Bill 11 — First Session, 27Th Legislature, 57 Elizabeth Ii the Legislative Assembly of Alberta Bill 11 Insurance Amendment Act, 2008 (Legislature 27, Session 1)

L27 S1 650

Alberta — Bills

2008 Bill 11 First Session, 27th Legislature, 57 Elizabeth II THE LEGISLATIVE ASSEMBLY OF ALBERTA BILL 11 INSURANCE AMENDMENT ACT, 2008 THE MINISTER OF FINANCE AND ENTERPRISE First Reading . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Second Reading . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Committee of the Whole . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Third Reading . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Royal Assent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Bill 11 BILL 11 2008 INSURANCE AMENDMENT ACT, 2008 ( A s s e n t e d t o , 2 0 0 8 ) HER MAJESTY, by and with the advice and consent of the Legislative Assembly of Alberta, enacts as follows: Amends RSA 2000 cI-3 1 The Insurance Act is amended by this Act. 2

Section 1(

c) is amended by striking out “section 661” and substituting “section 609”. 3

Section 7(

c) is amended by striking out “Immigration Act (Canada)” and substituting “Immigration and Refugee Protection Act (Canada)”. 1

Explanatory Notes 1 Amends

chapter I-3 of the Revised Statutes of Alberta 2000. 2

Section 1(

c) presently reads: 1 In this Act, (c) “agency contract” means a contract between an insurance agent and an insurer in which the insurance agent agrees to act as an insurance agent in respect of insurance issued by the insurer, but does not include the arrangement that an insurance agent has with an insurer that is the service carrier for the Government approved industry plan under

section 661; 3

Section 7(

c) presently reads: 7 An individual is ordinarily resident in Canada if the individual is (

c) a permanent resident within the meaning of the Immigration Act (Canada) and ordinarily resident in Canada, except a permanent resident who has been ordinarily resident in Canada for more than one year after the time at which the individual first became eligible to apply for Canadian citizenship. 1 Explanatory Notes

Section 12 is repealed. 5

Section 15(1) is amended by striking out “section 626.1” and substituting “section 570”. 6

Section 15.1 is amended (

a) in subsection (2) by adding “, except

section 570,” after “this Act”; (

b) in subsection (4) by adding “of the non-accountable entity” after “resources”. 7

Section 16 is amended by adding the following after clause (c): 2

Section 12 presently reads: 12(1) A contract of insurance is deemed to have been made in Alberta if (

a) it insures a person who is domiciled or resident in Alberta when the contract is made, or (

b) the subject-matter of the contract is property that is or will be located in Alberta. (2) Subsection (1) does not apply to a contract of life insurance to which

Part 5, Subpart 4 applies.

(3) This

section has effect despite any agreement, condition or stipulation to the contrary. 5

Section 15(1) presently reads: 15(1) This Act, except

section 626.1, does not apply to a prescribed entity to the extent of its provision to participants of prescribed benefits relating to medical care, accident and sickness benefits. 6

Section 15.1 presently reads in part:

(2) Subject to any regulations made under subsection (3), this Act does not apply to an entity to the extent of its provision to its participants of prescribed benefits whose subject-matter is income replacement due to disability, sickness or disease, provided that no death benefit is payable.

(4) Notwithstanding subsection (3)(b)(v), where a non-accountable entity provides benefits referred to in subsection (2) that are not underwritten by an insurer, it shall disclose to its participants, prior to or at the time that the benefits are offered, that the benefits are not underwritten by an insurer and that the benefits would be payable from the net income, retained earnings or other financial resources. 7 Additional regulation-making authority added. 2 Explanatory Notes

(c.1) defining, enlarging or restricting the meaning of any word or phrase used in this Act but not defined in this Act; 8

Section 37 is repealed and the following is substituted: Scope of insurance 37 An insurer licensed to undertake property insurance may, under a contract falling within

Part 5, Subpart 1, insure an automobile against loss or damage. 9

Section 38 is repealed. 10

Section 47(1) is repealed and the following is substituted: Records to be filed 47(1) Every licensed insurer that carries on in Alberta the business of automobile insurance or any other class of insurance designated by the Minister must prepare and file with the Minister, or with a statistical agency designated by the Minister, (

a) a record of its premiums and of its loss and expense costs in Alberta, and 3

Section 37 presently reads: 37(1) An insurer licensed to undertake fire insurance may, subject to its instrument of incorporation and any term or condition of its licence, insure or reinsure any property in which the insured has an insurable interest (

a) against loss or damage by fire, lightning or explosion, (

b) against loss or damage from falling aircraft, earthquake, windstorm, tornado, hail, sprinkler leakage, riot, malicious damage, weather, water damage, smoke damage, civil commotion and impact by vehicles, and (

c) against any one or more pe rils falling within any other prescribed classes of insurance.

(2) An insurer licensed to undertake fire insurance may, under a contract falling within

Part 5, Subpart 3, insure an automobile against loss or damage. 9

Section 38 presently reads: 38 An insurer licensed to undertake life insurance may, unless the licence expressly provides otherwise, include disability insurance in any policy of life insurance in respect of the same life or lives insured by the policy. 10

Section 47(1) presently reads: 47(1) Every licensed insurer that carries on in Alberta the business of automobile insurance must prepare and file with the Minister, or with a statistical agency that the Minister may designate, a record of its automobile insurance premiums and of its loss and expense costs in Alberta, in a manner and according to a system of classification that the Minister approves. 3 Explanatory Notes

(

b) a record of any other information required by the Minister, in a manner and according to a system of classification that the Minister approves. 11

Section 50(

b) is repealed and the following is substituted: (

b) any information that is required by the Minister for analytical or policy-making purposes. 12

Section 54(1)(

d) is amended by striking out “section 531(8) or 657” and substituting “section 511.1(7) or 605”. 13

Section 61 is amended (

a) by repealing subsection (1)( b)(ii) and substituting the following: (ii) at the same time pays to the Minister a charge equal to 50% of the premium paid or payable or premium notes given or to be given in connection with the insurance. (

b) in subsections (1)(b)(ii) and (2) by striking out “fee” wherever it occurs and substituting “charge”; (

c) by adding the following after subsection (2):

(2.1) Despite subsection (1)(b)(ii), the Minister may reduce the charge to an amount not less than 10% of the premium paid or payable or premium notes given or to be given in connection with the insurance if the Minister is satisfied that the insurance was not available through a licensed insurer. 4

Section 50 presently reads: 50 A licensed insurer must provide to the Minister, within the time specified by the Minister, (

a) any information that is required by the Minister to enable the Minister to respond to inquiries on the company’s market conduct activities; (

b) information for prescrib ed analytical or policy-making purposes. 12

Section 54(1)(

d) presently reads: 54(1) Where (

d) a licensed insurer is conv icted of an offence under

section 531(8) or 657, 13

Section 61(1) and (2) presently read: 61(1) Despite

section 18, an insurer that is not licensed may undertake insurance in Alberta with an insured if (

a) the insurance is effected without any solicitation whatsoever on the part of that insurer, and (

b) the insured, not later than 30 days after signing the contract of insurance or receiving any policy, interim receipt or insuring document issued by or on behalf of the insurer, whichever occurs first, (

i) notifies the Superintendent in writing under oath of the terms of the insurance, the insurer with whom the insurance is placed and the amount of premium paid or payable or premium notes given or to be given in connection with the insurance, and 4 Explanatory Notes

Section 63 is amended (

a) in subsection (2) by adding “, subject to subsection (2.1),” after “if”; (

b) by adding the following after subsection (2): (2.1) Subsection (1)(

c) and (

d) do not apply if (

a) the special broker is an affiliate of the insurance agent that places the insurance, and (

b) the insurance is placed outside Alberta. 5

(ii) at the same time pays to the Minister of Finance a fee equal to 50% of the premium paid or payable or premium notes given or to be given in connection with the insurance.

(2) If the fee referred to in subsection (1)(b)(ii) is not paid within 30 days from the time it becomes payable, a sum equal to 50% of the fee remaining unpaid becomes a penalty that forms a part of the fee and is recoverable with the fee. 14

Section 63 presently reads: 63(1) Despite

section 18, an insurer that is not licensed may undertake insurance in Alberta with an insured if (

a) the insurance cannot be obt ained from licensed insurers, (

b) the insurance is effected through a person who holds a valid and subsisting special broker’s licence for that class of insurance, (

c) before the insurance is undertaken the special broker obtains from the proposed insured a signed and dated document (

i) describing the nature and amount of the insurance required, and (ii) stating that the insurance cannot be obtained from licensed insurers and specifying the licensed insurers who refused the proposed insured’s application, and (

d) before the insurance is undertaken the special broker discloses in writing to the proposed insured that the insurance will be placed with an unlicensed insurer.

(2) Despite

section 18, a person may enter into or renew a contract of insurance to insure a risk in Alberta with an unlicensed insurer if the requirements of subsection (1)(

a) to (

d) have been met.

(3) This

section does not apply to a contract of insurance that may be evidenced by a motor vehicle liability policy. 5 Explanatory Notes

Section 72(1) is amended by adding “on premiums” after “taxes”. 16

Section 80(1)(d)(ii) is amended by striking out “of Finance”. 17

Section 81(b), (

c) and (

d) are repealed and the following is substituted: (

b) accident and sickness insurance; (

c) surety insurance. 18

Section 82(1) is amended by striking out “standard owner’s policy referred to in

section 610(6) or a 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”. 6

Section 72(1) presently reads: 72(1) In respect of all premiums on insurance effected by a licensed special broker, the special broker must pay to the Minister the taxes that would be payable if the premiums had been received by a licensed insurer, and the payment must accompany the monthly return provided for in

section 71. 16

Section 80(1)(d)(ii) presently reads: 80(1) Despite

section 79, a person may, with respect to property located in Alberta, exchange a reciprocal contract that is a contract of property insurance and that is part of an unlicensed reciprocal insurance exchange if (

d) the person who owns the pr operty, within 30 days after signing the contract, (ii) at the same time pays to the Minister of Finance a fee equal to 50% of the premium paid or payable or premium notes given or to be given or mutual liability assumed in connection with the insurance. 17

Section 81 presently reads: 81 Subject to

section 82, a reciprocal insurance exchange may be licensed to undertake any class of insurance that a provincial company may be licensed to undertake except for the following classes: (

a) life insurance; (

b) accident insurance; (

c) sickness insurance; (

d) guarantee insurance. 18

Section 82(1) presently reads: 82(1) No reciprocal insurance exchange may be licensed to undertake the type of automobile insurance that is evidenced by a 6 Explanatory Notes

Section 103 is amended by adding “, without the approval of the Superintendent,” after “may”. 20

Section 115 is repealed and the following is substituted: Debt obligations 115(1) A provincial life company shall not, and shall not permit its prescribed subsidiaries to, enter into a debt obligation or issue any share, other than a common share, if as a result the aggregate of the total debt obligations and the book value of the prescribed shares of the company and its prescribed subsidiaries would exceed 20% of the total assets of the company and its prescribed subsidiaries.

