Province of Alberta INSURANCE ACT MISCELLANEOUS INSURANCE PROVISIONS REGULATION Alberta Regulation 120/2001 With amendments up to and including Alberta Regulation 2/2016 Office Consolidation Published by Alberta Queen s Printer Alberta Queen s Printer 7 th Floor, Park Plaza 10611-98 Avenue Edmonton, AB T5K 2P7 Phone: 780-427-4952 Fax: 780-452-0668 E-mail: qp@gov.ab.ca Shop on-line at www.qp.alberta.ca
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(Consolidated up to 2/2016) ALBERTA REGULATION 120/2001 Insurance Act MISCELLANEOUS INSURANCE PROVISIONS REGULATION Table of Contents 1 Definitions 2 Prescribed accident benefits 3 Prescribed entities and benefits for s15, Act purposes 3.1 Prescribed benefits for s15.1, Act purposes 3.2 Prescribed classes of insurance 3.3 Prescribed information re group and creditor group insurance 4 Household appliance insurance exemption 5.1 Calgary Real Estate Board Critical Illness Society exemption 5.2 Farm Implement Fund exemption 5.3 Canadian Blood Services Exemption 5.4 The Alberta New Home Warranty Program 6 Definition of financial institution 7 Financial responsibility cards 7.1 Third party liability 8.1 Term of licence 9 Repeal 10 Expiry 11 Coming into force Definitions 1 For the purposes of the Act, (a) base capital means (i) shares that (A) are non-cumulative, non-retractable, non-redeemable and, if convertible, are only convertible into common shares, and (B) have been issued and paid for, (ii) contributed surplus, and
Section 2 PROVISIONS REGULATION (iii) retained earnings; (b) total assets means total assets calculated by adding the book value of all assets on an unconsolidated basis, and for that purpose book value must be calculated in accordance with the principles, standards and practices in effect under section 219 of the Act. Prescribed accident benefits 2 The prescribed accident benefits for the purposes of section 33 of the Act are the benefits provided for in section 573 of the Act or in regulations made under section 573(7)(c). s2;2/2016 Prescribed entities and benefits for s15, Act purposes 3(1) The following are the prescribed entities for the purposes of section 15 of the Act: (a) an employer with employees who are resident or employed in Alberta; (b) an association, or the trustees or the principals of an association, plan, trust or fund, that provides the benefits referred to in subsection (2) to its members or participants who are employees resident or employed in Alberta of one or more employers that participate directly or indirectly in that association, plan, trust or fund; (c) any combination of 2 or more persons referred to in clauses (a) and (b) or either of them. (2) The benefits prescribed for the purposes of section 15 of the Act are any medical care or goods or services for employees or former employees that are not provided under the Alberta Health Care Insurance Act or are provided after the limits for that care or those goods or services under the Alberta Health Care Insurance Act have been reached. s3;180/2001;287/2003 Prescribed benefits for s15.1, Act purposes 3.1 The benefits prescribed for the purposes of section 15.1(2) of the Act are (a) any short or long term income replacement benefits, and 2
Section 3.2 PROVISIONS REGULATION (b) any benefits under a pension plan that is registered under the Income Tax Act (Canada). AR 287/2003 s3 Prescribed classes of insurance 3.2 For the purposes of section 819.1(1) of the Act, legal expense insurance, property insurance and liability insurance are prescribed classes of insurance. AR 146/2011 s2 Prescribed information re group and creditor group insurance 3.3 The prescribed information for the purposes of sections 642(8)(b) and 699(8)(b) of the Act is information in a policy of group insurance or creditor group insurance that, if disclosed, would reveal (a) confidential commercial information that a reasonable person would think could harm the competitive position of the insurer or insured, or (b) plan design and benefits information relating to different classes of debtor insured, group life insured or group persons insured covered in the same policy. AR 146/2011 s2 Household appliance insurance exemption 4(1) In this section, (a) household appliance includes home entertainment equipment and personal computers, but does not include (i) furnaces, (ii) air conditioners, (iii) hot water tanks, or (iv) swimming pool heating units; (b) household appliance insurance means a contract of insurance that indemnifies a person who has an interest in a household appliance against the appliance s malfunction, failure or breakdown. (2) The Act does not apply to household appliance insurance if the total consideration payable for the insurance is $200 or less. 3
