A - McDonald

Question 1

McDonald

6 legislative matters intra vires of FEDERAL

Answer 1

1) Criminal Law
2) Trade and Commerce
3) Taxation
4) Banking
5) Bankruptcy and insolvency
6) Naturalization and Aliens
7) Peace, Order and Good Government of Canada on all matters not withing subjects assigned exclusively to provinces.

Question 2

McDonald

3 legislative matters exclusive to PROVINCIAL

Answer 2

1) Incorporation of companies “with provincial objects”
2) Property and civil rights
3) Matters of private nature

Question 3

McDonald

Discuss
Citizens Insurance Co v Parsons (1881)

Answer 3

TRUC : Citoyen : Constitution.
-company questioned the CONSTITUTION validity of the Ontario Fire Insurance Policy Act

• Argued that because COMMERCE is of federal authority, province cannot pass the Act.
• Argued that Province cannot act to diminish status of a federally incorporated company
• Privy Council saw commerce as only inter-provincial, not intra-provincial
• Legislation properly passed due to authority to regulate PROPERTY AND CIVIL RIGHTS.
• Privy Council confirmed that the Act is valid.

Question 4

McDonald

Discuss
Insurance Reference Case (Attorney General for Canada v Attorney General for Alberta) (1916)

Answer 4

-Federal Insurance Act of 1910 required insurers to obtain a licence from federal govt (except for cies incorporated in a province and conducting business in that province only).

• Privy Council decided it is ULTRA VIRES of Federal Government because:
• -TRADE AND COMMERCE do not extend to a licensing system of a particular trade
• -Federal power to legislate for PEACE, ORDER AND GOOD GOVT OF CANADA cannot trespass over Provincial power to legislate on CIVIL RIGHTS in the Province.

-A provincial insurer can operate in another province as long as that province has granted its permission, without having a federal license.

• PROVINCIAL cie has capacity but not the right to do business outside its province
• FEDERAL cie has both capacity and right to do business outside its province
• FOREIGN cie must obtain federal license to do business in any single province

Question 5

McDonald

Discuss
Re the Insurance Act of Canada (1932)

Answer 5

A tax is imposed on policyholders of British/foreign companies that are not licensed under Federal Insurance Act
Privy Council invalidated this.
Seen as an attempt to interfere with insurance which is provincial power.

Question 6

McDonald

Discuss
Canadian Indemnity Company v Attorney-General of BC (1977)

Answer 6

• BC created a mandatory auto insurance plan
• BC refused to renew the licenses of insurers doing business in the province
• Supreme court confirmed BC’s power to do so.
• Insurers argued that the matter was within the exclusive federal jurisdiction under TRADE AND COMMERCE
• They also argued that the legislation interfered with the status of federally incorporated companies.

Question 7

McDonald

4 concerns of FEDERAL legislation regarding financial soundness of insurers

Answer 7

1) Periodic report of financial condition of the company
2) Conditions for entry into insurance business
3) Control of investment, calculation of assets and claim liabilities
4) matters other than those related to control of insurance that can protect the interest of the policyholders.

Question 8

McDonald

5 insurance CONTRACT matters of provincial legislation

Answer 8

1) Contents of insurance policy
2) Insurable interest
3) Contract taking effect
4) Payment of premium
5) Duty to disclose
6) Incontestability
7) Reinstatement
8) Designation of beneficiaries
9) Insured dealing with the contract

Question 9

McDonald

3 insurance TRANSACTION matters of provincial legislation.

Answer 9

1) claims procedure
2) unfair practice
3) licensing of agents

Question 10

McDonald

Who presides OSFI?
Who appoint SI?

5 Acts administered by OSFI.

Answer 10

presided by Minister of Finance.
Governor General appoint Superintendent

1) Insurance Company Act
2) Bank Act
3) Investment company Act
4) Trust and Loan Company Act
5) Cooperative Credit Association Act

Question 11

McDonald

What is the Blue Book?

Answer 11

Annual report presented by OSFI containing financial data of Canadian insurers registered with OSFI.

Question 12

McDonald

Discuss
ICA (Insurance Companies Act)

Answer 12

• Applies to all insurers under Federal Charter
• Provides a modern framework by which insurers are regulated
• Enlarge lending and investment powers of insurers
• Also gives new powers to diversify
• Also allows flexibility to raise money by issuing shares or borrowing
• Insurers should grow stronger and compete internationally
• Revised every 10 years

Question 13

McDonald

6 considerations from the Minister in order to decide whether to incorporate an insurance company under the Act.

Answer 13

1) NATURE and SUFFICIENCY of financial resources
3) SOUND BUSINESS PLAN
4) BUSINESS RECORD of the applicant
5) COMPETENCE and EXPERIENCE of those who operate the company
6) Whether it is in the BEST INTEREST OF FINANCIAL SYSTEM in Canada
7) that CANADIAN INSURERS are treated favorably in province where foreign insurers operates

Question 14

McDonald

Requirement for foreign insurance companies to hold adequate assets in Canada under the Insurance Company Act

Answer 14

must have asset vested in trust in Canada and controlled by Chief Agent or Minister of Finance

Question 15

McDonald

Discuss:
Reference re Reciprocal Insurance Legislation, Attorney-General for Ontario v Reciprocal Insurers (1924)

Answer 15

• In 1917, Parliament passed a new Federal Insurance Act
• Federal tried to amend Criminal Code to make it a offense to accept INSURANCE RISK if not licensed under Federal Insurance Act
• PRIVY COUNCIL decided that these amendments were invalid.

Question 16

McDonald

4 regulatory requirements that a foreign company must meet to start a branch in Canada

Answer 16

1) make a contribution to financial system in Canada
2) Canadian insurers must be treated as favorably in the province where foreign insurer operates
3) must appoint a Chief Agent
4) must appoint an auditor and an actuary
5) must have assets vested in trust and approved by SI