Third Session, 46th

General Assembly

59 Elizabeth II,

BILL 19

AN ACT TO AMEND THE INSURANCE

COMPANIES ACT NO. 2

Received

and Read the First Time ...................................................................

Second

Reading ..............................................................................................

Committee ......................................................................................................

Third

Reading .................................................................................................

Royal

Assent ...................................................................................................

HONOURABLE KEVIN

O'BRIEN

Minister of

Government Services

Ordered to be printed by

the Honourable House of Assembly

EXPLANATORY NOTE

This Bill would amend the Insurance Companies Act to revise the

classes of insurance that companies carrying on business in the province may

offer for sale here.

A BILL

AN ACT TO AMEND THE INSURANCE COMPANIES ACT NO. 2

Analysis

1. S.2 Amdt.

Definitions

2. S.11 Amdt.

Rights and powers of licensed insurer

3. Ss.12 & 13 R&S

12. Life insurers

13. Fire insurers

4. S.72 Rep.

Endowment and expectancy insurance discontinued

5. S.107 Amdt.

Regulations

6. S.110 R&S

Reciprocal contracts

7. Sch. Added

Be it enacted by the Lieutenant-Governor and

House of Assembly in Legislative Session convened, as follows:

RSNL1990 cI-10

as amended

(1) Paragraph 2(

a) of the Insurance Companies Act is repealed and

the following substituted:

(a) " accident and

sickness insurance" means accident and sickness insurance as defined in

the Schedule;

(2) Section 2 of the Act is amended by adding

immediately after paragraph (

b) the following:

(b.1) "aircraft insurance" means aircraft

insurance as defined in the Schedule;

(3) Paragraph 2(

f) of the Act is repealed and the

following substituted:

(f) " automobile

insurance" means automobile insurance as defined in the Schedule;

(4) Section 2 of the Act is amended by adding

immediately after paragraph (f.1) the following:

(f.2) "boiler and machinery insurance"

means boiler and machinery insurance as defined in the Schedule;

(5) Section 2 of the Act is amended by adding

immediately after paragraph (

k) the following:

(k.1) "credit insurance" means credit

insurance as defined in the Schedule;

(k.2) "credit protection insurance" means

credit protection insurance as defined in the Schedule;

(6) Paragraphs 2(

m) and (

n) of the Act are

repealed.

(7) Paragraph 2(

q) of the Act is repealed.

(8) Section 2 of the Act is amended by adding

immediately after paragraph (

r) the following:

(r.1) "fidelity insurance" means fidelity

insurance as defined in the Schedule;

(9) Paragraph 2(

u) of the Act is repealed and the

following substituted:

(u) "fraternal or sororal society" means

a society, order or association incorporated for the purpose of making with its

members only and not for profit, contracts of life or accident and sickness

insurance under which benefits may be paid only to its members or their

beneficiaries, in accordance with its charter and this Act;

(10) Section 2 of the Act is amended by adding

immediately after paragraph (

v) the following:

(v.1) "hail insurance" means hail insurance

as defined in the Schedule;

(11) Section 2 of the Act is amended by adding

immediately after paragraph (bb) the following:

(bb.1) "legal expenses insurance" means

legal expenses insurance as defined in the Schedule;

(bb.2) "liability insurance" means liability

insurance as defined in the Schedule;

(12) Paragraph 2( dd ) of

the Act is repealed and the following substituted:

( dd ) "life

insurance" means life insurance as defined in the Schedule;

(13) Section 2 of the Act is amended by adding

immediately after paragraph (gg) the following:

(gg.1) "mortgage insurance" means mortgage

insurance as defined in the Schedule;

(14) Section 2 of the Act is amended by adding

immediately after paragraph (mm) the following:

(mm.1) "other approved products insurance"

means other approved products insurance as defined in the Schedule;

(15) Section 2 of the Act is amended by adding

immediately after paragraph (ss) the following:

(ss.1) "property insurance" means property

insurance as defined in the Schedule;

(16) Paragraph 2(xx) of the Act is repealed.

(17) Section 2 of the Act is amended by deleting

the word "and" at the end of paragraph (yy) and by adding immediately

after that paragraph the following:

(yy.1) "surety insurance" means surety insurance

as defined in the Schedule;

(yy.2) "title insurance" means title

insurance as defined in the Schedule; and

2. Subsection 11(2) of the Act is repealed and the

following substituted:

(2) Subject to the laws of the province,

particularly relating to the classes of insurers mentioned in subsection 10(1)

the superintendent may issue a licence to an insurer to carry on one or more of

the classes of insurance that are set out in the Schedule.

3. Sections 12 and 13 of the Act are repealed and

the following substituted:

Life insurers

12. An

insurer licensed to carry on life insurance may, subject to its charter and the

restrictions, limitations and conditions contained in its licence, issue

annuities and endowments of all kinds.

Fire insurers

13. An

insurer licensed to carry on fire insurance may, subject to its charter and the

restrictions, limitations and conditions contained in its licence, insure or

reinsure property in which the insured has an insurable interest against loss

or damage by fire, lightning or explosion and may insure or reinsure the same

property against one or more perils falling within those other classes of

insurance that are set out in the Schedule.

Section 72 of the Act is repealed.

(1) Paragraph 107(

b) of the Act is

repealed and the following substituted:

(

b) adding , removing or

changing a class of insurance contained in the Schedule;

(2) Paragraph 107(

c) of the Act is repealed.

(3) Paragraph 107(

h) of the Act is repealed and

the following substituted:

(

h) extending the

provisions of this Act to a class of insurance added to the

Schedule under

paragraph (b);

Section 110 of the Act is repealed and the

following substituted:

Reciprocal

contracts

110. It

is lawful for a person to exchange with other persons in the province and elsewhere

reciprocal contracts of indemnity or inter-insurance for classes of insurance

for which an insurance company may be licensed under this Act except life

insurance, accident and sickness insurance and surety insurance.