Section 5.1 PROVISIONS REGULATION 5 Repealed AR 91/2006 s2. Calgary Real Estate Board Critical Illness Society exemption 5.1(1) The Act does not apply to the benefits in respect of critical illness provided under the by-laws of the Calgary Real Estate Board Critical Illness Benefit Society if (a) the members of the Society are notified within a reasonable time after the coming into force of this section or becoming a member, as the case may be, that the benefits are exempt from the Insurance Act and that the members are not entitled to the same protections they would be entitled to if the benefits were subject to the Act; (b) the constitution and by-laws of the Society provide that (i) the annual financial statements of the Society must be audited by a professional accounting firm that is registered under the Chartered Professional Accountants Act and authorized to perform an audit engagement; (ii) repealed AR 257/2005 s2; (c) the Society submits to the Superintendent of Insurance a copy of its audited financial statements within a reasonable time after the end of the fiscal period to which they relate. (d) repealed AR 257/2005 s2. (2) Repealed AR 257/2005 s2. AR 213/2001 s2;257/2005;2/2016 Farm Implement Fund exemption 5.2(1) The Act does not apply to the Farm Implement Board or to the Fund that the Board holds pursuant to the Farm Implement Act. (2) The Board must submit to the Superintendent of Insurance a copy of the Fund s audited financial statements within 60 days after the end of the fiscal year to which the statements relate. AR 374/2003 s2 Canadian Blood Services Exemption 5.3(1) In this section, (a) CBSE means Canadian Blood Services Captive Insurance Company Limited; 4
Section 5.4 PROVISIONS REGULATION (b) CBSI means Canadian Blood Services Insurance Company Limited; (c) contract includes an amendment or renewal of a contract. (2) Contracts of insurance issued by CBSI or CBSE before or after this section comes into force are exempt from the application of the Act. (3) The exemption under this section is terminated if, at any time after this section comes into force, CBSI or CBSE issues a contract of insurance to insure a risk in Alberta that has not been approved in advance by the Superintendent of Insurance. AR 15/2007 s2 The Alberta New Home Warranty Program 5.4(1) In this section, (a) contract includes an amendment or renewal of a contract; (b) Program means The Alberta New Home Warranty Program. (2) Contracts of insurance issued by the Program before or after this section comes into force are exempt from the application of the Act. (3) The exemption under this section is terminated if, at any time after this section comes into force, the Program breaches any of the following conditions: (a) the Program must maintain adequate capital and adequate and appropriate forms of liquidity, as determined by the Superintendent of Insurance; (b) the Program must maintain base capital, in the amount considered adequate in the opinion of the Superintendent of Insurance; (c) the Program must only issue contracts of insurance in Alberta that have been approved in advance by the Superintendent of Insurance; (d) the Program must maintain a consumer complaint and reporting system satisfactory to the Superintendent of Insurance, and must provide statistics relating to the system at the request of the Superintendent of Insurance; 5
Section 6 PROVISIONS REGULATION (e) the Program must pay an annual regulatory fee to the Superintendent of Insurance, in an amount determined by the Superintendent of Insurance; (f) the Program must file an annual return within 90 days after the end of the financial year in respect of which the return is prepared and the annual return must include all of the information set out in section 44 of the Act; (g) the assets of the Program must be valued in accordance with the Provincial Companies Regulation (AR 124/2001) as if the Program were a provincial company; (h) the investments of the Program must be invested in accordance with the provisions of Part 2, Subpart 11 of the Act as if the Program were a provincial company; (i) the Program must comply with the provisions of Part 2, Subpart 12 of the Act as if the Program were a provincial company; (j) the Program must comply with sections 113, 114, 115(2) and 116 of the Act as if the Program were a provincial company. (4) Contracts of insurance issued by the Program that are transferred to and assumed by The New Home Warranty Insurance (Canada) Corporation are exempt from the application of the Act. AR 100/2011 s2;2/2016 Definition of financial institution 6(1) In this section, (a) foreign financial institution means an entity that is incorporated or formed other than by or under an Act of the Parliament of Canada or of the legislature of a province and that (i) is engaged in the trust, loan or insurance business, the business of a cooperative credit society or the business of dealing in securities, or (ii) is otherwise generally engaged primarily in the business of providing financial services; (b) securities dealer means a dealer within the meaning of the Securities Act. 6
