Study 2 - Legislation and General Principles: Summary

Question 1

Civil law courts decide

Answer 1

1) Whether to rule in favour of the plaintiff

2) Whether to assess compensation

Question 2

Two systems of civil law in Canada

Answer 2

• Common law (outside Quebec)

- Civil Code of Quebec

Question 3

Common Law

Answer 3

• From England, church law, and Roman law
• Unwritten law based on the rule of precedent
• Decisions made by courts establish case law
• Legislatures pass written statute law
• Canada’s common law system is a mix of case law and statute law
• Insurance Act is statute law - no terms or conditions of a policy can supersede it

Question 4

Contra proferentem

Answer 4

Because insurers write the contract, ambiguity in terms must favour the policyholder

Question 5

Relief from forfeiture

Answer 5

Insured may argue that a condition is unjust or unreasonable and apply for relief

Question 6

Civil Code of Quebec

Answer 6

• Comes from the Civil Code of Lower Canada
• Based in part on France’s Napoleonic Code and Code of Justinian (6th Century Byzantine emperor)
• Quebec courts formulate opinions based on 1) Civil Code and 2) Quebec’s Charter of Human Rights and Freedoms
• Court may consider precedent, but is not required to

Question 7

Conditions that apply by statute to property policies in the common law provinces (not Quebec)

Answer 7

• Insurance acts set statutory conditions for all fire insurance contracts
• Statutory conditions extended to apply to the other perils
• Must be printed in all fire policies
• No variation, omission, or addition to any statutory condition is binding on the insured

Question 8

Civil Code of Quebec and conditions that apply to property policies

Answer 8

• Provides for “obligations” that apply to property insurance
• Civil Code does not require articles to be included in fire insurance policies
• Quebec property policy conditions include: a) provisions based on the Code and b) provisions not found in the Code
• The Code requires a standard of good faith for both insured and insurer
• Provisions in Civil Code correspond with the statutory conditions in the insurance acts - they differ in wording but are similar in effect

Question 9

Statutory conditions for fire insurance

Answer 9

1. Misrepresentation - insured must disclose truthful information
2. Property of Others - insurer not liable for property of others
3. Change of Interest - insured cannot assign rights and obligations to another
4. Material Change - insured must notify the insurer about changes in risk
5. Termination - outlines requirements for termination by insured or insurer
6. Requirements After Loss - insured must provide proof of loss
7. Fraud - fraud by insured invalidates coverage
8. Who May Give Notice and Proof - any person to whom insurance money is payable
9. Salvage - insured is required to protect the property from further damage
10. Entry, Control, Abandonment - insurer may enter, insured retains control but may not abandon
11. Appraisal - resolve disputes over extent of damage or the value of claim
12. When Loss Payable - insurer is required to respond and make payment within 60 days of claim
13. Replacement - insurer makes decision to repair or replace damaged property
14. Action - outlines limitation period of insured to pursue grievance
15. Notice - outlines requirements for giving written notice to insurer

“Michelle probably could make the right fries, which she eats, and which really are nice.”

Question 10

Impact of privacy laws on property insurance in Canada

Answer 10

• Insurers are required to protect the privacy and personal information of customers
• Insurer collects personal information via application process
• Personal information is information about an identifiable individual, and may include demographic, health, and education data, depending on the context or law
• Insurers must indicate why it is collected, how it is used, and how it is protected
• Provinces and territories have their own privacy legislation and a privacy commissioner or ombudsman

Question 11

Personal Information Protection and Electronic Documents Act (PIPEDA)

Answer 11

• Sets out how information may be collected, used, or disclosed
• Applies to commercial activities, federal matters involving governments, and private-sector activities that cross borders

Question 12

Other privacy laws

Answer 12

• Freedom of Information and Protection of Privacy Act (FOIPPA): Does not apply to Quebec and territories
• Personal Information Protection Act (PIPA): Governs private sector
• Access to Information and Protection of Privacy Act: Yukon, the Northwest Territories, and Nunavut
• Act Respecting Access to Documents Held by Public Bodies and the Protection of Personal Information: applies to the public sector in Quebec