CCIR revises undertaking “to allow companies more flexibility in their business models”

The Canadian Council of Insurance Regulators (CCIR) has revised its December 2009 voluntary consent and undertaking, eliminating portions that specified how insurers were to be conducting their business in Canada.
“After consultations with industry stakeholders, regulators have revised the consent and undertaking (C&U) that was sent to you on Dec. 1, 2009,” the CCIR wrote to (re)insurance company CEOs and chief agents in a cover letter explaining the changes. “It is now more generally worded to allow companies more flexibility in their business models.”
The CCIR asked companies to sign the voluntary consent and undertaking as a means to harmonize the federal and provincial regulatory reporting requirements in light of amendments to Part XIII of the Insurance Companies Act.
Originally, the voluntary consent and undertaking contained two main sections, the first of which defined what it meant for an insurer to “carry on business” in Canada.
To conform to this section, insurers had to maintain an office or have a representative located in Canada. Through this office or representative, the insurer had to communicate to the policyholder, provide insurance coverage, accept requests for coverage and receive payments from the policyholder for insurance coverage.
The second section required the vesting of assets related to risks insured in Canada.
The new version of the undertaking has eliminated the first section, and now speaks only to the vesting of assets.
The wording of the revised voluntary consent and undertaking says: “All risks insured by the insurer as a result of any activity or activities that cause the insurer to either carry on business under any province’s insurance legislation or transact insurance in any province, shall be insured by the insurer only in a manner that requires the insurer to vest assets in trust in respect of those risks, pursuant to the act.”