(2) A provincial property and casualty company shall not, and shall not permit its prescribed subsidiaries to, enter into a debt obligation or issue any share, other than a common share, if as a result the aggregate of the total debt obligations and the book value of the prescribed shares of the company and its prescribed subsidiaries would exceed 2% of the total assets of the company and its prescribed subsidiaries. 21

Section 425(2) is repealed and the following is substituted:

(2) A provincial life company that has more than $15 000 000 of base capital may, with the prior approval of the Minister, make or acquire a commercial loan or acquire control of a body corporate referred to in

section 421(3) that holds commercial loans where the aggregate value of all commercial loans held by the company and its subsidiaries would as a result exceed the limit set out in subsection (1). 22

Section 432 is amended by adding the following after clause (f): 7

standard owner’s policy referred to in

section 610(6) or a standard garage policy. 19

Section 103 presently reads: 103 No reciprocal insurance exchange may undertake any liability on a reciprocal contract or on any other contract of insurance except on behalf of a subscriber. 20

Section 115 presently reads: 115(1) A provincial life company must not, and must not permit its prescribed subsidiaries to, enter into a debt obligation or issue any share, other than a common share, if as a result the aggregate of the total debt obligations of the company and the book value of its prescribed shares would exceed 20% of the total assets of the company.

(2) A provincial property and casualty company must not, and must not permit its prescribed subsidiaries to, enter into any debt obligation or issue any share, other than a common share, if as a result the aggregate of the total debt obligations of the company and the book value of its prescribed shares would exceed 2% of the total assets of the company. 21

Section 425(2) presently reads:

(2) A provincial life company that has more than $15 000 000 of base capital may, with the prior approval of the Minister, (

a) make or acquire commercial loans, or (

b) acquire control of a body co rporate referred to in

section 421(3) that holds commercial loans. 22 Regulation-making authority added. 7 Explanatory Notes

(f.1) respecting the protection and maintenance of assets of a provincial company, including regulations respecting the bonding of directors, officers and employees of a provincial company; 23

Section 455(4)(

c) is amended by striking out “section 661” and substituting “section 609”. 24

Section 498(

n) is amended by striking out “of Finance”. 25

Section 509(1)(

c) is repealed and the following is substituted: (

c) engage in any unfair, coerci ve or deceptive act or practice, or 26

Section 511(1) is amended (

a) in clause (

e) by adding “or a contract of accident and sickness insurance” after “life insurance”; (

b) by adding the following after clause (g): (g.1) requiring an insurer to notify a claimant before the expiration of the applicable limitation period in the prescribed circumstances and in the prescribed manner, 8

Section 455(4)(

c) presently reads:

(4) An individual who is an employee of an insurer and who holds a valid and subsisting insurance agent’s certificate of authority may act as an insurance agent only for (

c) in the case of automobile insurance, an insurer that is the service carrier for the Government approved industry plan under

section 661. 24

Section 498(

n) presently reads: 498 The Lieutenant Governor in Council may make regulations (

n) respecting the fees, levies, penalties and other charges that are to be paid to insurance councils by insurers, insurance agents or adjusters for any thing an insurance council does under the authority of this Act, respecting the means of enforcing payment of the fees, levies, penalties or other charges and specifying that all, some or none of the fees, levies, penalties or other charges are to be remitted to the Minister of Finance; 25

Section 509(1)(

c) presently reads: 509(1) No insurer, insurance agent or adjuster may (

c) commit any unfair, coercive or deceptive practice, or 26

Section 511(1)(

e) and (h.1) presently read: 511(1) The Lieutenant Governor in Council may make regulations (

e) respecting an insured’s right to rescind a contract of life insurance and an insurer’s obligation to refund premiums if the contract is rescinded; (h.1) respecting the receiving, handling and resolution of complaints, other than complaints referred to in

section 8 Explanatory Notes

and setting out the consequences and the remedies available to a claimant if an insurer fails to comply with the requirements; (g.2) respecting the dispute resolution process established by

section 519, including, without limitation, requiring an insurer to notify an insured of the availability of that dispute resolution process in the prescribed circumstances and in the prescribed manner; (g.3) respecting the use of telephonic communications or other means of communication that do not automatically generate a verbatim record of the communications, including, without limitation, regulations (

i) requiring that such communications be concurrently recorded, (ii) requiring that copies, including transcripts, of records made under subclause (

i) be provided to the insured or a claimant under a contract, and (iii) excluding the use of such communications in relation to specified records under this Act or a regulation under this Act; (

c) in clause (h.1) (

i) by striking out “, other than complaints referred to in

section 661.3,”; (ii) by adding the following after subclause (v): (v.1) requiring an insurer to be a member of a prescribed organization for the purpose of dealing with complaints; (

d) by adding the following after clause (h.1): (h.2) respecting the administration of group insurance and creditor’s group insurance in respect of life insurance under

Part 5, Subpart 5 and accident and sickness insurance under

Part 5, Subpart 6, including, without limitation, regulations 9

661.3, by persons against insurers, including, without limitation, regulations 9 Explanatory Notes

(

i) respecting the amount and disclosure of compensation payable to an administrator of a group insurance contract or a creditor’s group insurance contract; (ii) respecting the duties and conduct of an administrator of a group insurance contract or a creditor’s group insurance contract; 27 The following is added after

section 511: Insurance as collateral security 511.1(1) No mortgagee shall accept or receive either directly or through the mortgagee’s agent or employee, and no officer or employee of a mortgagee shall accept or receive, any commission or other remuneration or benefit in consideration of effecting a contract or renewal of a contract under which contract loss, if any, is payable to the mortgagee.

(2) No insurer or insurance agent shall pay, allow or give any commission or other remuneration or benefit to a mortgagee or to any person in the employ of or on behalf of a mortgagee in consideration of effecting a contract or renewal of a contract under which contract loss, if any, is payable to the mortgagee. (3) Subsections (1) and (2) do not apply to an insurer that pays, allows or gives any commission or other remuneration or benefit to a mortgagee or to any person in the employ of or on behalf of a mortgagee in respect of a contract if the mortgagee is a deposit-taking institution that holds a restricted insurance agent’s certificate of authority and the contract falls within one or more of the classes or types of insurance specified by the Minister under

section 454(2).

(4) An insurer or other person who contravenes this

section is guilty of an offence.

(5) No person who engages in the business of lending money, in this

section called a “money-lender”, and who owns an insurance agency or has any interest in or connection with an insurance agency shall require as a condition of the making of any loan that the borrower must 10

27 Life insurance policies. 10 Explanatory Notes

(

a) cancel any subsisting contract issued by an insurer licensed to issue that type of policy under this Act, and (

b) take out other insurance through the money-lender or through any insurance agency owned by the money-lender or in or with which the money-lender has any interest or connection.

(6) No trust corporation shall cancel any subsisting contract that is issued by an insurer licensed to issue that type of contract under this Act that is issued in respect of any property for which the trust corporation is a trustee, unless the necessity for the continuation of the insurance does not exist and no other insurance of a similar description is taken out in respect of the property during the original term of the first-mentioned insurance.

(7) A money-lender who contravenes subsection (5), a trust corporation that contravenes subsection (6), an insurance agent who knowingly accepts any proposal for any insurance taken out in contravention of subsection (5) or (6) and an insurer that issues any contract with actual or constructive notice that it has been negotiated in contravention of subsection (5) or (6) are guilty of an offence. Life insurance policies 511.2(1) In this section, “variable life insurance policy” means a life insurance policy for which all or part of the insurer’s liability under the policy, and the reserves for the liability, vary in amount depending on the market value of a specific group of assets.

(2) The Lieutenant Governor in Council may make regulations respecting life insurance policies, including variable life insurance policies, including, without limitation, regulations (

a) providing for the form and contents, or either, of (

i) a life insurance policy, (ii) an application for a life insurance policy, (iii) an endorsement or rider to a life insurance policy, 11

11 Explanatory Notes

(iv) any advertising material in respect of a life insurance policy, or (

v) an information folder issued or used by an insurer; (

b) requiring an insurer to file with the Superintendent or an industry body designated by the Superintendent the form of any life insurance policy and other materials required by the regulations before the insurer may issue a life insurance policy; (

c) requiring an insurer to deliver or otherwise provide to an applicant for a life insurance policy any information or materials required by the regulations. 28

Part 5 is repealed and the following is substituted:

Part 5 Insurance Contracts Subpart 1 General Insurance Provisions Definition 512 In this Subpart, “contract” means a contract of insurance. Application of Subpart 513 Subject to sections 638 and 696 and except as otherwise provided, the provisions of this Subpart, where not inconsistent with other provisions of this Act, apply to every contract made in Alberta other than a contract of (

a) life insurance, (

b) accident and sickness insurance, or (

c) reinsurance. Contract made in Alberta 514(1) A contract is deemed to have been made in Alberta if (

a) it insures a person who is domiciled or resident in Alberta when the contract is made, or 12

28 Repeal and replacement of

Part 5 respecting insurance contracts. 12 Explanatory Notes

(

b) the subject-matter of the contract is property that is or will be located in Alberta.

(2) This

section has effect despite any agreement, condition or stipulation to the contrary. Contract must be consistent with Act 515(1) No insurer shall make a contract that is inconsistent with this Act.

(2) An action or omission of an insurer resulting in imperfect compliance with this Act does not render a contract invalid insofar as it benefits an insured.

Terms, etc., of contract 516(1) All the terms and conditions of a contract must be set out in full in the policy or in writing securely attached to it when it is issued, and unless so set out no term of the contract or condition, stipulation, warranty or proviso modifying or impairing its effect is valid or admissible in evidence to the prejudice of the insured or a person to whom insurance money is payable under the contract. (2) Subsection (1) does not apply to an alteration or modification of the contract agreed on in writing by the insurer and the insured after the policy is issued.

