Alberta first out of the gates to adopt CCIR privilege model

Lang Michener author Frank Palmay has praised Alberta for being the first provincial jurisdiction in Canada to extend privilege to cover an insurer’s self-assessment documents.
“Alberta’s approach is a reasonable balance of the equities and it is hoped that its lead will be followed by other jurisdictions,” Palmay wrote in a newsletter article published by the International Law Office.
The Canadian Council of Insurance Regulators (CCIR) first published its final position paper in May 2008 on the subject of extending privilege to an insurer’s self-assessment documents.
Alberta is the first of the Canadian provinces to adopt the CCIR’s model in its legislation.
In its May 2008 position paper, the CCIR encourages insurers “to undertake self-assessment exercises as a way to support adoption and implementation of best corporate governance practices and to reduce the risk of non-compliance.”
Self-assessment exercises are an important component of the risk-based system, the CCIR notes.
“The proposition to extend privilege to self-assessment documents and giving evidence related to such documents is intended to provide protection to insurers, thereby promoting open and critical self-assessments and the consumer protection improvements that can be gained from regulators’ use of the results of such assessments,” the CCIR notes.
Palmay observes that sophisticated Web-based self-assessment systems are available in Canada.
“A properly operating self-assessment system provides a central and readily accessible location for problems identified and reveals how they are dealt with by the company,” he writes. “Understandably, insurers are concerned that a robust and effective self-assessment system may provide a roadmap for plaintiffs and other parties wishing to attack the company.”
Palmay notes the privilege provisions are found in Section 816.2 of the Insurance Act (Alberta).
The section defines what constitutes an ‘insurance compliance self-evaluation audit’ and the resultant ‘document.’
Consistent with the CCIR model, the Alberta legislation disallows privilege under the following circumstances:
•    proceedings commenced by the regulator;
•    privilege asserted for fraudulent purposes;
•    proceedings involving disputes with a person involved in the audit; and
•    non-audit information referred to in the document.