Lloyd’s Canada’s reinsurance market deemed Part XIII compliant

Lloyd’s Canada’s reinsurance market is compliant with the amendments to Part XIII of the Insurance Companies Act of Canada, including the business that it has written over the past 10 years.
Deborah Moor, president of Lloyd’s Canada served as the keynote speaker at the Insurance Institute of Ontario’s ‘At the Forefront’ breakfast seminar in Toronto on Nov. 18, 2009.
During her presentation, Moor was asked to confirm that Lloyd’s Canada’s older business also qualifies as insuring a risk in Canada.
“The industry as a whole is still feeling its way as to what to do about the old liabilities,” Moor said.
“OSFI suggested to us … that we had to re-write all of those risks. We would re-enter those contracts so that both parties could be sure that the risk was going to be in Canada.”
But, “that’s not a very practical suggestion,” she said.
Recently, Insurance Bureau of Canada reached an agreement with OSFI that an appropriate measure would be for the reinsurer and the cedant to enter into an estoppel agreement, she continued.
In the agreement, parties would assent “that they wouldn’t ever challenge that the risk was in Canada.”
At the moment Lloyd’s Canada is going through the process of how it would physically sign that estoppel, she said.
“If that turns out to be a solution that works for the cedants in Canada, then we would like to be able to offer that to them as confirmation.”