(3) Every policy must contain the following: (

a) the name of the insurer; (

b) the name of the insured; (

c) the name of the person to whom the insurance money is payable; (

d) the amount or the method of determining the amount of the premium for the insurance; (

e) the subject-matte r of the insurance; (

f) the indemnity for which the insurer may become liable; (

g) the event on the happening of which the liability is to accrue; 13

(

h) the date the insurance takes effect; (

i) the date the insurance terminates or the method by which that date is established; (

j) the following statement: Every action or proceeding against an insurer for the recovery of insurance money payable under the contract is absolutely barred unless commenced within the time set out in the Insurance Act. (4) Subsection (3) does not apply to contracts of surety insurance or hail insurance.

(5) When a contract, whether it does or does not provide for its renewal, is renewed by a renewal receipt, it is a sufficient compliance with subsection (1) if the terms and conditions of the contract were set out as required by that subsection and the renewal receipt identifies the contract by its number or date.

(6) The application or proposal for insurance must not, as against the insured, be deemed to be a part of or be considered with a contract except insofar as the Court determines that it contains a material misrepresentation by which the insurer was induced to enter into the contract, the proof of which rests with the insurer.

(7) No contract may contain or have endorsed on it, or be made subject to, any term, condition, stipulation, warranty or proviso providing that the contract is avoided by reason of any statement in the application or proposal for the insurance inducing the insurer to enter into the contract, unless the term, condition, stipulation, warranty or proviso is limited to cases in which the statement is material to the contract, and no contract may be avoided by reason of the inaccuracy of any such statement unless it is material to the contract.

(8) The question of materiality in any contract is a question of fact, and no admission, term, condition, stipulation, warranty or proviso to the contrary contained in the application or proposal for insurance or in the policy or in any agreement or document relating to the contract has any force or validity. 14

(9) Nothing in this

section impairs the effect of any statutory condition required by this Act to be part of any contract, or of any express provision of this Act.

(10) This

section does not apply to contracts of automobile insurance. Contents of contract 517(1) Subject to subsection (2), before a policy is issued in respect of a contract, the contract is deemed to include (

a) the usual terms and conditions contained in the insurer’s standard policy for the type of insurance concerned, and (

b) any other terms and conditions of which the insured is given notice in writing as to their existence and contents.

(2) Unless the insured has been given notice in writing of the existence and contents of a term or condition, the term or condition does not apply to a contract described in subsection (1) if the insured is not reasonably able to comply with it in the absence of the notice.

(3) This

section does not apply to contracts of automobile insurance. Policy in accordance with terms of application or proposal 518(1) A policy issued to an insured on an application or proposal is deemed to be in accordance with the terms of the application or proposal unless the insurer immediately gives notice to the insured in writing of the particulars in which the policy and the application or proposal differ, in which case the insured may, within 2 weeks after receiving the notice, reject the policy.

(2) If the insured rejects the policy under subsection (1), the insurer must refund as soon as practicable the excess of premium actually paid by the insured over the prorated premium for the expired time, but in no event may the prorated premium for the expired time be less than any minimum retained premium specified in the policy.

(3) Despite subsection (2), if the insured failed to disclose material information on the application or proposal the knowledge of which would have resulted in the insurer charging a higher premium than 15

what was charged, the amount that the insurer is required to refund under subsection (2) is the excess of premium actually paid by the insured over the short rate premium for the expired time calculated as if the higher premium had been charged.

(4) If the insured does not reject the policy under subsection (1), the insured is deemed to have accepted the policy. Dispute resolution 519(1) In this section, “representative” means a dispute resolution representative appointed under subsection (5).

(2) This

section applies to disputes between an insurer and an insured about a matter that under Statutory Condition 11 set out in

section 540 or another condition of the contract must be determined using this dispute resolution process.

(3) This

section does not apply to a contract of hail insurance.

(4) Either the insured or the insurer may demand in writing the other’s participation in a dispute resolution process after proof of loss has been delivered to the insurer.

(5) Within 7 days after receiving or giving a demand under subsection (4), the insured and the insurer must each appoint a dispute resolution representative, and within 15 days after their appointment, the 2 representatives must appoint an umpire.

(6) A person may not be appointed as a representative if the person is (

a) the insured or the insurer, or (

b) an employee of the insured or the insurer.

(7) The representatives must determine the matters in dispute by agreement and, if they fail to agree, submit their differences to the umpire, and the written determination of any 2 of them determines the matters.

(8) Each party to the dispute resolution process must pay the representative whom the party appointed, and each party must bear equally the expense of the dispute resolution process and the umpire. 16

(9) If (

a) a party to a dispute resolution process fails to appoint a representative in accordance with subsection (5), or (

b) a representative fails or refuses to act or is incapable of acting and the party that appointed that representative has not appointed another representative within 7 days after the failure, refusal or incapacity, on application of the insurer or the insured on 2 days’ notice to the other, the Court may appoint a representative.

(10) On an application under subsection (9), the Court may award costs on a solicitor and client basis against the person whose representative is appointed by the Court, whether or not that person appeared on the application.

(11) If (

a) the representatives fail to appoint an umpire in accordance with subsection (5), or (

b) the umpire fails or refuses to act or is incapable of acting, either representative may make an application to the Superintendent for the appointment of an umpire, containing (

c) the names of 3 persons the applicant believes are capable of performing the functions of the umpire, and (

d) the credentials of the 3 persons.

(12) Before making an application under subsection (11), the applicant must give notice in writing to the other representative of the intention to make the application, which notice must contain the names and credentials the applicant is submitting to the Superintendent under subsection (11).

(13) An application under subsection (11) must be accompanied with a copy of the notice, and the date it was given, under subsection (12). 17

(14) Within 15 days after receiving a notice under subsection (12), the other representative may give the Superintendent and the applicant (

a) the names of 3 persons the representative believes are capable of performing the functions of the umpire, and (

b) the credentials of the 3 persons.

(15) The Superintendent must appoint an umpire from the names submitted under subsection (11) or (14) as soon as practicable after the earlier of the following occurs: (

a) the Superintendent receives names and credentials under subsection (14); (

b) the period for providing names and credentials under subsection (14) expires.

(16) An umpire is bound by the rules of procedural fairness in carrying out the umpire’s functions under this section. Relief from forfeiture 520 If the Court considers it inequitable that there has been a forfeiture or avoidance of insurance, in whole or in part, on the ground that there has been imperfect compliance with (

a) a statutory condition, or (

b) a condition or term of a contract as to the proof of loss to be given by the insured or the claimant or another matter or thing done or omitted to be done by the insured or the claimant with respect to the loss, the Court may relieve against the forfeiture or avoidance on any terms it considers just. Waiver and estoppel 521(1) The obligation of an insured to comply with a requirement under a contract is excused to the extent that (

a) the insurer has given notice in writing that the insured’s compliance with the requirement is excused in whole or in part, subject to the terms specified in the notice, if any, or 18

(

b) the insurer’s conduct reas onably causes the insured to believe that the insured’s compliance with the requirement is excused in whole or in part, and the insured acts on that belief to the insured’s detriment.

(2) Neither the insurer nor the insured is deemed to have waived any term or condition of a contract by reason only of (

a) the insurer’s or insured’s participation in a dispute resolution process under

section 519, (

b) the delivery and completion of a proof of loss, or (

c) the investigation or adjustment of any claim under the contract. Effect of delivery of policy 522(1) When a policy has been delivered, the contract is as binding on the insurer as if the premium had been paid, although (

a) the premium has not in fact been paid, and (

b) the policy was delivered by an officer or agent of the insurer who had no authority to deliver it.

(2) If a premium has not been paid, the insurer may do one or both of the following: (

a) sue for any unpaid premium; (

b) if there is a claim under the contract, deduct the amount of the unpaid premium from the amount for which the insurer is liable under the contract.

(3) If (

a) a cheque, bill of exchange, promissory note or other written promise to pay is given for the whole or part of any premium, whether for an original contract or for a renewal of a contract, and (

b) the cheque, bill of exchange, promissory note or other written promise to pay is not honoured according to its tenor, 19

the insurer may terminate the contract in accordance with any statutory or policy condition or, if there is no relevant statutory or policy condition, by giving notice by registered mail. Insurer to furnish forms 523(1) An insurer, immediately on receipt of a request, and in any event not later than 60 days after receipt of notice of loss, must furnish to the insured or the person to whom the insurance money is payable forms on which to make the proof of loss required under the contract.

(2) An insurer that neglects or refuses to comply with subsection (1) is guilty of an offence and, in addition,

section 524 is not available to the insurer as a defence to an action brought, after the neglect or refusal, for the recovery of money payable under the contract.

(3) If the insurer has, within 30 days after notification of loss, adjusted the loss acceptably to the person to whom the insurance money is payable, the insurer is deemed to have complied with this section.

(4) An insurer by reason only of furnishing forms to make the proof of loss is not to be taken to have admitted that a valid contract is in force or that the loss in question falls within the insurance provided by the contract. When action may be brought 524 No action lies for the recovery of money payable under a contract until the expiration of 60 days, or of any shorter period fixed by the contract, after proof, in accordance with the provisions of the contract, (

a) of the loss, or (

b) of the happening of the event on which the insurance money is to become payable. Consolidation of actions 525(1) If several actions are brought for the recovery of money payable under one or more contracts, the Court may consolidate or otherwise deal with them so that there is only one action for and in respect of all the claims made in the actions. 20

(2) If an action is brought to recover the share of money payable under a contract to one or more minors, all the other minors entitled, or the trustees, executors or guardians entitled to receive payment of the shares of the other minors, must be made parties to the action, and the rights of all the minors must be determined in one action.

(3) In all actions where several persons are interested in the money payable under a contract, the Court may apportion any sum directed to be paid among the persons entitled to the insurance money, and may give all necessary directions and relief. Limitation of actions 526(1) An action or proceeding against an insurer under a contract must be commenced (

a) in the case of loss or damage to insured property, not later than 2 years after the date the insured knew or ought to have known that the loss or damage occurred, and (

b) in any other case, not later than 2 years after the date that the cause of action against the insurer arose.

(2) This

section does not apply to contracts of automobile insurance and hail insurance. Application of Limitations Act 527

Section 5 of the Limitations Act applies to a limitation period established in this Act in respect of an action or proceeding on a contract as if the period were established under the Limitations Act. Payment of insurance money 528 Insurance money is payable in Alberta in lawful money of Canada. Payment to payee domiciled or resident abroad 529 If a person entitled to receive money payable under a contract, except insurance of the person, is domiciled or resides in a foreign jurisdiction and payment valid according to the law of the foreign jurisdiction is made to the person, the payment is valid and effectual for all purposes. 21

Notice 530(1) Subject to any statutory condition and subsection (2), if the method of giving notice is not otherwise expressly provided for, any notice given by an insurer for any of the purposes of this Act may, in the case of an insured, be given by mailing it to the postal address given in the insured’s original application or proposal for insurance or otherwise notified in writing to the insurer.

