British Columbia Holds Consultation on Restricted License Regime for Casualty Insurance Dealers | JD Supra

British Columbia Ministry of Finance they are talking on the implementation of its proposed legislation to license casualty insurers. The proposals are similar to those already in place in the other three western provinces (and, more recently, in New Brunswick) but BC has indicated that it would consider including additional industries and additional flexibility in its administration. BC businesses that see an opportunity in this area should consider making a submission, which is due by October 3, 2022.

The authorization of restricted insurers is provided in s. 174.1 BCE Financial Institutions Amendment Act, 2019, which will be declared effective once the details of the prohibited legislation have been finalized. As explained in application formThe BC discussion focuses on the laws and regulations that will accompany the legislation, particularly on the following issues:

  • The classes for people with restricted licenses (for example, the types of businesses eligible for restricted licenses);
  • The insurance classes which may be sold under a restricted license; and
  • How the new government will affect existing exemptions under the Insurance Licensing Exemptions Regulation.

Some of the topics raised in the consultation may be included in the Insurance Council of BC’s by-laws or in general rules and regulations. The Insurance Board will discuss separately the rules that have been issued.

Restricted Groups

The BC Ministry of Finance is planning a “restricted licence” while others business classes may be granted insurance licenses that are limited to insurance classes that are “carried on in the ordinary course of business of the licensee”.

Under similar jurisdictions to those in Alberta, Saskatchewan and Manitoba (and planned for New Brunswick), business groups for which restricted insurance licenses may be issued include:

  • Financial institutions – credit protection, travel and life insurance;
  • Transport companies – travel and cargo insurance;
  • Travel agencies – travel insurance;
  • Cars, RVs, watercraft and other vehicles and equipment – liability protection, equipment warranty and property protection insurance;
  • Investment and mortgage companies – credit protection insurance;
  • Customs brokers and freight forwarders – cargo insurance;
  • Funeral business – funeral insurance;
  • Car rental agencies (and other vehicles) – rental car insurance; and
  • Mobile electronics dealers – portable electronics insurance.

Although the Ministry of Finance recognizes the need for consistency between regions, it does not preclude the possibility of removing some of the above, or adding some or all of them:

  • Storage companies – personal policies;
  • Event companies and ticket vendors – event cancellation policies;
  • Rental companies (personal property and office furniture) – damage protection and product warranty policies;
  • Rental companies (equipment, vehicles, heavy machinery) – vehicle or property warranty policies;
  • Educational institutions – travel medical policies for out-of-district students; and
  • Tour operators and public transport (airlines, bus companies, cruise lines) – travel disruptions or restrictions.

The BC administration may differ from other provinces in one important matter: the Ministry of Finance has said that it is willing to consider the possibility of issuing restricted licenses to BC license holders to sell their own insurance groups. noaccidentally to their businesses. For this to happen, the Ministry must ensure the benefits to consumers.

The Future of the Existing ILER Exemption

The Ministry of Finance is proposing that some people who have been exempted should be exempted under this law Insurance Licensing Exemptions Regulation (“ILER”) be removed in part or in whole. When this happens, companies that are not licensed by the ILER for the following may need to obtain one of the new restricted licenses:

  • Product warranty insurance;
  • Credit insurance (sold by credit unions, mortgage lenders and others);
  • Car insurance (sold by car dealers);
  • Travel insurance (sold by travel agents or transport companies); and
  • Funeral insurance (sold by funeral directors).

An example of the activities of a pay back a little it would be to reserve goods below a certain price but would require a restricted license to be issued above that price.

Insurance Classes

The Ministry of Finance is considering issuing a definitive permit insurance classes under the licensing laws (including license classes discussed above). In doing so, they would be following the instructions of other regions, but the Ministry of Finance is clear that it cannot name exactly the same groups of insurance. In addition, some classes that are not currently covered by the ILER may be allowed under restricted rules.

In addition to the above, the Ministry is considering including the following categories of insurance in the restrictive legislation:

  • Personal property insurance (storage companies);
  • Buying protection insurance (retailers, credit card companies);
  • Marine craft rental insurance (marine craft rental companies);
  • Insurance against damage (rental companies and office furniture); and
  • Event cancellation insurance (event and ticketing companies).

Application Questions

The Ministry of Finance is looking for input from interested parties, including (but not limited to) industry input on questions such as:

  • Which businesses should and should not be listed as potential licensees?
  • Which classes of insurance should be covered and which should not be covered?
  • Which ILER restrictions, if any, should be removed in lieu of licensing a new insurance agent (and should the removal be full or partial)?
  • When (if at all) should it be given up on the prospect that restricted license holders will be limited to insurance groups that are limited to their ordinary business?
  • Should there be license bans for cheap products?
  • Should there be a fixed price for insurance (or other types of insurance) sold by licensed insurers?
  • Would the proposed method be valid for any group of restricted agents (ie, an example where the insurance could not be issued until several days after the initial purchase)?
  • What rules must be followed when conducting a restricted insurance business (such as disclosures, cooling-off periods, commissions and fees, etc.)?

Please check application form for a complete list of questions for which comment is sought.

Next Steps

As mentioned above, the discussion with the people is ongoing, and comments left or before October 3, 2022. The open and flexible approach of the Ministry of Finance shows that the outsourcing of companies can have a significant impact on how the licensing system is regulated.