Section 7 PROVISIONS REGULATION (2) For the purposes of the following provisions of the Act financial institution includes a securities dealer and a foreign financial institution: section 110(3)(b); section 111(a), (c); section 374(1)(b); section 439(1)(c); section 440(g), (j); section 441(2). (3) For the purposes of the following provisions of the Act financial institution includes a securities dealer: section 309(3)(a), (c); section 355(2). (4) For the purposes of section 415(a)(i)(F)(II) and (III) and (ii)(a)(i) and (III) of the Act, financial institution includes a foreign financial institution. Financial responsibility cards 7(1) Where a licensed insurer issues a financial responsibility card under section 822 of the Act, the insurer (a) shall provide a separate card in respect of each vehicle insured under the motor vehicle liability policy, (b) shall, on the request of the insured, provide a copy of the card for each person who commonly drives a vehicle insured under the motor vehicle liability policy, and (c) shall, on the request of the insured, provide a copy of any card issued within the previous two years. (2) For the purposes of section 822(3) of the Act, when an owner s policy is cancelled, the insurer shall inform the former insured that (a) it is an offence to use or be in possession of a financial responsibility card or a copy of a financial responsibility card relating to a motor vehicle liability policy that has lapsed or been cancelled, (b) it is an offence to operate a motor vehicle that is not an insured motor vehicle, and (c) the former insured is required by law to destroy the financial responsibility card and every copy of the card issued to him. 7
Section 7 PROVISIONS REGULATION (3) For the purposes of section 822(3) of the Act, when an insurer gives a notice of renewal in circumstances under which the renewal is conditional on the payment of a further premium failing which the policy will lapse, be cancelled or not be renewed, the insurer shall inform the insured in an attachment to the notice that (a) it is an offence to use or be in possession of a financial responsibility card or a copy of a financial responsibility card relating to a motor vehicle liability policy that has lapsed or been cancelled, (b) it is an offence to operate a motor vehicle that is not an insured motor vehicle, and (c) the insured is required by law to destroy the financial responsibility card and every copy of the card issued to the insured when the insured ceases to maintain the financial responsibility in respect of which the card was issued. (4) A power of attorney referred to in section 824(1)(b) of the Act must authorize the Superintendent of Insurance to accept service of any notice or process for the unlicensed insurer in any action or proceeding against it arising out of a motor vehicle accident in Alberta. (5) In an undertaking referred to in section 824(1)(b) of the Act, the unlicensed insurer shall undertake (a) to appear in any action or proceeding against it or its insured arising out of a motor vehicle accident in Alberta, and of which it has knowledge, (b) on receipt from the Superintendent of Insurance of any notice or process referred to in subsection (4), to forthwith cause the notice or process to be served on its insured, (c) not to set up to any claim, action or proceeding under a motor vehicle liability policy issued by it any defence that it would be prevented from setting up if the policy had been issued in Alberta in accordance with the law of Alberta relating to motor vehicle liability policies, including any defence as to the limit or limits of liability and prescribed accident benefits, and to satisfy up to the limits of liability stated in the policy and, in any event, to an amount not less than the limits of liability fixed in Part 5, Subpart 2 of the Act, any judgment rendered against it or its insured by a court in Alberta which has become final in any such action or proceeding, and 8
Section 7.1 PROVISIONS REGULATION (d) not to issue Canada non-resident interprovince motor vehicle liability insurance cards to persons other than persons who are non-residents of Canada and who are insured with the unlicensed insurer under a contract of motor vehicle liability insurance. (6) For the purpose of section 825 of the Act, the following are prescribed corporations: (a) a corporation that has entered into an agreement or arrangement with the Minister pursuant to section 76(10) of the Financial Administration Act for the purpose of satisfying liabilities that the corporation may incur resulting from bodily injury to or the death of any person or damage to property occasioned by or arising out of the ownership, operation or use of a motor vehicle; (b) a municipal corporation in Alberta that has the power to access and collect property taxes under the Municipal Government Act. (7) Where the Superintendent of Insurance issues a financial responsibility card to a corporation under section 825 of the Act, the Superintendent of Insurance (a) shall provide a separate card in respect of each motor vehicle registered in the name of the corporation, (b) shall, on the request of the corporation, provide a copy of the card for each person who commonly drives a motor vehicle registered in the name of the corporation, and (c) shall, on the request of the corporation, provide a copy of any card previously issued to the corporation. s7;91/2006;15/2007;2/2016 Third party liability 7.1(1) In this section and for the purposes of section 596 of the Act, (a) additional insured means a partner, officer or employee of an insured named in a S.P.F. No. 6 Standard Non-Owned Automobile Policy; (b) lessee means a person to whom a lessor leases or grants exclusive use of a motor vehicle; (c) lessor means a lessor as defined in section 187 of the Traffic Safety Act; 9