(2) Notices given or sent by provincial companies to policyholders must be given or sent in accordance with

section 228.

(3) Subject to any statutory condition, if the method of delivering the notice is not otherwise expressly provided for, any notice to be given to an insurer for any of the purposes of this Act may be given by (

a) delivering it to the chief agency of the insurer in the province, (

b) sending it by registered mail addressed to the insurer or its manager or agent at that chief agency, or (

c) sending it to the authorized agent of the insurer in any manner. Furnishing of copy to insured 531(1) An insurer must on request furnish to the insured a copy of (

a) the insured’s application or proposal for insurance, and (

b) the insured’s policy.

(2) An insurer must furnish the first copy of the policy free of charge, but may charge a reasonable fee to cover its expenses in furnishing any additional copies. Insurance against loss through negligence 532 It is lawful for an insurer to contract to indemnify an insured for financial loss occasioned by reason of liability to a third person, whether or not the loss is caused by the insured through negligence or while contravening any municipal or Metis settlement bylaw or any Act of the Legislature. 22

Claim for indemnity 533(1) In this section, “contract of insurance” includes insurance undertaken by an insurer as part of life insurance whereby the insurer undertakes to pay insurance money or to provide other benefits in the event the person whose life is insured becomes disabled as a result of bodily injury or disease.

(2) Unless a contract of insurance provides otherwise, a contravention of any criminal or other law in force in Alberta or elsewhere does not render unenforceable a claim for indemnity under a contract of insurance except when the contravention is committed by the insured, or by another person with the consent of the insured, with intent to bring about loss or damage.

Execution against insured unsatisfied 534(1) In any case in which a person insured against liability for injury or damage to persons or property of others has failed to satisfy a judgment obtained by a claimant for the injury or damage and a writ of enforcement against the insured in respect of the judgment is returned unsatisfied, the enforcement creditor has a right of action against the insurer to recover an amount, not exceeding the amount of insurance under the policy or the amount of the judgment, in the same manner and subject to the same equities as the insured would have if the judgment had been satisfied.

(2) This

section does not apply to contracts of motor vehicle liability insurance. Assignment of premium refund 535(1) If an insured assigns the right to a refund of premium that may accrue by reason of the cancellation or termination of a contract under the terms of the contract and notice of the assignment is given by the assignee to the insurer, the insurer must pay any refund to the assignee despite any provision in this Act or condition in the contract, whether established under this Act or not, requiring the refund to be paid to the insured or to accompany any notice of cancellation or termination to the insured.

(2) If the condition in a contract dealing with cancellation or termination by the insurer provides that the refund must accompany the notice of cancellation or termination, the insurer must include in the notice a statement that, instead of payment of the refund in 23

accordance with the condition, the refund is being paid to the assignee under this section. Payment into Court by insurer 536(1) If an insurer cannot obtain sufficient discharge for insurance money for which it admits liability, the insurer may apply to the Court ex parte for an order for the payment of the insurance money into Court, and the Court may order the payment into Court to be made on any terms as to costs and otherwise that the Court directs, and may provide to what fund or name the amount is to be credited.

(2) The receipt of the clerk or other proper officer of the Court is sufficient discharge to the insurer for the insurance money paid into Court, and the insurance money must be dealt with in accordance with an order of the Court. Filing of copy of policy, etc., with Superintendent 537 The Superintendent may require an insurer to file with the Superintendent a copy of any form of policy or of the form of application for any contract or of any endorsement or rider or advertising material issued or used by the insurer.

Title insurance 538 A contract of title insurance must be in writing and in addition to the other requirements established by this Act must expressly limit the liability of the insurer to a sum stated in the contract. Mortgagees and other payees 539(1) When a loss under a contract has, with the consent of the insurer, been made payable to a person other than the insured, the insurer shall not cancel or alter the contract to the prejudice of that person without notice to that person.

(2) The length of notice and method of giving the notice under subsection (1) must be the same as the length and method of giving notice of cancellation to the insured under the statutory conditions in the contract. Statutory conditions 540(1) Subject to subsections (2) and (3), 24

(

a) the conditions set out in this

section are deemed to be part of every contract in force in Alberta and must be printed on every policy under the heading “Statutory Conditions”, and (

b) no variation or omission of or addition to any statutory condition is binding on the insured.

(2) This

section does not apply to contracts of automobile insurance, hail insurance, surety insurance or any other class of insurance prescribed in the regulations.

(3) Statutory Conditions 1 and 6 to 13 apply only to, and need only be printed on, contracts that include insurance against loss or damage to property.

(4) In this section, “policy” does not include an interim receipt or a binder. Statutory Conditions MISREPRESENTATION 1 If a person applying for insurance falsely describes the property to the prejudice of the insurer, or misrepresents or fraudulently omits to communicate any circumstance that is material to be made known to the insurer in order to enable it to judge the risk to be undertaken, the contract is void as to any property in relation to which the misrepresentation or omission is material. PROPERTY OF OTHERS 2 The insurer is not liable for loss or damage to property owned by a person other than the insured unless (

a) otherwise specifically stated in the contract, or (

b) the interest of the insured in that property is stated in the contract. CHANGE OF INTEREST 3 The insurer is liable for loss or damage occurring after an authorized assignment under the Bankruptcy and Insolvency Act (Canada) or a change of title by succession, by operation of law or by death. 25

MATERIAL CHANGE IN RISK 4(1) The insured must promptly give notice in writing to the insurer or its agent of a change that is (

a) material to the risk, and (

b) within the control and knowledge of the insured.

(2) If an insurer or its agent is not promptly notified of a change under subparagraph (1) of this condition, the contract is void as to the part affected by the change.

(3) If an insurer or its agent is notified of a change under subparagraph (1) of this condition, the insurer may (

a) terminate the contract in accordance with Statutory Condition 5, or (

b) notify the insured in writing that, if the insured desires the contract to continue in force, the insured must, within 15 days after receipt of the notice, pay to the insurer an additional premium specified in the notice.

(4) If the insured fails to pay an additional premium when required to do so under subparagraph (3)(

b) of this condition, the contract is terminated at that time and Statutory Condition 5(2)(

a) applies in respect of the unearned portion of the premium. TERMINATION OF INSURANCE 5(1) The contract may be terminated (

a) by the insurer giving to the insured 15 days’ notice of termination by registered mail or 5 days’ written notice of termination personally delivered, or (

b) by the insured at any time on request.

(2) If the contract is terminated by the insurer, (

a) the insurer must refund the excess of premium actually paid by the insured over the prorated premium for the expired time, but in no event may the prorated premium for the expired time be less than any minimum retained premium specified in the contract, and 26

(

b) the refund must accompany the notice unless the premium is subject to adjustment or determination as to amount, in which case the refund must be made as soon as practicable.

(3) If the contract is terminated by the insured, the insurer must refund as soon as practicable the excess of premium actually paid by the insured over the short rate premium for the expired time specified in the contract, but in no event may the short rate premium for the expired time be less than any minimum retained premium specified in the contract.

(4) The 15-day period referred to in subparagraph (1)(

a) of this condition starts to run on the day the registered letter or notification of it is delivered to the insured’s postal address. REQUIREMENTS AFTER LOSS 6(1) On the happening of any loss or damage to insured property, the insured must, if the loss or damage is covered by the contract, in addition to observing the requirements of Statutory Condition 9, (

a) immediately give notice in writing to the insurer, (

b) deliver as soon as practicable to the insurer a proof of loss in respect of the loss or damage to the insured property verified by statutory declaration (

i) giving a complete inventory of that property and showing in detail quantities and costs of that property and particulars of the amount of loss claimed, (ii) stating when and how the loss occurred, and if caused by fire or explosion due to ignition, how the fire or explosion originated, so far as the insured knows or believes, (iii) stating that the loss did not occur through any wilful act or neglect or the procurement, means or connivance of the insured, (iv) stating the amount of other insurances and the names of other insurers, (

v) stating the interest of the insured and of all others in that property with particulars of all liens, encumbrances and other charges on that property, 27

(vi) stating any changes in title, use, occupation, location, possession or exposure of the property since the contract was issued, and (vii) stating the place where th e insured property was at the time of loss, (

c) if required by the insurer, give a complete inventory of undamaged property showing in detail quantities and cost of that property, and (

d) if required by the insurer and if practicable, (

i) produce books of account and inventory lists, (ii) furnish invoices and other vouchers verified by statutory declaration, and (iii) furnish a copy of the written portion of any other relevant contract.

(2) The evidence given, produced or furnished under subparagraph (1)(

c) and (

d) of this condition must not be considered proofs of loss within the meaning of Statutory Conditions 12 and 13. FRAUD 7 Any fraud or wilfully false statement in a statutory declaration in relation to the particulars required under Statutory Condition 6 invalidates the claim of the person who made the declaration. WHO MAY GIVE NOTICE AND PROOF 8 Notice of loss under Statutory Condition 6(1)(

a) may be given and the proof of loss under Statutory Condition 6(1)(

b) may be made (

a) by the agent of the insured if (

i) the insured is absent or unable to give the notice or make the proof, and (ii) the absence or inability is satisfactorily accounted for, or 28

(

b) by a person to whom any part of the insurance money is payable, if the insured refuses to do so, or in the circumstances described in clause (

a) of this condition. SALVAGE 9(1) In the event of loss or damage to insured property, the insured must take all reasonable steps to prevent further loss or damage to that property and to prevent loss or damage to other property insured under the contract, including, if necessary, removing the property to prevent loss or damage or further loss or damage to the property.

(2) The insurer must contribute on a prorated basis towards any reasonable and proper expenses in connection with steps taken by the insured under subparagraph (1) of this condition. ENTRY, CONTROL, ABANDONMENT 10 After loss or damage to insured property, the insurer has (

a) an immediate right of access and entry by accredited representatives sufficient to enable them to survey and examine the property, and to make an estimate of the loss or damage, and (

b) after the insured has secured the property, a further right of access and entry by accredited representatives sufficient to enable them to appraise or estimate the loss or damage, but (

i) without the insured’s consent, the insurer is not entitled to the control or possession of the insured property, and (ii) without the insurer’s consent, there can be no abandonment to it of the insured property.

IN CASE OF DISAGREEMENT 11(1) In the event of disagreement as to the value of the insured property, the value of the property saved, the nature and extent of the repairs or replacements required or, if made, their adequacy, or the amount of the loss or damage, those questions must be determined using the applicable dispute resolution process set out in the Insurance Act whether or not the insured’s right to recover under the contract is disputed, and independently of all other questions.

