Alberta auto insurers reminded to ensure premium arrears still recoverable before denying or cancelling policy

Alberta auto insurers cannot deny or cancel an auto policy on the ground of premium arrears if those arrears are more than two years old and therefore may not be recoverable, the province’s regulator clarified in a bulletin.
Section 613.1(3) of the province’s Insurance Act states than an insurer may refuse to renew or issue an automobile insurance contract to a person when that person owes arrears to an insurer.
“It has come to my attention that insurance companies have taken adverse contractual actions against applicants because of premium arrears when the arrears may no longer be recoverable as a result of the age of the arrears,” Brad Geddes, Alberta’s deputy superintendent of insurance, said in the bulletin.
“In accordance with section 792.1 of the Insurance Act, I am advising insurance companies, by means of this interpretation bulletin, that in order to take an adverse contractual action against an applicant under Section 613.1(3) of the Insurance Act, the arrears must be recoverable within the provisions of the Limitations Act.”
The limitation period for automobile insurance premium arrears is two years.
Geddes also reminded insurers that under Section 613.1(3) of the Insurance Act, an adverse contractual action might only be taken in respect to premium arrears that an applicant owes directly to any insurance company. Also, the premium arrears must have arose out of an automobile insurance contract issued in Alberta to the applicant.