McD.Intro Flashcards
Identify FEDERAL areas of exclusive authority (not specific to insurance) (6)
- Regulation of trade & commerce
- Taxation
- Banking
- Bankruptcy & Insolvency
- Aliens & naturalization
- Criminal Law
Identify PROVINCIAL areas of exclusive authority (not specific to insurance) (3)
- Incorporation of companies with provincial objects
- Property & civil rights in the province
- All matters of mere local or private nature
Define intra-vires & ultra-vires
Intra-vires: Within the powers of a particular Government
Ultra-vires: beyond the powers of a particular Government
Define the areas & matters under PROVINCIAL insurance legislation/regulation
Contract matters & transaction matters
Contract matters:
- Policy contents, policy terms, premium payments, insurable interest, reinstatement, designation of beneficiaries
Transaction matters:
- Agent licensing, Unfair practices, claims handling
Evaluate the possibility of replacing provincial regulation of auto with federal regulation
Not feasible:
- This would be ultra-vires for the federal government
- Insurance reference case says regulation of trade & commerce doesn’t cover licensing a particular trade
Citizens Ins v Parsons: Facts (1881)
Insurer disputes ON’s Fire Insurance Act
- the Act required certain statutory conditions for fire policies in ON
Citizens Ins v Parsons: Issues
Issue 1: is ON Fire Act Ultra Vires? (relates to regulation of trade, which is federal)
Issue 2: Insurer claims province can’t legislate to deprive federally incorporated insurer of status & capacity
Citizens Ins v Parsons: Ruling of JCPC on issue 1 (Judicial Committee of Privy Council)
ON Fire Act is INTRA VIRES
Reason:
- Federal government can’t regulate an insurer operating in a single province
- Such insurance contracts are INTRA-provincial and are not covered by federal trade regulations
Trade means INTER-provincial (not INTRA-provincial)
Citizens Ins v Parsons: Ruling of JCPC on issue 2
- Status & capacity UNAFFECTED
- Insurers are all treated equally regardless of where they were incorporated
Insurance Reference Case: AG(Can) vs AG(AB): Facts (1916)
(1910) Federal government introduced the Federal Insurance Act which required a Federal license of all insurers, EXCEPT IF incorporated by province AND operating solely in province. AG of Alberta challenged constitutionality of this law.
Insurance Reference Case: AG(Can) vs AG(AB): Issues
Is this version of the Federal Insurance Act “Intra vires” for the Federal Government? (AG of AB believed this to be “ultra vires” for Federal Government)
Insurance Reference Case: AG(Can) vs AG(AB): Ruling - JCPC
Licensing provisions are “ultra vires”:
- Regulation of trade/commerce didn’t extend to a licensing system of a particular trade
- Trespasses on provincial authority in civil rights
Insurance Reference Case: AG(Can) vs AG(AB): Implications (Canada & Foreign)
Canada Implications:
- A provincial insurer has the capacity, but not the right to operate in another Province (need approval from other provinces to operate in them)
- A federal insurer has the capacity and the right to operate in another province
These are 2 ways an insurer can operate in more than 1 province
Foreign Implications:
- Federal government can require a federal license for a foreign insurer (even if the foreign insurer is operating in only 1 province)
Fully discuss the outcome of the case “AG(Can) vs AG(AB)” with respect to how a provincially incorporated insurer can carry on business in a different province
An insurer incorporated in one province was doing business in a different province. The Federal government believes this to fall under their jurisdiction of Trade. However, the Provincial government believed that insurance contracts did not count as trade. The Privy Council took the side of the province and ruled this ultra vires with respect to the Federal government.
BC Public Auto: CIC vs AG (BC): Facts (3)
BC legislature establishes compulsory public auto insurance plan
- legislature refuses license renewal of private insurers
- insurers sue
