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Alberta Government Warns Public Against Unlicensed Insurers


July 6, 2001   by Canadian Underwriter


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Earlier in the week, the Alberta government warned consumers about purchasing insurance from unlicensed insurers. According to an Insurance Bureau of Canada (IBC) news release issued about the warnings, injunctions have been obtained against Combined Services Ltd., Citadel General Surety Ltd., Vanguard Marine and General Ltd., and Tri-Continental Exchange Ltd., ordering them to stop carrying on business in Alberta until they are licensed. Regulators in Ontario and British Columbia have also taken action against these entities.

“If you are currently insured with one of these unlicensed insurers, you should immediately contact an insurance broker or a licensed insurance company to make arrangements to obtain insurance coverage that complies with both the Motor Vehicle Administration Act and the Insurance Act,” says Jim Rivait, regional vice-president of the Insurance Bureau of Canada. “Consumers can also check the Alberta Finance Web site at www.treas.gov.ab.ca for a list of licensed insurers in Alberta.”

According to the IBC, consumers should be aware that if they have insurance through an unlicensed insurer, they are uninsured in Alberta for the purposes of the compulsory automobile insurance requirement under the Motor Vehicle Administration Act, regardless of whether the company has any intention of paying a claim. Furthermore, it is an offence to purchase insurance from an unlicensed insurer under the Insurance Act, unless consumers comply with the conditions in Section 126. Any consumers that drive without automobile insurance in Alberta, are subject to a fine of $2,500 for a first offence under the Motor Vehicle Administration Act.

The IBC is encouraging consumers can contact the bureau’s consumer information centre in Edmonton if they have doubts or questions about whether their insurance is in compliance with Alberta legislation. The centre can be reached at (780) 423-2212 or toll-free at 1-800-377-6378.