B.C. Insurance Council proposes new unauthorized insurer rule

The Insurance Council of British Columbia is proposing a new ‘Unauthorized Insurer Rule’ that requires licensed insurers or agents to inform the council in writing if they are conducting insurance transactions under an existing exemption for doing business with unauthorized insurers.
“Only licensees who have registered with the council by providing written notification of their intent to rely on the [exemption in] Section 76 of the [B.C. Financial Institutions] Act will be permitted to do so,” the council notes in a paper soliciting public comment on the proposed rule. “A licensee will be provided to provide council with specific information, such as:
•    the name of the agent/agency;
•    in the case of an insurance agency, the lead licensee responsible for this area of business;
•    a brief description of the qualifications of the licensee, or, in the case of an agency, the qualifications of the lead licensee responsible for this area of business; and
•    confirmation the licensee understands the disclosure and the trust account requirements.
After written notification has been provided to council, a licensee may proceed with an insurance transaction under the exemptions listed in s. 76.
There will be no administrative fee for writing the letter, and the licensee will not be required to wait for council’s approval before proceeding with the transaction.
Nevertheless, the council said it reserves the right to remove the ability of a licensee to rely on the s. 76 exemption where council “can demonstrate a licensee is not qualified to conduct such insurance transactions,” or that the transactions were against applicable laws.
There is a 60-day period for public comment on the proposed rule. The council is soliciting public comment up until Mar. 26, 2010.
Feedback can be emailed to rules@insurancecouncilofbc.com