
What is regulated under highway traffic acts?
Driver and vehicle licensing, and insurance proof requirements.
What penalties may result from operating an uninsured vehicle?
Fines and other legal penalties under traffic acts.
What does the Insurance Companies Act ensure?
The financial integrity and solvency of insurers.
Who enforces the Insurance Companies Act?
OSFI
What happens if an insurer omits statutory conditions?
The statutory conditions still apply, and penalties may be incurred.
Can statutory conditions be varied in accident and sickness policies?
Yes, but only if the changes are not less favorable to the insured.
What investment principle must insurance companies follow?
A prudent portfolio approach to avoid undue risk and ensure reasonable returns.
What reserves must companies maintain under the Insurance Companies Act?
Reserves for unearned premiums and claims.
What are the key steps to responding to a privacy breach?
Identify the breach and its source (internal or external).
Contain the breach and reduce harm.
Evaluate the risks associated with the breach.
Determine and notify affected parties.
Prevent future breaches by addressing the cause.
What is the first step in responding to a privacy breach?
Identify the breach and its source, determining whether it is internal or external.
What does the containment step involve when responding to a privacy breach?
Containing the breach involves assessing ways to reduce harm to the affected parties and preventing further exposure.
Why is evaluating the risks of a breach important?
helps assess the potential harm based on factors like the type of personal information, the cause of the breach, the number of people affected, and any risks to public health or safety.
How should organizations handle notification during a privacy breach?
Determine who needs to be notified based on case-by-case review and send appropriate notice to affected parties and relevant authorities.
What is the final step in responding to a privacy breach?
Prevent future breaches by determining how the breach occurred and taking steps to prevent recurrence.
What type of insurance coverage can help organizations address privacy breaches?
can cover legal defence costs and damages for lawsuits arising from breaches of fiduciary duty related to client information.
