MCD.INTRO Flashcards
identify FEDERAL areas of exclusive authority (this is not specific to insurance) (6)
- regulation of (trade, commerce)
- taxation
- banking
- (bankruptcy, insolvency)
- aliens & naturalization
- criminal law
identify PROVINCIAL areas of exclusive authority (this is not specific to insurance) (4)
- provincial taxes
- civil property rights
- hiring & supervising provincial employees
- operating jails & hospitals
define intra vires, ultra vires
INTRA VIRES: within the powers of a particular Govt
ULTRA VIRES: beyond the powers of a particular Govt
Citizens Ins v Parsons (arson!!!)
FACTS: insurer disuptes ON’s Fire Insurance Act
- the Act required certain statutory conditions for fire policies in ON
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
Ruling (Issue 1):
- 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)
Ruling (Issue 2)
- status & capacity UNAFFECTED
- insurers are all treated equally, regardless of where they were incorporated
Insurance Reference Case: AG(Can) v AG(AB)
FACTS: The Federal Insurance Act required a Federal license of all insurers..
..EXCEPT IF (incorporated by Province) AND (operating solely in Province)
ISSUE: is this ultra-vires of the federal government
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
(not covered by Federal power to legislate for Peace, Order, Good Government)
Implications of the ruling of the insurance reference case (3)
- a provincial insurer has the capacity, but not the right to operate in another Province
(need permission from other province) - federal insurer has the capacity and the right to operate in another province
- federal government can require a federal license for a foreign insurer
BC Public Auto: CIC v AG(BC)
FATCS: BC legislature establishes compulsory public auto insurance plan
- legislature refuses license renewal of private insurers
- insurers sue
ARGUMENTS:
- insurers claimed BC legislation is ULTRA VIRES for 2 reasons:
- it relates to regulation of trade, which is federal
- province can’t legislate to deprive federally incorporated insurer of status &capacity
RULING: BC legislature acted within its powers (legislation is INTRA VIRES)
identify of examples FEDERAL regulation/legislation regarding insurer solvency (5)
- CONDITIONS for entering business
- INVESTMENTS
- regular REPORTING
- CALCULATION of assets & reserves
- PROTECT policy holders
areas & matters under PROVINCIAL insurance legislation/regulation
CONTRACT MATTERS: (ppp-ird)
- (policy contents), (policy terms), (premium payment), (insurable interest), (reinstatement), (designation of beneficiaries)..
TRANSACTION MATTERS: (AUC)
- (Agent licensing), (Unfair practices), (Claims handling)
OSFI licensing requirements for domestic insurers (for Minister of Finance to approve letters patent) (6)
- financial resources (must be sufficient)
- business plan (detailed & realistic)
- business record of applicants (check for past bankrupticies)
- (character, competence, experience) of management
- positive effect on Canadian financial system (jobs, GDP growth)
- if owned by a foreign parent, OSFI must be satisfied that subsidiary will be treated fairly