(2) There is no right to a dispute resolution process under this condition until 29

(

a) a specific demand is made for it in writing, and (

b) the proof of loss has been delivered to the insurer. WHEN LOSS PAYABLE 12 Unless the contract provides for a shorter period, the loss is payable within 60 days after the proof of loss is completed in accordance with Statutory Condition 6 and delivered to the insurer. REPAIR OR REPLACEMENT 13(1) Unless a dispute resolution process has been initiated, the insurer, instead of making payment, may repair, rebuild or replace the insured property lost or damaged, on giving written notice of its intention to do so within 30 days after receiving the proof of loss.

(2) If the insurer gives notice under subparagraph (1) of this condition, the insurer must begin to repair, rebuild or replace the property within 45 days after receiving the proof of loss and must proceed with all due diligence to complete the work within a reasonable time. NOTICE 14(1) Written notice to the insurer may be delivered at, or sent by registered mail to, the chief agency or head office of the insurer in the province.

(2) Written notice to the insured may be personally delivered at, or sent by registered mail addressed to, the insured’s last known address as provided to the insurer by the insured. Recovery by innocent persons 541(1) If a contract contains a term or condition excluding coverage for loss or damage to property caused by a criminal or intentional act or omission of an insured or any other person, the exclusion applies only to the claim of a person (

a) whose act or omission caused the loss or damage, (

b) who abetted or colluded in the act or omission, (

c) who (

i) consented to the act or omission, and (ii) knew or ought to have known that the act or omission would cause the loss or damage, 30

or (

d) who is in a class prescribed by regulation.

(2) Nothing in subsection (1) allows a person whose property is insured under the contract to recover more than the person’s proportionate interest in the lost or damaged property.

(3) A person whose coverage under a contract would be excluded but for subsection (1) must comply with the requirements prescribed in the regulations. Premium notes — mutual insurance 542(1) An insurer may accept a premium note of the insured for insurance and may undertake contracts in consideration of the premium note.

(2) When a premium note is assessable for the losses, expenses and reserve of the insurer, all terms and conditions respecting the premium note must be included in the policy. Limitation of liability clause 543 When a contract evidenced by a policy contains (

a) a deductible clause, (

b) a co-insurance, average or similar clause, or (

c) a conditional or unconditional clause limiting recovery by the insured to a specific percentage of the value of any property insured at the time of loss, the contract must have printed or stamped on the first page in conspicuous bold type the words: This policy contains a clause which may limit the amount payable. and unless these words are so printed or stamped, the clause is not binding on the insured. Rateable contributions 544(1) If, on the happening of loss or damage, there is in force more than one contract covering the loss or damage, the insurers under the respective contracts are each liable to the insured for their 31

rateable proportion of the loss, unless it is otherwise expressly agreed in writing between the insurers.

(2) For the purpose of subsection (1), a contract is deemed to be in force despite any term or condition of it that the contract does not cover, attach, come into force or become insurance until after full or partial payment of any loss under any other contract.

(3) Nothing in subsection (1) affects the validity of any division of the sum insured into separate items, any limits of insurance on specified property, any clause referred to in

section 543 or any contract condition limiting or prohibiting having or placing other insurance.

(4) Nothing in subsection (1) affects the operation of any deductible clause, and (

a) if one contract contains a deductible clause, the prorated proportions of the insurer under that contract must be first ascertained without regard to the deductible clause and then the clause must be applied only to affect the amount of recovery under that contract, and (

b) if more than one contract contains a deductible clause, the prorated proportions of the insurers under those contracts must be first ascertained without regard to the deductible clauses and then the highest deductible must be prorated among the insurers with deductible clauses, and those prorated amounts affect the amount of recovery under those contracts.

(5) Nothing in subsection (4) may be construed to have the effect of increasing the prorated contributions of an insurer under a contract that is not subject to a deductible clause.

(6) Despite subsection (1), insurance on identified articles is a first loss insurance as against all other insurance.

(7) This

section does not apply to a subscription contract issued by 2 or more insurers. Special stipulations 545(1) If a contract contains a stipulation, condition, term, proviso or warranty, other than a prescribed exclusion referred to in subsection (3)(a), that is or may be material to the risk, including, 32

but not restricted to, a provision in respect of the use, condition, location or maintenance of the insured property, the stipulation, condition, term, proviso or warranty is not binding on the insured if it is held to be unjust or unreasonable by the Court before which a question relating to it is tried.

(2) Instead of proceeding under Statutory Condition 11 set out in

section 540, an insurer and an insured may agree in writing to make a joint survey, examination, estimate or appraisal of the loss or damage, in which case the insurer is deemed to have waived its right to make a separate survey, examination, estimate or appraisal of the loss or damage.

(3) No insurer may provide in a contract that includes coverage for loss or damage by fire or by another prescribed peril an exclusion relating to (

a) the cause of the fire or other prescribed peril other than a prescribed exclusion, or (

b) the circumstances of the fire or peril if those circumstances are prescribed.

(4) An exclusion in a contract contrary to subsection (3) is invalid.

(5) For greater certainty, subsection (3) applies in relation to loss or damage by fire however the fire is caused and in whatever circumstances and whether the coverage is under a part of a contract specifically covering loss or damage by fire or under another part. Subrogation of insurer to rights of recovery 546(1) Subject to

section 570(6), an insurer that makes any payment or assumes liability for making any payment under a contract is subrogated to all rights of recovery of the insured against any person and may bring an action in the name of the insured to enforce those rights.

(2) When the net amount recovered by an action or on settlement is, after deduction of the costs of the recovery, not sufficient to provide complete indemnity for the loss or damage suffered, the amount remaining must be divided between the insurer and the insured in the proportion in which the loss or damage has been borne by them. 33

(3) When the interest of an insured in any recovery is limited to the amount provided under a deductible or co-insurance clause, the insurer has control of the action.

(4) When the interest of an insured in any recovery exceeds that referred to in subsection (3) and the insured and the insurer cannot agree as to (

a) the solicitors to be instructed to bring the action in the name of the insured, (

b) the conduct and carriage of the action or any related matters, (

c) any offer of settlement or the apportionment of an offer of settlement, whether an action has been commenced or not, (

d) the acceptance or the apportio nment of any money paid into Court, (

e) the apportionment of costs, or (

f) the launching or prosecution of an appeal, either party may apply to the Court for the determination of the matters in question, and the Court may make any order it considers reasonable having regard to the interests of the insured and the insurer in any recovery in the action or proposed action or in any offer of settlement.

(5) On an application under subsection (4), the only parties entitled to notice and to be heard on the application are the insured and the insurer, and no material or evidence used or taken on the application is admissible on the trial of an action brought by or against the insured or the insurer.

(6) A settlement or release given before or after an action is brought does not bar the rights of the insured or the insurer unless they have concurred in the settlement or release. Electronic communications 547(1) In this

section and

section 548, a reference to “this Act” includes the regulations made under this Act.

(2) If under this Act a record is required or permitted to be provided to a person personally, by mail or by any other means, 34

unless regulations referred to in subsection (4) or under

section 511(1)(g.3) provide otherwise, the record may be provided to the person in electronic form in accordance with the Electronic Transactions Act.

(3) For the purposes of time periods under this Act, a record provided in electronic form is deemed to have been sent by registered mail to the address required under this Act.

(4) The Electronic Transactions Act and subsection (2) do not apply to a record under, or in relation to a provision of, this Act that is excluded from their application by regulation. Regulations 548 The Lieutenant Governor in Council may make regulations (

a) prescribing any matter that is required or permitted to be prescribed under this Subpart; (

b) excluding a record under or a provision of this Act from the application of the Electronic Transactions Act and

section 547(2). Subpart 2 Automobile Insurance

Definitions 549 In this Subpart, (a) “accident” means an accident arising from the use or operation of an automobile; (b) “accident claim” means a claim for loss or damages from bodily injury or death arising from an accident; (c) “basic coverage” means insurance coverage required or provided for under sections 571 and 573; (d) “contract” means a contract of automobile insurance; 35

(e) “insured” means a person insured by a contract whether named in the contract or not and includes any person who is stated in a contract to be entitled to benefits payable under the insurance mentioned in

section 573 whether described in the contract as an insured person or not. Application of Subpart 550(1) This Subpart applies to contracts providing automobile insurance made or renewed in Alberta on or after January 1, 1969.

(2) This Subpart does not apply to contracts insuring only against (

a) loss of or damage to an automobile while in or on described premises, (

b) loss of or damage to property carried in or on an automobile, or (

c) liability for loss of or damage to property carried in or on an automobile.

(3) This Subpart does not apply to a contract providing insurance in respect of an automobile not required to be registered under the Traffic Safety Act unless it is insured under a contract evidenced by a form of policy approved under this Subpart.

(4) This Subpart does not apply to a contract insuring solely the interest of a person who has a lien on, or has as security legal title to, an automobile and who does not have possession of the automobile. Approval of Forms Approval of forms 551(1) No insurer may use a form of application, policy, endorsement or renewal or continuation certificate in respect of automobile insurance other than a form approved by the Superintendent.

(2) An insurer may require additional information in an approved application form, but that additional information does not constitute part of the application for the purposes of

section 554. 36

(3) When, in the opinion of the Superintendent, any provision of this Subpart, including any statutory condition, is wholly or partly inappropriate to the requirements of a contract or is inapplicable by reason of the requirements of any Act, the Superintendent may approve a form of policy, or part of a form of policy, or a form of endorsement, evidencing a contract sufficient or appropriate to insure the risks required or proposed to be insured, and the contract evidenced by the policy or endorsement in the form so approved is effective and binding according to its terms even if those terms are inconsistent with, vary, omit or add to any provision or statutory condition of this Subpart.

(4) Except as to matters mentioned in

section 566, the Superintendent may, if the Superintendent considers it to be in the public interest, approve a form of motor vehicle liability policy or endorsement to a motor vehicle liability policy that extends the insurance beyond that required by this Subpart.

(5) The Superintendent, in granting an approval under subsection (4), may require the insurer to charge an additional premium for the extension and to state that fact in the policy or in any endorsement.

(6) The Superintendent may approve a form of owner’s policy containing insuring agreements and provisions in conformity with this Subpart for use by insurers in general, which, for the purposes of

section 553, is the standard owner’s policy.

(7) When the Superintendent approves a form referred to in subsection (6), the Superintendent must cause a copy of the form to be published in The Alberta Gazette, but it is not necessary for the Superintendent to publish endorsement forms approved for use with the standard owner’s policy.

