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Bill 11 – Insurance Amendment Act, 2008

October 16, 2008 - Committee of the Whole

Ms Blakeman: Thank you very much, Mr. Chairman. Citing Beauchesne…

The Chair: On amendment A1.

Ms Blakeman: Actually, this is a request, Mr. Chairman. Referencing Beauchesne 688 on page 205, I’d like to ask that this amendment be severed and voted on in four pieces, please, the first being that that is designated as A, the second being B(a), the third being B(b), and the fourth being B(c). Without being able to work my way through this, I don’t want to vote against it all because of one little piece I don’t like, so I’m asking that this be severed into the four sections. That request has always been honoured in the House.

Mr. Weadick: That’s acceptable.

The Chair: That’s acceptable.

Amendment A1A

Ms Blakeman: Great. Thanks very much. So we have these amendments in front of us now. I was curious about the striking out of the word “fire” wherever it occurred and substituting “property.” This is specific to section 18. I have to admit that I’m a little curious about this. Essentially, section 18 was amending 82(1). Section 18 as I’m reading it appears on the bottom of page 6, so it’s actually amending section 82(1) in the original act. What’s being struck out there is “standard owner’s policy referred to” in a different section or “standard garage policy” and substituting “motor vehicle liability policy, except the type of insurance provided in a standard excess automobile policy or standard non-owned automobile policy.”

This doesn’t look right to me. Am I looking at the right section 18? It’s not talking about fire particularly. If I reference the explanatory notes that appear on the explanatory note page, it’s referencing section 82(1): “No reciprocal insurance exchange may be licensed to undertake the type of automobile insurance that is evidenced by a standard owner’s policy referred to in section 610(6) or a standard garage policy.” I’m sort of wondering what this is referring to because I can’t find the reference. You know, it’s a thick act, and it’s possible that there are two sections 18 in here. There could be a section 18 that appears as part of the whole section 5. No, that numbering starts in the 500 range. I’m not quite sure what’s being amended here. So if I could get that question answered for starters.

The second part of that is that when we look at striking out “fire” and replacing it with “property,” I’m wondering if this is actually expanding the coverage that people are getting or if it’s taking something away from them. According to the notes that I saw from the sponsoring member, it was supposed to be expanding it. It should imply that damage to property, instead of that being caused exclusively by fire, would now be included under the insurance coverage, and that should expand the scope, but I need that – hang on. It’s sections 83 and 98, not 82. Well, that’s interesting because in the actual act it’s referencing 82. What the heck is going on here?

An Hon. Member: Call the question.

Ms Blakeman: No. Now I’m really not going to call the question because in the act section 18 is referencing section 82(1), but in the amendment that the member has brought forward, it’s referencing section 83.

Mr. Hancock: They’re adding 18.1, which amends 83 and 98.

Ms Blakeman: I’m getting a little help here from the Government House Leader, who is suggesting that they’re adding 18.1, which would now reference 83 and 98 as well as the original 18, which references 82(1).

Mr. MacDonald: Are they confused?

Ms Blakeman: Well, no. Okay. So I will take my seat and allow the sponsoring member to answer that first question while I double check that what the Government House Leader has offered up is likely. I am looking for an answer from the sponsor on the expansion, whether this is an expansion or whether it could be interpreted by the courts to be a limiting of coverage.

The second thing is that at some point in his opening remarks he referenced a Supreme Court ruling, and I’m wondering which Supreme Court ruling that is because the only one I was aware of in connection with this particular Insurance Act was the one that came through in 2003. That was the appeal case on KP Pacific Holdings Ltd. versus Guardian Insurance Company, and this was about the time frame. If I could get a reference or if he can make me a photocopy and send that, that would be great. So that’s my first question, and I’ve got more to come.

The Chair: The hon. Government House Leader.

Mr. Hancock: Thank you, Mr. Chairman. Perhaps I can help the hon. member out with respect to her first piece. The A portion of the amendment references the addition of section 18.1. That section would say that sections 83 and 98 of the Insurance Act are amended by striking out “fire” wherever it occurs and substituting “property.”

Section 83, for example, of the Insurance Act references fire insurance. In the context of that, it says, “the Minister must not issue a licence to a reciprocal insurance exchange that authorizes the exchange to undertake fire insurance unless the Minister is satisfied,” et cetera. It’s taking “fire insurance,” which is a specific, and inserting the word “property” to make it “property insurance,” which is broader. So the amendment broadens.

I’ll let the hon. sponsor of the bill refer to what case it was that suggested that the reference should be broader, but fire insurance is one form of damage to property, so property insurance would be a broader, more inclusive reference. So these two sections are being amended to change “fire” to “property” to broaden the context about what kinds of damage to property might be covered.

Ms Blakeman: Okay. The reference to the Supreme Court: is that forthcoming?

Ms Evans: Could we go on to something else? I’m waiting for a response directly, and I’d like to make sure that we are accurate in delivering it.

