McD.Intro

Question 1

Identify 4 federal areas of exclusive authority.

Answer 1

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

Question 2

Identify the 4 provincial areas of exclusive authority.

Answer 2

1. Civil property rights
2. Incorporation of companies with Incorporation provincial objects
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 :
   ex:Policy contents; Premium payment
2. Transaction matters
   ex:Unfair practices ; Licensing of agents

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 procedures
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

licensing (prov) vs trade & commerce (Fed)

Question 9

What was the ‘Citizen’s v Parsons’ case about : Facts (2) , Issues (2 reasons) ,Ruling (2 reasons)

Answer 9

Facts:
- Province ability to pass legislation that applies to a federally regulated insurer
- Insurer challenged Ontario’s Fire Insurance Act, which mandated statutory conditions for fire policies

Issues: Is ON Fire Act ultra vires?
1. Insurer argued insurance fell under federal Trade and Commerce power
2. Insurer claims province can't legislate to deprive federally incorporated insurer of status & capacity

Ruling: ON Fire Act is intra vires since:
1. Trade means inter-provincial, not intra-provincial
2. Status & capacity unaffected since insurers are all treated equally, regardless of incorporation location

Outcome: Legislation was intra-vires since it relates to provincial civil & property rights.

Fact: ON passed a law that dictated specific, mandatory terms for all fire insurance policies. A federally incorporated insurance company challenged the law, arguing the province didn’t have the power to tell it what to put in its contracts

Question 10

Briefly describe the Insurance Reference Case (AG Can v AG AB).: Facts, Issue, Ruling(+3 clarifications)

Answer 10

Facts:
Federal government introduces law that requires insurer to be federally incorporated if they want to operate in more than 1 province. AG Alberta challenged constitutionality of that law.

Issue:
- is this act intra-vires / ultra-vires ?

Ruling: ultra-vires as interferes with licensing system:

a. Provincial incorporated insurers have capacity but not right to operate in another province without other provinces’ permission.
b. Federally incorporated insurers have the capacity and rights to operate in multiple provinces.
c. Foreign companies can be required to be licensed federally to operate in provinces, even if they only want to operate in one province.

Question 11

In the Insurance Reference Case, what was the conclusion regarding an insurer’s right to operate in other provinces? (3)

Insurance Reference Case=AG Can v AG AB

Answer 11

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.

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 12

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 12

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

Question 13

Briefly describe the ‘CIC v AG(BC)’ case - Facts, Issue (2 arguments), Ruling

Answer 13

Facts:
BC legislature establishes compulsory public auto insurance plan and refuses license renewal of private insurers.
Insurers sue.

Issues: The insurers claimed BC legislation was Ultra Vires, because:
* It relates to the regulation of trade and Commerce, which is federal.
* The province cannot legislate to deprive federally incorporated insurer of status & capacity.

Rulings: Legislation is intra vires.
BC legislature acted within its powers.

Question 14

Identify 3/5 areas under federal insurance regulation.

Answer 14

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

(Hint: CIRC-P)

Question 15

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 15

• 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 16

Identify 3 reasons for insurance regulation in Canada.

Answer 16

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