McD.Intro

Question 1

Identify 4 federal areas of exclusive authority.

Answer 1

1. Regulation of trade & commerce
2. Taxation
3. Banking
4. Bankruptcy & insolvency
5. Aliens & naturalization
6. Criminal Law

Question 2

Identify the 4 provincial areas of exclusive authority.

Answer 2

1. Provincial taxes
2. Civil property rights
3. Hiring & supervising provincial employees
4. Operating jails & hospitals

Question 3

Briefly explain the term ‘intra-vires’

Answer 3

Within the powers of a particular government

Question 4

Briefly explain the term ‘ultra-vires’.

Answer 4

Beyond the powers of a particular government.

Question 5

Identify the 2 areas/matters under provincial insurance regulation.

Answer 5

1. Contract matters
2. Transaction matters

Question 6

Identify 4 examples of contract matters under provincial insurance regulation.

Answer 6

1. Policy contents
2. Policy terms (includes effective date)
3. Premium payment
4. Insurable interest
5. Reinstatement
6. Designation of beneficiaries

Question 7

Identify the 3 transaction matters under provincial insurance regulation. (Hint: AUC)

Answer 7

1. Agent licensing
2. Unfair practices
3. Claims handling
4. Brokage fees

Question 8

True or False?
It would be feasible to replace provincial regulation of auto with federal regulation.

Answer 8

False:

• This would be ultra-vires for the federal government
• Insurance Reference Case says regulation of commerce doesn’t cover licensing a particular trade

Question 9

What was the ‘Citizen’s v Parsons’ case about?

Answer 9

Province ability to pass legislation that applies to a federally regulated insurer

Insurer disputes ON’s Fire Insurance Act:
The Act is required certain statutory conditions for fire policies in ON

Question 10

What were the issues in the ‘Citizen’s v Parsons’ case?

Answer 10

Is ON Fire Act ultra-vires?
(relates to regulation of trade, which is federal)

Insurer claims province can’t legislate to deprive federally incorporated insurer of status & capacity

Question 11

What was the rulings (2) of the ‘Citizen’s v Parsons’ case?

Answer 11

• The Ontario Fire Insurance Policy Act was deemed to be intra‐vires
  *Trade is inter‐provincial, not intra‐provincial
• Status & capacity unaffected since insurers are all treated equally, regardless of incorporation location

Question 12

Briefly describe the Insurance Reference Case (AG Can v AG AB).

Answer 12

Federal government introduces law that requires insurer to be federally incorporated if it wants to operate in more than 1 province.

AG Alberta challenged constitutionality of that law.

Question 13

What was the issue in the Insurance Reference Case (AG Can v AG AB)?

Answer 13

Is this version of the Federal Insurance Act intra-vires/ ultra-vires?

Question 14

What was the ruling in the Insurance Reference Case (AG Can v AG AB)?

Answer 14

1. Privy Council ordered this is ultra vires for federal to interfere with licensing system.
2. The provincial incorporated insurers have capacity but not right to operate in another province without other provinces’ permission. Federally incorporated insurers have the capacity and rights to operate in multiple provinces.
3. Foreign companies can be required to be licensed federally in order to operate in provinces, even if they only want to operate in one province.

Question 15

In the Insurance Reference Case, what was the conclusion regarding an insurer’s right to operate in other provinces?

case: AG Can v AG AB

Answer 15

Provincial insurer has the capacity, but not the right to operate in another province if he has the permission to do so by the other province.

Federal insurer has both the capacity and right to operate in any province.

Question 16

In the Insurance Reference Case, what was the conclusion regarding a foreign insurer’s right to operate in Canada?

case : AG Can v AG AB

Answer 16

Federal government can require a federal license for a foreign insurer even if the foreign insurer is operating in only 1 province.

Question 17

Briefly describe the ‘CIC v AG(BC)’ case

Answer 17

Elimination of private auto insurance in BC

• > BC legislature establishes compulsory public auto insurance plan
• > Legislature refuses license renewal of private insurers
• > Insurers sue

Question 18

What was the issue in the CIC v AG(BC) case?

Answer 18

Insurers claimed BC legislation is ultra-vires because:

• It relates to regulation of trade, which is federal
• Province can’t legislate to deprive federally incorporated insurer of status & capacity

Question 19

What was the Supreme Court ruling in the CIC v AG(BC) case?

Answer 19

BC legislature acted within its powers (legislation is INTRA VIRES)

Question 20

Identify 5 areas under federal insurance regulation. (Hint: CIRC-P)

Answer 20

1. Conditions for entering business
2. Investments
3. Reporting
4. Calculation of assets & reserves
5. Protection of policyholders

Question 21

Identify 3 considerations OSFI look at in an insurer’s application for corporation?

(i.e. what does the Minister of Finance consider when deciding whether to issue a letters patent)

Answer 21

• financial resources (must be sufficient)
• business plan (detailed & realistic)
• business record of applicants (check for past bankruptcies)
• Character, Competence, Experience of management
• Positive effect on Canadian financial system (jobs, GDP growth)
• if owned by a foreign parent, OSFI must be satisfied that subsidiary will be treated fairly

Question 22

Identify 3 reasons for insurance regulation in Canada.

Answer 22

1. Prevent insolvencies
2. Prevent undesirable business practices
3. Consider economic impact on Canada