Ms Blakeman: I appreciate the minister’s attention to detail. Thank you.

Amendment A1B(a)

Ms Blakeman: Yes. The second vote is on section B, the first part, which in the amendment as presented appears as (a). Essentially, this is dealing with life insurance. I understand that this is a wording change, and it’s essentially administrative in nature. My research says that there’s no alteration to the meaning and intent, and I’m fine with it. I don’t think it changes substantially what we’re attempting to do here, so I’m okay with it.

Amendment A1B(b)

Ms Blakeman: Okay. The third vote is on section B(b) in the original amendment. It is adding in a new section that talks about evidence. I think what we had before was that if they didn’t have everything they needed, the court could not ask for it and proceed. They basically had to stop, and – who knows? – the whole thing got dropped or set back.

My understanding is that this is dealing with a notice or a proof of claim for an accident, sickness, or disability claim, and this new section, 712.1, would be giving the opportunity that if a presumption of death is not established, for example, it can ask that further evidence be furnished. It can seek out that evidence, and it didn’t have the ability to do that in the past. I sense that this is a section that will enhance the service to the claimants and allow claims to proceed that otherwise would probably be held up. As such, because I see it as an enhancement to the claimants, who are ordinary human beings who are just trying to get on with their lives here, I’m okay with this section unless I’m not understanding it appropriately.

Amendment A1B(c)

Ms Blakeman: This is strictly the fixing of an administrative typo. As much as I enjoy it when the government makes a mistake, it would be unseemly of me to tease them, so I think that at this point I would just suggest that we call the question.

Bill as Amended

Ms Blakeman: Yes. There was a question asked by my colleague the Leader of the Official Opposition, MLA for Edmonton Riverview, in connection with this debate earlier this week. His concern was around the section which appears in the original act as section 115 but was being adjusted through this amending act.

Essentially, his question was around section 115, which dictated that insurance companies could not have a certain percentage of debt. The concern was that if their assets or investments were downgraded because ofthe current economic times, their percentage would rise, and then what? We have had a response from the minister that does note the question. I’ll just read a bit of this:

it is important to read that the section is being amended to ensure that it also includes any subsidiary of the original insurer so that the government can regulate the business of the insurer as a whole.

It was trying to capture those subsidiaries, but we were more concerned about the percentage of debt that it was allowed to carry, and that’s where our question came from. The response that we’ve essentially had from the minister is that if a company did end up with a higher than allowed percentage, the superintendent of insurance doesn’t, sort of, immediately pull their licence. They do go through and try and work with the company to get a plan that will help them get back on track. They try not to immediately, you know, suspend their operations. They look at things like liquidation of assets or restructuring in order to keep them above the threshold that’s mentioned in section 115. I’m happy to table a copy of this letter. I’ll just have to get copies, and then I’ll table it. Sorry.

The minister goes on to talk about, you know, solvencies based on many issues and that the superintendent of insurance tries to meet regularly with companies to make sure they have the resources to pay the claims. Ultimately, if they can’t help or save a company, there is a provision in the legislation to take control of the company and institute an orderly windup. There are specific sections in the act that provide protection for policy holders ahead of other creditors, which is good news. I like to see that consumer protection out there.

There is an industry-wide compensation plan to make sure that outstanding claims are covered. That was a very thorough answer. Thank you for that. We were glad to see it because it was a bit of a puzzle. Now, I think that my questions and concerns have essentially been answered in the debate that I’ve had. We’ve just gone through the amendments that the government brought forward, which were mostly administrative. It’s a big bill, and any time I can encourage the government to introduce or to evergreen legislation using plain language, it’s a big help. Insurance is baffling to people, and the truth is that they really don’t want to know about it because they hope they never have to read their insurance policy. They hope that things never go wrong. That is the bet that they have, that things will go wrong, and therefore they’re going to pay an insurance premium so that if and when they go wrong, they will have their assets covered or automobile or life or property or whatever else is involved. It is an important part of our society. There are certain parts of it that are closely regulated by the government, and I think the onus is on the government to be involved in consumer protection wherever possible because this is hard for a citizen to do on their own and to be aware of all of this and to be trying to fight it by themselves. So I think legislation like this can be very helpful to citizens. I’m happy enough with what I’ve seen here. My reservations are, as I said before, the aligning with B.C. under this TILMA agreement. Now, we did get to debate this in the Legislature, Bill 11, the Insurance Amendment Act, so thank you for that, but we didn’t get to debate TILMA. I still question anything that’s now falling under that TILMA agreement because we didn’t get to actually debate the agreement here, so I’m very careful with things that are being brought in as part of that agreement, and this insurance act was one of those.

I have had my questions answered. I understand what the legislation is and what it’s trying to do, so I’m fine. I will get that letter copied so you can table it.

Thank you very much, Mr. Chairman.