(8) The Superintendent may revoke an approval given under this section, and no insurer may, after receiving notification of the revocation in writing, use or deliver a form that contravenes the notification.

(9) The Superintendent must, on request of any interested insurer, specify in writing the Superintendent’s reasons for granting, refusing or revoking an approval of a form.

(10) The Superintendent may at any time approve an amendment to any form that was previously approved by the Superintendent 37

under this section, and where the Superintendent does so, the Superintendent must have a copy of the amendment published in The Alberta Gazette, but it is not necessary for the Superintendent to publish an amendment to endorsement forms approved for use with the standard owner’s policy.

(11) Ninety days after the publication of an amendment in The Alberta Gazette or at a later date specified in the Gazette notice, despite anything in this Act and any contract that is then in force, (

a) the amendment is deemed to be incorporated into the previously approved form and into any contract that incorporated that form, and (

b) the amendment becomes otherwise effective.

(12) Despite subsection (11), the amendment also applies to contracts entered into or renewed after the date referred to in that subsection. Application and Policy Agents 552 No person carrying on the business of financing the sale or purchase of automobiles, no automobile dealer or insurance agent and no officer or employee of such a person, dealer or insurance agent may act as the agent of an applicant for the purpose of signing an application for automobile insurance.

Application for insurance 553(1) A copy of the written application, signed by the insured or the insured’s agent, or, if no signed application is made, a copy of the purported application, or a copy of the part of the application or purported application that is material to the contract, must be embodied in, endorsed on or attached to the policy when issued by the insurer.

(2) If no signed written application is received by the insurer prior to the issue of the policy, the insurer must deliver or mail to the insured named in the policy, or to the agent for delivery or mailing to the insured, a form of application to be completed and signed by the insured and returned to the insurer. 38

(3) Subject to subsection (8), the insurer must deliver or mail to the insured named in the policy, or to the agent for delivery or mailing to the insured, the policy or a true copy of the policy and every endorsement or other amendment to the contract.

(4) When a written application signed by the insured or the insured’s agent is made for a contract, the policy evidencing the contract is deemed to be in accordance with the application unless the insurer points out in writing to the insured named in the policy in what respect the policy differs from the application, and in that event the insured is deemed to have accepted the policy unless, within 2 weeks from the receipt of the notification, the insured informs the insurer in writing that the insured rejects the policy.

(5) If the insured rejects the policy under subsection (4), the insurer must refund as soon as practicable the excess of premium actually paid by the insured over the prorated premium for the expired time, but in no event may the prorated premium for the expired time be less than any minimum retained premium specified in the contract.

(6) Despite subsection (5), if the insured failed to disclose material information on the application the knowledge of which would have resulted in the insurer charging a higher premium than what was charged, the amount that the insurer is required to refund under subsection (5) is the excess of premium actually paid by the insured over the short rate premium for the expired time calculated as if the higher premium had been charged.

(7) If the insured does not reject the policy under subsection (4), the insured is deemed to have accepted the policy.

(8) When an insurer uses the standard owner’s policy, it may, instead of issuing the policy, issue a certificate in a form approved by the Superintendent, which, when issued, is of the same force and effect as if it were the standard owner’s policy, subject to the limits and coverages shown on the certificate by the insurer and any endorsements issued concurrently with the certificate or subsequent to the certificate, but at the request of an insured at any time, the insurer must issue the policy and a copy of the written application or purported application as required by subsection (1). 39

(9) When a certificate is issued pursuant to subsection (8), subsection (11) and

section 584(3) apply with all necessary modifications.

(10) When an insurer issues a certificate pursuant to subsection (8), proof of the contents may be given by production of a copy of The Alberta Gazette containing the form of standard owner’s policy approved by the Superintendent.

(11) Every application form and policy must have printed or stamped on it in conspicuous bold type a copy of

section 554(1). Misrepresentation, fraud or violation of condition 554(1) If (

a) an applicant for a contract (

i) gives false particulars of the described automobile to be insured to the prejudice of the insurer, or (ii) knowingly misrepresents or fails to disclose in the application any fact required to be stated in the application, (

b) the insured contravenes a term of the contract or commits a fraud, or (

c) the insured wilfully makes a false statement in respect of a claim under the contract, a claim by the insured is invalid and the right of the insured to recover indemnity is forfeited.

(2) No statement of the applicant may be used in defence of a claim under the contract unless it is contained in the signed written application for the contract or, when no signed written application is made, in the purported application, or part of the application, that is embodied in, endorsed on or attached to the policy.

(3) No statement contained in a copy of the purported application, or part of the application, other than a statement describing the risk and the extent of the insurance, may be used in defence of a claim under the contract unless the insurer proves that the applicant made the statement attributed to the applicant in the purported application or part of the application. 40

Adverse contractual action 555(1) In this section, “adverse contractual action” means (

a) refusing to provide a premium quotation within a reasonable time; (

b) refusing to process an application for automobile insurance; (

c) refusing to issue a contract; (

d) refusing to renew a contract; (

e) terminating a contract; (

f) cancelling a contract; (

g) refusing to provide any coverage or endorsement; (

h) refusing to continue any coverage or endorsement; (

i) any action respecting a contract not referred to in clauses (

a) to (

h) that is prescribed or otherwise described by regulation as adverse contractual action.

(2) This

section applies only to adverse contractual action taken in respect of basic coverage on private passenger vehicles.

(3) An insurer, insurance agent or insurance broker shall not, directly or indirectly, take any adverse contractual action with respect to an insured or an applicant for a contract except for one or more of the following reasons: (

a) the non-payment of a premium or any portion of a premium; (

b) the failure of the insured or the applicant for a contract to inform the insurer or to keep the insurer informed, where requested to do so by the insurer, as to who is the principal driver of the automobile for which the insurance coverage is or is to be issued; (

c) in the case of an insurer that is a provincial or extra-provincial company, the insurer is required to cease to undertake or to offer to undertake insurance in Alberta pursuant to

section 25(2); 41

(

d) the insurer’s licence is suspended or cancelled under

section 54, 55, 819 or 819.1; (

e) in the case of an insurer that is a federally authorized company, the federal Superintendent of Financial Institutions has ordered or otherwise directed the insurer to cease carrying on business or insuring risks in Canada; (

f) the insurer has filed notice under

section 611(3) that the insurer intends to withdraw from the business of automobile insurance; (

g) where permitted by regulation, any reasons not referred to in clauses (

a) to (

f) that are prescribed or otherwise described by regulation.

(4) Where (

a) a premium or any portion of a premium that is owing in respect of a contract is in arrears, (

b) the insurer takes adverse contractual action because those arrears have not been paid, and (

c) the person liable for those a rrears applies to the insurer to renew or issue a contract or to any other insurer to issue a contract, the insurer may refuse to renew or issue a contract to that person, as the case may be, until those arrears are paid to the insurer to which the arrears are owing.

(5) The Lieutenant Governor in Council may make regulations (

a) permitting adverse contractual action to be taken other than under subsection (3)(

a) to (

f) and prescribing or otherwise describing any reasons not referred to in subsection (3)(

a) to (

f) for which adverse contractual action may be taken; (

b) prescribing or otherwise describing any action not referred to in subsection (1)(

a) to (

h) as adverse contractual action; (

c) governing the taking of adverse contractual action; (

d) governing the issuing or renewing of contracts; 42

(

e) governing any transitional matter concerning the application of this

section in respect of matters dealt with under this section; (

f) providing for any matter that the Lieutenant Governor in Council considers advisable for carrying out the purpose and intent of this section.

(6) This

section applies despite any other Act. Statutory conditions 556(1) Subject to sections 551(3), 557 and 584(2), (

a) the conditions set out in this

section are statutory conditions and are deemed to be part of every contract and must be printed in every policy under the heading “Statutory Conditions”, and (

b) no variation or omission of or addition to any statutory condition is binding on the insured.

(2) In this section, “policy” does not include an interim receipt or a binder. Statutory Conditions In these statutory conditions, unless the context otherwise requires, “insured” means a person insured by the contract whether named in the contract or not. MATERIAL CHANGE IN RISK 1(1) The insured named in the contract must promptly notify the insurer or its agent in writing of any change in the risk material to the contract and within the insured’s knowledge.

(2) Without restricting the generality of subparagraph (1) of this condition, “change in the risk material to the contract” includes (

a) any change in the insurable interest of the insured named in the contract in the automobile by sale, assignment or otherwise, except through change of title by succession, death or proceedings under the Bankruptcy and Insolvency Act (Canada), and 43

(

b) in respect of insurance against loss of or damage to the automobile, (

i) any mortgage, lien or encumbrance affecting the automobile after the application for the contract, and (ii) any other insurance of the same interest, whether valid or not, covering loss or damage insured by the contract or any portion of the contract. PROHIBITED USE BY INSURED 2(1) The insured must not drive or operate the automobile (

a) unless the insured is for the time being either authorized by law or qualified to drive or operate the automobile, (

b) while the insured’s licence to drive or operate an automobile is suspended or while the insured’s right to obtain a licence is suspended or while the insured is prohibited under order of any court from driving or operating an automobile, (

c) while the insured is under the age of 16 years or under any other age prescribed by the law of the province in which the insured resides at the time the contract is made as being the minimum age at which a licence or permit to drive an automobile may be issued to the insured, (

d) for any illicit or prohibited trade or transportation, or (

e) in any race or speed test. PROHIBITED USE BY OTHERS

(2) The insured must not permit or allow the use of the automobile (

a) by any person (

i) unless that person is for the time being either authorized by law or qualified to drive or operate the automobile, or (ii) while that person is under the age of 16 years or under any other age prescribed by the law of the province in which the person resides at the time the contract is made as being the minimum age at which a licence or permit to drive an automobile may be issued to the person, 44

(

b) by any person who is a member of the household of the insured while the person’s licence to drive or operate an automobile is suspended or while the person’s right to obtain a licence is suspended or while the person is prohibited under order of any court from driving or operating an automobile, (

c) for any illicit or prohibited trade or transportation, or (

d) in any race or speed test. REQUIREMENTS WHERE LOSS OR DAMAGE TO PERSONS OR PROPERTY 3(1) The insured must (

a) promptly give to the insurer written notice, with all available particulars, of any accident involving loss or damage to persons or property and of any claim made on account of the accident, (

b) verify by statutory declaration, if required by the insurer, that the claim arose out of the use or operation of the automobile and that the person operating or responsible for the operation of the automobile at the time of the accident is a person insured under the contract, and (

c) forward immediately to the insurer every letter, document, advice or writ received by the insured from or on behalf of the claimant.

