Why insurers want P&C group insurance in Quebec

The Insurance Bureau of Canada (IBC) is calling for the creation and regulation of P&C group insurance in Quebec.

P&C group insurance allows for a number of people, or a group, to be insured in a single contract. For example, a ridesharing company could use a group insurance contract to cover every driver while connected to the Uber app. Or a condominium corporation could enter into a group insurance contract with one insurer to cover every co-owner of the building for contents.

Group insurance already exists in Quebec for life insurance, including workplace healthcare benefits and pensions. P&C group insurance was initially proposed in the province’s last parliamentary session.

“The rapid introduction of this type of insurance, which is available everywhere else in Canada, would allow better protection for all users and suppliers of a service,” IBC said last week. “A sharing economy platform being able to purchase a group insurance policy specifically to meet its users’ needs would make it possible to avoid gaps in coverage created by the fact that policies purchased individually are generally based on people’s personal use of their property, and can therefore exclude certain activities related to the sharing economy.”

Pierre Babinsky, director of communications and public affairs with IBC, told Canadian Underwriter earlier this week that P&C group insurance would be an “interesting option” to some of the challenges brought on by the sharing economy. If created and regulated by Quebec’s financial regulator, the Autorité des marchés financiers (AMF), a ridesharing company, for example, could enter into an agreement with an insurer so that every one of their users is protected by the insurance contract rather than having every driver having to have their own policy to cover ridesharing activities, Babinsky explained.

In Quebec, there is a pilot project between the provincial government and Uber in which the regulator has allowed “a group insurance-type contract” that covers every driver while they are connected to the Uber application. “It’s a little like fleet insurance, except for with fleet insurance, the owner of the insurance contract has to own every one of the vehicles,” Babinsky said. “The group insurance allows the same principle, but the platform does not own the cars that are driving the consumers around.”

The pilot project began as a one-year project in October 2016, but was renewed for another year last October.

In the last parliamentary session, Bill 150 proposed amending legislation to allow P&C group insurance in Quebec. It would have been regulated through legislation that would be drafted afterwards. However, provisions concerning P&C group insurance were removed from the bill for “lack of time” before it was enacted in spring. In June, the Groupe de travail sur l’économie collaborative (working group on the sharing economy) recommended enabling and regulating P&C group insurance in Quebec.

“We don’t know yet how the government was planning on regulating it, so we’re working with government to hopefully have it re-introduced,” Babinsky said. “We’re happy the working group on the sharing economy has reached the same conclusion as us, that it is important. We hope… we can move on after the Oct. 1 election with the new government to proceed.”