Provincial legislative changes may be required to harmonize with Part XIII amendments: CCIR

Legislative changes may be required in some provinces to harmonize provincial insurance regulation with amendments to Part XIII of the federal Insurance Companies Act (ICA), the Canadian Council of Insurance Regulators (CCIR) noted in an online update of its activities.
The CCIR discussed in its September 2008 Fall meeting the potential implications of bringing into force the changes to Part XIII of the Federal Insurance Companies Act.
“The work to date of the RCC [Reinsurance Council of Canada] has confirmed that the insurance legislation in many provinces defines insurance in the province on a basis that is not compatible with the new federal definition,” the CCIR notes in its fall meeting highlights.
“Therefore, legislation changes may be required in some jurisdictions.”
Amendments to Part XIII of the ICA are now slated to come into force Jan. 1, 2010.
The Office of the Superintendent of Financial Institutions (OSFI) proposed amendments to Part XIII of the ICA because OSFI was concerned that the notion of a “policy in Canada” was different than the notion of “business in Canada,” thus resulting in misalignment between the Winding up and Restructuring Act and the ICA.
But OSFI’s approach has led to debate within the insurance community about, among other things, the harmonization between OSFI’s proposal and provincial regulations.
For example, the industry has noted its concern that there is a potential lack of harmonization between the definition of “carrying on business” in provincial insurance legislation and the “insuring in Canada of a risk,” as outlined in OSFI’s advisory on the Part XIII amendments.