(2) The insured must not (

a) voluntarily assume any liability or settle any claim except at the insured’s own cost, or (

b) interfere in any negotiations for settlement or in any legal proceeding.

(3) The insured must, whenever requested by the insurer, aid in securing information and evidence and the attendance of any witness, and must co-operate with the insurer, except in a pecuniary way, in the defence of any action or proceeding or in the prosecution of any appeal. REQUIREMENTS WHERE LOSS OR DAMAGE TO AUTOMOBILE 4(1) When loss of or damage to the automobile 45

occurs, the insured must, if the loss or damage is covered by the contract, (

a) promptly give notice of the loss or damage in writing to the insurer with the fullest information obtainable at the time, (

b) at the expense of the insu rer, and as far as reasonably possible, protect the automobile from further loss or damage, and (

c) deliver to the insurer within 90 days after the date of the loss or damage a statutory declaration stating, to the best of the insured’s knowledge and belief, the place, time, cause and amount of the loss or damage, the interest of the insured and of all others in the automobile, the encumbrances on the automobile, all other insurance, whether valid or not, covering the automobile and that the loss or damage did not occur through any wilful act or neglect, procurement, means or connivance of the insured.

(2) Any further loss or damage accruing to the automobile directly or indirectly from a failure to protect it as required under subparagraph (1) of this condition is not recoverable under the contract.

(3) No repairs, other than those that are immediately necessary for the protection of the automobile from further loss or damage, may be undertaken and no physical evidence of the loss or damage may be removed (

a) without the written co nsent of the insurer, or (

b) until the insurer has had a reasonable opportunity to make the inspection for which provision is made in Statutory Condition 5.

(4) The insured must submit to examination under oath and must produce for examination at any reasonable place and time designated by the insurer or its representative all documents in the insured’s possession or control that relate to the matters in question, and the insured must permit extracts and copies of the documents to be made.

(5) The insurer is not liable for more than the actual cash value of the automobile at the time any loss or damage occurs, and the loss 46

or damage must be ascertained or estimated according to that actual cash value with proper deductions for depreciation, however caused, and must not exceed the amount that it would cost to repair or replace the automobile, or any part of the automobile, with material of similar kind and quality, but if any part of the automobile is obsolete and unavailable, the liability of the insurer in respect of the automobile is limited to the value of that part at the time of loss or damage, not exceeding the maker’s latest list price.

(6) Except where a dispute resolution process has been initiated, the insurer, instead of making payment, may, within a reasonable time, repair, rebuild or replace the property damaged or lost with other of similar kind and quality if, within 7 days after the receipt of the proof of loss, it gives written notice of its intention to do so.

(7) There must be no abandonment of the automobile to the insurer without the insurer’s consent.

(8) If the insurer exercises the option to replace the automobile or pays the actual cash value of the automobile, the salvage, if any, vests in the insurer.

(9) In the event of disagreement as to the nature and extent of the repairs and replacements required, or as to their adequacy, if effected, or as to the amount of the loss or damage, those questions must be determined by a dispute resolution process as provided under the Insurance Act before there can be recovery under the contract, whether the right to recover under the contract is disputed or not, and independently of all other questions.

(10) There is no right to a dispute resolution process until (

a) a specific demand for it is made in writing, and (

b) the proof of loss has been delivered. INSPECTION OF AUTOMOBILE 5 The insured must permit the insurer at all reasonable times to inspect the automobile and its equipment. TIME AND MANNER OF PAYMENT OF INSURANCE MONEY 6(1) The insurer must pay the insurance money for which it is liable under the contract within 60 days after the proof of loss has been received by it or, where a dispute resolution 47

process is conducted under Statutory Condition 4(9), within 15 days after the decision is rendered.

(2) The insured may not bring an action to recover the amount of a claim under the contract unless the requirements of Statutory Conditions 3 and 4 are complied with or until the amount of the loss has been ascertained as provided for under Statutory Conditions 3 and 4 or by a judgment against the insured after trial of the issue, or by agreement between the parties with the written consent of the insurer.

WHO MAY GIVE NOTICE AND PROOFS OF CLAIM 7 Notice of claim may be given and proofs of claim may be made by the agent of the insured named in this contract in the case of absence or inability of the insured to give the notice or make the proof, such absence or inability being satisfactorily accounted for or, in the like case or if the insured refuses to do so, by a person to whom any part of the insurance money is payable. TERMINATION 8(1) The contract may be terminated (

a) by the insurer giving to the insured 15 days’ notice of termination by registered mail or 5 days’ written notice of termination personally delivered, or (

b) by the insured at any time on request.

(2) If the contract is terminated by the insurer, (

a) the insurer must refund the excess of premium actually paid by the insured over the prorated premium for the expired time, but in no event may the prorated premium for the expired time be less than any minimum retained premium specified, and (

b) the refund must accompany the notice unless the premium is subject to adjustment or determination as to the amount, in which case the refund must be made as soon as practicable.

(3) If the contract is terminated by the insured, the insurer must refund as soon as practicable the excess of premium actually paid by the insured over the short rate premium for the expired time, but in no event may the short rate premium for the expired term be deemed to be less than any minimum retained premium specified. 48

(4) The 15-day period referred to in subparagraph (1)(

a) of this condition starts to run on the day the registered letter or notification of it is delivered to the insured’s postal address. NOTICE 9(1) Any written notice to the insurer may be delivered at, or sent by registered mail to, the chief agency or head office of the insurer in the province.

(2) Written notice may be given to the insured named in the contract by letter personally delivered to the insured or by registered mail addressed to the insured at the insured’s latest postal address as notified to the insurer.

(3) In this condition, “registered” means registered in or outside Canada. Conditions not part of policy 557(1) Except as otherwise provided in the contract, the statutory conditions set out in

section 556 do not apply to insurance described in

section 586, 587 or 588.

(2) When a contract does not insure against liability for loss or damage to persons and property, Statutory Condition 3 set out in

section 556 is not a part of the policy and may be omitted from the printing of the conditions in the policy.

(3) When a contract does not insure against loss of or damage to the automobile, Statutory Condition 4 set out in

section 556 is not a part of the policy and may be omitted from the printing of the conditions in the policy. Limitation of actions 558(1) An action or proceeding against an insurer under a contract must be commenced (

a) in the case of loss of or damage to the automobile, not later than 2 years after the occurrence of the loss or damage, and (

b) in the case of loss or damage to persons or property, not later than 2 years after the cause of action against the insurer arose.

(2) A policy to which this Subpart applies must contain the following statement: 49

Every action or proceeding against an insurer for the recovery of insurance money payable under the contract is absolutely barred unless commenced within the time set out in the Insurance Act. Motor Vehicle Liability Policies Coverage of owner’s policy 559(1) Every contract evidenced by an owner’s policy insures the insured named in the contract (the “named insured”) and every other person who with the named insured’s consent drives an automobile owned by the named insured that falls within the description or definition of automobile in the contract against liability imposed by law on the named insured or those other persons for loss or damage (

a) arising from the ownership, use or operation of the automobile, and (

b) resulting from bodily injury to or the death of any person and damage to property.

(2) When the contract evidenced by an owner’s policy also provides insurance against liability in respect of an automobile not owned by the named insured, an insurer may stipulate in the contract that the insurance is restricted to those persons who are specified in the contract.

(3) If the insured named in an owner’s policy dies, the following persons are deemed to be the insured under the policy: (

a) the spouse or adult interdependent partner of the deceased insured if residing in the same dwelling place as the deceased insured at the time of the deceased insured’s death; (

b) in respect of the described automobile, a newly acquired automobile that was acquired by the deceased insured prior to the deceased insured’s death and a temporary substitute automobile, all as defined by the policy, (

i) any person having proper temporary custody of the automobile until grant of probate or administration to the personal representative of the deceased insured, and 50

(ii) the personal representative of the deceased insured. Coverage of non-owner’s policy 560 Every contract evidenced by a non-owner’s policy insures the person named in the contract and any other person who is specified in the policy against liability imposed by law on the insured named in the contract or that other person for loss or damage (

a) arising from the use or ope ration of an automobile within the definition of automobile in the policy, other than an automobile owned by or registered in the name of the insured named in the contract or that other person, and (

b) resulting from bodily injury to or the death of any person and loss of or damage to property. Effect of lien on automobile 561 For the purposes of this Subpart, a person is not deemed to be the owner of an automobile by reason only that the person has a lien on the automobile or has legal title to the automobile as security. Territorial limits 562 Insurance under

section 559 or 560 applies to the ownership, use or operation of the insured automobile within Canada and the United States of America and on a vessel travelling between ports of those countries. Rights of unnamed insured 563 Any person insured by but not named in a contract to which

section 559 or 560 applies may recover indemnity in the same manner and to the same extent as if named in the contract as the insured and for that purpose is deemed to be a party to the contract and to have given consideration for the contract. Liability of insurer 564 Every contract evidenced by a motor vehicle liability policy must provide that when a person insured by the contract is involved in an accident resulting from the ownership, use or operation of an automobile in respect of which insurance is provided under the contract and resulting in loss or damage to persons or property, the insurer must 51

(

a) on receipt of notice of loss or damage caused to persons or property, make any investigations, conduct any negotiations with the claimant and effect any settlement of any resulting claims that are considered expedient by the insurer, (

b) defend in the name of and on behalf of the insured and at the cost of the insurer any civil action that is brought against the insured at any time on account of loss or damage to persons or property, (

c) pay all costs taxed against the insured in any civil action defended by the insurer and any interest accruing after entry of judgment on that part of the judgment that is within the limits of the insurer’s liability, and (

d) if the injury is to a person, reimburse the insured for outlay for any medical aid that is immediately necessary at the time. Liability arising from contamination 565 Liability arising from contamination of property carried in an automobile is deemed not to be liability arising from the ownership, use or operation of that automobile. Exceptions to liability of insurer 566 The insurer is not liable under a contract evidenced by a motor vehicle liability policy for any liability (

a) imposed by any workers’ compensation law on any person insured by the contract, or (

b) resulting from bodily injury to or the death of any employee of any person insured by the contract while engaged in the operation or repair of the automobile. Exceptions to liability of insurer 567 The insurer may provide under a contract evidenced by a motor vehicle liability policy that it is not liable for either of the following: (

a) to indemnify any person engaged in the business of selling, repairing, maintaining, servicing, storing or parking automobiles for any loss or damage sustained while engaged in the use or operation of or while working on the 52

automobile in the course of that business unless the person is the owner of the automobile or is the owner’s employee; (

b) for loss of or damage to (

i) property carried in or on the automobile, or (ii) any property owned or rented by or in the care, custody or control of the insured. Exceptions to liability of insurer 568 Subject to the limitations and exclusions of the endorsement, the insurer may provide by endorsement to a contract evidenced by a motor vehicle liability policy that it is not liable for loss or damage resulting from the ownership, use or operation of any machinery or apparatus, including its equipment, mounted on or attached to the automobile while that automobile is at the site of the use or operation of that machinery or apparatus.

