Regulation of the Insurance Industry Questions with correct Answers
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Course
Bcia
Institution
Bcia
Regulation of the Insurance Industry Questions with correct Answers
Two Reasons (describe in detail) why we need to regulate the insurance industry
1. Because of power imbalance (we need to protect consumers
- insurance companies have all of the money
- insurance companys target average people...
Regulation of the Insurance Industry
Questions with correct Answers
Two Reasons (describe in detail) why we need to regulate the insurance industry -
answer 1. Because of power imbalance (we need to protect consumers
- insurance companies have all of the money
- insurance companys target average people who do not have a sense of contracts or
buisness transactions
- the agenst work based on commission
- potential exploitation of vulnerable parties
- people go to insurance companies when they have suffered a detrimental incident
2.solvency of insurers is important (the more insurance companies remain the more we
can loss spread)
- it is importance to have confidence in the system
what parts of the insurance industry regulated (Coffe) - answer 1. The formation and
operation of insurance companies is regulation
2. contents and enforceability of insurance contracts
What portions of the contents and enforceability of insurance contracts are regulated -
answer 1. terms and conditions
2. obligations of parties to insurance contract
3. the qualifications and responsibilities of intermediaries
Jurisdiction for Regulating Insurance Industry
what s.92/s.91 regulate what aspects of the insurance industry - answer s.92(13)
Property and Civil Rights in the Province
s.91(2) Regulation of trade and commerce
If we have a national insurance company do provincial regulations apply to that
company - answer YES!
Federal incorporation determines what kind of business you can engage in but if you
have the right to sell insurance then you have to pay by the provincial rules
Indemnity Co (IC) v British Columbia (BC) - answer Federally incorporated insurance
companies previously licensed to sell auto insurance in BC, unsuccessfully challenged
provincial statutes (compulsory auto insurance) in BC and monopoly for ICBC to provide
auto insurance
Canadian Indemnity Co Rule: - answer The province decides the regulation for
Insurance Companies under s.92(13)
, When are provincially incorporated companies subject to federal legislation - answer
one way is through bankruptcy and insolvency
Ontario (AG) v Policy Holders of Wentworth Rule (Went Worth Aint Worth): - answer
the federal Winding up (insolvency Act) Super seeds priority of provincial insurance act
Describe how the federally incorporated companies (that are not soul insurance
providers) are regulated when providing insurance - answer > Chartered banks
federally incorporated
> If your principal business is financial services
> Where insurance services are incidental to banks principle business, as long as the
bank can still do business under federal regulation then the province can still regulate
the question is if if the insurance product is incidental to the banks core business to
warrant the exeption
> In BC we have provincial regulations that exempt banks and their reps from provincial
regulations regarding insurance where that insurance is incidental to banks core
business
Bank of Nova Scotia V Canada (Facts) - answer Facts: telemarketers selling
insurance on credit card debt. it is not a bank teller selling the insurance, the sales have
been outsourced - it is also sold after the person has bought the credit card
Bank of Nova Scotia (Issue) - answer do the provincial licensing requirements for
insurance sales people apply to the telemarketers (do they have to stop selling
insurance)
Defined in Bank of Nova Scotia
Incidental:
Insurance Agent: - answer Insurance Agent: includes telemarketers who sell
insurance, the important part of the term insurance agent within the act is that they are
"soliciting" which re Sharp in the dictionary/ ordinary sense of the word means to "make
appeals or request to" which since they have a script is exactly what they are doing
Incidental: means meaningful connected, it does not matter if it is sold to you some time
after the main banking product.
Canadian Western Bank v Alberta - answer Chartered banks offering insurance
products is NOT exempt from provincial licensing requirements
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