IBC pushes Ontario government to stall changes to Part XIII of Insurance Companies Act

Insurance Bureau of Canada (IBC) wants the government of Ontario to work with the federal government to delay changes to Part XIII of the Insurance Companies Act of Canada until the initiative is fully understood by provincial regulators.IBC made the suggestion as part of its pre-budget submission to Ontario’s minister of finance.The Office of the Superintendent of Financial Institutions (OSFI) changed the definition of whether or not an insurance policy is considered Canadian, effective Jan. 1, 2010.If an insurance policy is Canadian, the insurer must obey Canadian laws, pay Canadian taxes and obey OSFI’s solvency rules, IBC said. If the policy is not Canadian, it does not.”There is not a clear understanding by provincial regulators about the change [to Part XIII] OSFI has made,” IBC said in its submission. “Because the federal and provincial acts differ, it is possible for an insurance policy not to be Canadian according to the OSFI definition, but still be considered a policy in Ontario.”This has potential tax and solvency implications that insurers and provincial regulators are only beginning to understand, IBC added.”The government of Ontario should work with the federal government to delay changes to the definition of ‘Policy in Canada’ until the implications are fully understood.”