Section 7.1 PROVISIONS REGULATION (d) rentee means a person to whom a renter rents a motor vehicle; (e) renter means a renter as defined in section 187 of the Traffic Safety Act. (2) Notwithstanding section 596(1) of the Act, if a leased or rented automobile is a motor vehicle as defined in section 1(1)(x) of the Traffic Safety Act and section 187 of the Traffic Safety Act applies, the following rules determine the order in which the third party liability provisions of any available motor vehicle liability policies shall apply in respect of liability arising from or occurring in connection with the ownership or, directly or indirectly, with the use or operation of the leased or rented automobile on or after the day this section comes into force: (a) subject to clause (b), insurance available under a contract evidenced by an owner s policy issued to the lessor or renter is first loss insurance; (b) clause (a) does not apply if there is (i) insurance available under a contract evidenced by a motor vehicle liability policy under which the lessee or rentee of the automobile is entitled to indemnity as an insured named in the contract, or (ii) insurance available under a contract evidenced by a motor vehicle liability policy under which the driver of the leased or rented automobile is entitled to indemnity (A) as an additional insured, (B) as an insured named in the contract, (C) as the spouse or adult interdependent partner of an insured named in the contract who resides with that insured, or (D) as an unnamed insured and an insurer under a contract described in this clause acknowledges in writing to an insurer under a contract described in clause (a) that the first mentioned insurer is responding to a claim or civil action on behalf of the lessee, rentee or driver; (c) if clause (a) does not apply, (i) insurance described in clause (b)(ii)(a) is first loss insurance; 10
Section 7.1 PROVISIONS REGULATION (ii) insurance described in clause (b)(i) is excess insurance to insurance described in clause (b)(ii)(a); (iii) insurance described in clause (b)(ii)(b) is excess insurance to insurance described in clause (b)(i); (iv) insurance described in clause (b)(ii)(c) is excess insurance to insurance described in clause (b)(ii)(b); (v) insurance described in clause (b)(ii)(d) is excess insurance to insurance described in clause (b)(ii)(c); (vi) insurance described in clause (a) is excess insurance to insurance described in clause (b); (vii) if more than one person is entitled to indemnity under a contract evidenced by one motor vehicle liability policy, each person is deemed, for the purposes of this clause, to be entitled to indemnity under a separate contract evidenced by a motor vehicle liability policy; (d) if clause (a) applies because an insurer under a contract described in clause (b) fails to respond on behalf of the lessee, rentee or driver to a claim or civil action, that insurer is liable to indemnify an insurer under a contract described in clause (a) for any liability, costs and expenses incurred as a result of such failure; (e) if an insurer under a contract described in clause (b) fails to respond to a claim or civil action on behalf of a lessee, rentee or driver, that insurer is liable to indemnify another insurer that does respond to the claim or civil action under a contract described in clause (b) for any liability, costs and expenses incurred as a result of the failure if, according to clause (c), insurance described in the contract of the insurer who does respond is excess to insurance available under the contract of the insurer who fails to respond. (3) Notwithstanding section 563 of the Act, the right of a person insured by but not named in an owner s policy issued to a lessor or renter to recover indemnity is limited to the maximum amount for which the lessor or renter of the motor vehicle is liable in respect of the same incident in its capacity as lessor or renter as determined by section 187 of the Traffic Safety Act. (4) For the purposes of subsection (2), (a) if more than one motor vehicle liability policy is required to respond and the priority between those policies is not 11
Section 8.1 PROVISIONS REGULATION determined by subsection (2), each insurer is liable only for its rateable proportion of any liability, expense, loss or damage, and (b) rateable proportion means rateable proportion as defined in section 596(3) of the Act. AR 203/2010 s2;2/2016 8 Repealed AR 374/2003 s3. Term of licence 8.1 A licence issued pursuant to section 27 of the Act expires on December 31 of the year in which it is issued or renewed. AR 2/2016 s8 Repeal 9(1) The Exemption Regulation (AR 287/96) is repealed. (2) The Definition of Capital Regulation (AR 286/96) is repealed. Expiry 10 For the purpose of ensuring that this Regulation is reviewed for ongoing relevancy and necessity, with the option that it may be repassed in its present or an amended form following a review, this Regulation expires on April 30, 2019. s10;91/2006;2/2016 Coming into force 11 This Regulation comes into force on the coming into force of any provision of the Insurance Act (SA 1999 ci-5.1). 12
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