7. The Act is amended by adding immediately after

section 130 the following:

Schedule

Definitions

1. In this Act

(a) " accident and

sickness insurance" means insurance

(

i) against loss

resulting from bodily injury to, or the death of, a person caused by an accident,

(ii) under which an

insurer undertakes to pay a certain sum or sums of insurance money in the event

of bodily injury to, or the death of, a person caused by an accident,

(iii) against loss

resulting from the sickness or disability of a person excluding loss resulting from

an accident or death,

(iv) under which an insurer undertakes to pay a

certain sum or sums of insurance money in the event of the sickness or disability

of a person not caused by an accident, or

(

v) under which an

insurer undertakes to pay insurance money in respect of the health care,

including the dental care and the preventive care, of a person;

(b) " aircraft

insurance" means insurance against

(

i) liability arising out of bodily injury to, or

the death of, a person, or the loss of, or damage to, property, in each case

caused by an aircraft or the use of an aircraft, or

(ii) the loss of, the loss

of use of, or damage to, an aircraft;

(c) " automobile

insurance" means insurance

(

i) against liability arising out of bodily injury

to, or the death of, a person, or the loss of, or damage to, property, in each

case caused by an automobile or the use or operation of an automobile,

(ii) against the loss of,

the loss of use of, or damage to, an automobile, or

(iii) that falls within subparagraph (

i) or (ii) of

the class of accident and sickness insurance, where the accident is caused by

an automobile or the use or operation of an automobile, whether or not

liability exists in respect of the accident, and the automobile insurance

contract includes insurance against liability arising out of bodily injury to,

or the death of, a person caused by an automobile or the use or operation of an

automobile;

(d) " boiler and

machinery insurance" means insurance

(

i) against liability arising out of bodily injury

to, or the death of, a person, or the loss of, or damage to, property, or

against the loss of, or damage to, property, in each case caused by the

explosion or rupture of, or accident to, pressure vessels of any kind or pipes,

engines and machinery connected to or operated by those pressure vessels, or

(ii) against liability arising out of bodily injury

to, or the death of, a person, or the loss of, or damage to, property, or

against the loss of, or damage to, property, in each case caused by a breakdown

of machinery;

(e) " credit

insurance" means insurance against loss to a person who has granted credit

where the loss is the result of the insolvency or default of the person to whom

the credit was given;

(f) "credit protection insurance" means

insurance under which an insurer undertakes to pay off credit balances or debts

of an individual, in whole or in part, in the event of an impairment or

potential impairment in the individual's income or ability to earn an income;

(g) " fidelity

insurance" means

(

i) insurance against

loss caused by the theft, the abuse of trust or the unfaithful performance of

duties by a person in a position of trust, and

(ii) insurance under which

an insurer undertakes to guarantee the proper fulfillment of the duties of an

office;

(h) " hail insurance"

means insurance against the loss of, or damage to, crops in the field caused by

hail;

(i) "legal expenses insurance" means

insurance against the costs incurred by a person or persons for legal services

specified in the legal expenses insurance policy, including a retainer and fees

incurred for the services, and other costs incurred in respect of the provision

of the services;

(j) " liability

insurance" means insurance other than insurance that is incidental to

another class of insurance,

(

i) against liability

arising out of bodily injury to, or the disability or death of, a person,

including an employee,

(ii) against liability

arising out of the loss of, or damage to, property, or

(iii) where the liability insurance contract includes

the insurance described in subparagraph (i), against expenses arising out of

bodily injury to a person other than the insured or a member of the insured's

family, whether or not liability exists;

(k) " life insurance"

means

(

i) insurance that is payable

(

A) on death,

(

B) on the happening of

an event or contingency dependent on human life,

(

C) at a fixed or

determinable future time, or

(

D) for a term dependent

on human life,

and includes

(ii) insurance under which

an insurer, as part of a contract of life insurance, undertakes to pay an additional

sum of insurance money in the event of the death by accident of the person

whose life is insured,

(iii) insurance under which an insurer, as part of a

contract of life insurance, undertakes to pay insurance money or to provide

other benefits in the event that the person whose life is insured becomes

disabled as a result of bodily injury or disease, and

(iv) an undertaking to provide an annuity, or what

would be an annuity except that the periodic payments may be unequal in amount,

for a term dependent solely or partly on a human life, and that undertaking

shall be considered always to have been life insurance;

(l) "mortgage insurance" means insurance

against loss caused by default on the part of a borrower under a loan secured

by a mortgage or charge on real property or an immovable, a hypothec on an

immovable or another interest in real or immovable property;

(m) " other approved

products insurance" means insurance against risks that do not fall within

another class of insurance;

(n) " property

insurance" means insurance against the loss of, or damage to, property and

includes insurance against loss caused by forgery;

(o) " surety

insurance" means insurance under which an insurer undertakes to guarantee

the due performance of a contract or undertaking or the payment of a penalty or

indemnity for a default; and

(p) " title insurance"

means insurance against loss or damage caused by

(

i) the existence of a

mortgage, charge, lien, encumbrance, servitude or another restriction on real

property,

(ii) the existence of a

mortgage, charge, lien, pledge, encumbrance or another restriction on personal

property,

(iii) a defect in a

document that evidences the creation of a restriction referred to in subparagraph

(

i) or (ii),

(iv) a defect in the title

to property, or

(

v) another matter

affecting the title to property or affecting the right to the use and enjoyment

of property.

Earl G. Tucker, Queen's Printer