Exceptions to liability of insurer 569(1) The insurer may provide under a contract evidenced by a motor vehicle liability policy that it is not liable in any one or more of the following cases: (

a) while the automobile is rented or leased to another person; (

b) while the automobile is used to carry explosives or to carry radioactive material for research, education, development or industrial purposes or for purposes incidental to those purposes; (

c) while the automobile is used as a taxi-cab, public omnibus, livery, jitney or sightseeing conveyance or for carrying passengers for compensation or hire. (2) Subsection (1)(

a) does not include the use by an employee of the employee’s automobile in the business of the employee’s employer for which the employee is paid.

(3) In subsection (1)(b), “radioactive material” means (

a) spent nuclear fuel rods that have been exposed to radiation in a nuclear reactor, (

b) radioactive waste material, 53

(

c) unused enriched nuclear fuel rods, or (

d) any other radioactive material of such quantity and quality as to be harmful to persons or property if its container were destroyed or damaged. (4) Subsection (1)(

c) does not include (

a) the use by an insured of the automobile for the carriage of another person in return for the insured’s carriage in the automobile of the other person, (

b) the occasional and infrequent use by an insured of the automobile for the carriage of another person who shares the cost of the trip, (

c) the use by an insured of th e automobile for the carriage of a temporary or permanent domestic servant of the insured or the insured’s spouse or adult interdependent partner, (

d) the occasional and infrequent use by an insured of the automobile for the transportation of children to or from activities conducted as part of an educational program, or (

e) the use by an insured of th e automobile for the carriage of a client or customer or a prospective client or customer. Reductions of automobile accident claim awards 570(1) In this section, (a) “award” means a judgment or settlement in respect of an accident claim; (b) “prescribed” means provided for in regulations made under subsection (8).

(2) To the extent that an award is for or is determined with reference to loss of earnings, the amount of the award must be reduced by (

a) income tax, if the award is not subjected to income tax, (

b) contributions by employees, and 50% of contributions by self-employed persons, under the Canada Pension Plan (Canada), and 54

(

c) premiums under the Employment Insurance Act (Canada) relating to the state of being employed, that would be or would have been payable on or with reference to the lost earnings, both before and after the award, had the accident not occurred.

(3) The whole of or the portion of an award that is for or is calculated with reference to a head of damages to which any payment in any form specified in subsection (4) relates must be reduced by the aggregate of all payments, both before and after the award, and net of tax, contributions and premiums referred to in subsection (2)(

a) to (

c) paid or payable on those payments, that (

a) are received by or on behalf of the claimant as a result of or otherwise in respect of the accident, (

b) are in any form specified in subsection (4)(

a) to (h), and (

c) relate to that head of damages.

(4) The forms of payment referred to in subsection (3) are (

a) medical, dental, disability, rehabilitation, income continuation or replacement and hospitalization benefits paid on a no-fault basis and received by or on behalf of a resident of a jurisdiction other than Alberta under a contract of automobile insurance, (

b) medical care, accident and sickness benefits comprising medical care or goods or services that are not provided under the Alberta Health Care Insurance Act or, where the claimant is a resident of another jurisdiction, the equivalent legislation of that jurisdiction, or that exceed the limits for that care or those goods or services under that Act or that equivalent legislation, (

c) proceeds of a contract that falls within Subpart 6 or the legislation of another jurisdiction that is equivalent to that Subpart, (

d) benefits under a prescr ibed income continuation or replacement plan or scheme, 55

(

e) benefits under an income replacement plan or scheme referred to in

section 15.1, (

f) disability pensions under the Canada Pension Plan (Canada) or under any equivalent legislation of a jurisdiction outside Canada, (

g) compensation under legislation of another jurisdiction that is equivalent to the Workers’ Compensation Act and its regulations, in respect of disability, medical, dental, rehabilitation or hospitalization expenses, and (

h) any other prescribed payments, benefits or compensation under the laws of any jurisdiction, other than laws referred to in clauses (e), (

f) and (g).

(5) The reference in subsection (3) to payments received is deemed to include circumstances where a legal obligation to make the payments or to provide related benefits referred to in subsection (4) to or on behalf of the claimant (netted, where applicable, as referred to in subsection (3)) has been established or acknowledged before the award.

(6) A person who makes or assumes liability for a payment referred to in subsection (3) is not subrogated to a right of recovery of the insured against another person in respect of that payment.

(7) Nothing in this

section is to be construed as limiting a court’s ability to take into account any premiums or other amounts paid by a claimant in respect of any benefits, policies, plans or compensation in any form specified in subsection (4).

(8) For the purposes of this section, the Lieutenant Governor in Council may make regulations (

a) respecting any matter or thing that may be or is to be prescribed for the purposes of this section, and (

b) defining, for the purposes of this section, any expression used in it and not defined in this Subpart.

(9) This

section does not apply to any accident claim that arose in respect of an accident that occurred before the coming into force of this section. 56

Limits of motor vehicle liability policy 571(1) Every contract evidenced by a motor vehicle liability policy insures, in respect of any one accident, to a limit of not less than $200 000, exclusive of interest and costs, against liability resulting from bodily injury to or the death of one or more persons and loss of or damage to property.

(2) A contract must be interpreted to mean that when, by reason of any one accident, liability results from bodily injury or death and from loss of or damage to property, (

a) claims against the insured arising out of bodily injury or death have priority to the extent of $190 000 over claims arising out of loss of or damage to property, and (

b) claims against the insured arising out of loss of or damage to property have priority to the extent of $10 000 over claims arising out of bodily injury or death.

(3) The insurer may, instead of specifying a limit in the policy for an inclusive amount, specify a limit of liability of at least $200 000, exclusive of interest and costs, against liability resulting from bodily injury to or the death of one or more persons and a limit of liability of at least $200 000, exclusive of interest and costs, against liability for loss of or damage to property.

(4) Nothing in this Subpart precludes an insurer, with respect to a limit or limits in excess of those specified in subsection (1) or (3), from increasing or reducing the limit or limits specified in the contract with respect to the use or operation of the automobile by a named person, but no reduction is effective for a limit less than that required under subsection (1) or (3).

(5) The premium for the insurance required under this

section must be shown separately on the motor vehicle liability policy from the premium for any additional or other benefits under the policy.

(6) Despite subsection (4) but subject to

section 555, no insurer may refuse a request by an insured or an applicant for a contract to increase the limit to one of the following amounts, exclusive of interest and costs, against liability resulting from bodily injury to or the death of one or more persons and loss of or damage to property: (a) $500 000; 57

(b) $1 000 000; (c) $2 000 000. Hospitals Act 572(1) No amount that is required to be paid to the Crown under

Part 5, Division 2 of the Hospitals Act may be shown as a separate amount on (

a) an application for automobile insurance, (

b) a motor vehicle liability policy, or (

c) a certificate referred to in

section 553(8).

(2) This

section is repealed on Proclamation. Accident insurance benefits 573(1) In this section, (a) “benefits” means accident insurance benefits provided for in this

section or in regulations made under subsection (7)(c); (b) “prescribed” means provided for by regulations made under this section.

(2) A contract evidenced by a motor vehicle liability policy insures in respect of an accident, for accident insurance benefits payable to the prescribed person, in or to at least the prescribed amounts and in accordance with or subject to this

section and the prescribed terms, conditions, restrictions and exclusions.

(3) The insurer, on the death of an insured, must pay (

a) death benefits, and (

b) actual funeral costs up to the prescribed maximum amount.

(4) If an insured is totally disabled, the insurer must pay a weekly disability benefit.

(5) The insurer must pay the prescribed medical payments.

(6) Section 588 applies to the benefits. 58

(7) The Lieutenant Governor in Council may make regulations (

a) respecting any matter or thing that may be or is to be prescribed for the purposes of this section; (

b) defining for the purposes of this

section any expression used in it; (

c) increasing the amount of any of the benefits; (

d) establishing or governing a system or process for the examination, assessment and treatment or rehabilitation of bodily injuries suffered by an insured as a result of an accident in respect of which benefits are payable under this section; (

e) governing the payment of any fees, levies or other assessments in respect of a system or process established under clause (d), including, without limitation, regulations respecting (

i) the amount of the fees, levies or other assessments or the manner in which and by whom any of those amounts are to be determined, and (ii) to whom and by whom the fees, levies or other assessments are to be paid; (

f) providing for any matter that the Lieutenant Governor in Council considers advisable for carrying out the purpose and intent of this section. Stipulation in motor vehicle liability policy 574(1) Every motor vehicle liability policy issued in Alberta must provide that, in the case of liability arising out of the ownership, use or operation of the automobile in any province or territory, (

a) the insurer is liable up to the minimum limits established for that province or territory if those limits are higher than the limits established in the policy, (

b) the insurer must not set up any defence to a claim that might not be set up if the policy were a motor vehicle liability policy issued in that province or territory, and 59

(

c) the insured, by acceptance of the policy, constitutes and appoints the insurer as the insured’s irrevocable attorney to appear and defend in any province or territory in which an action is brought against the insured arising out of the ownership, use or operation of the automobile.

(2) A provision in a motor vehicle liability policy in accordance with subsection (1)(

c) is binding on the insured. Excess insurance 575(1) Nothing in this Subpart precludes an insurer from providing under a contract evidenced by a motor vehicle liability policy insurance restricted to a limit in excess of that provided by another designated contract evidenced by a motor vehicle liability policy, whether the designated contract is first loss insurance or excess insurance.

(2) When the contract designated in the excess contract terminates or is terminated, the excess contract is also automatically terminated. Agreements re deductible amounts 576 Nothing in this Subpart precludes an insurer from entering into an agreement with its insured under a contract evidenced by a motor vehicle liability policy providing that the insured will reimburse the insurer in an agreed amount in respect of any claim by or judgment in favour of a third party against the insured, and the agreement may be enforced against the insured according to its tenor.

Coverage under motor vehicle liability and nuclear energy hazard liability policies 577(1) In this section, “nuclear energy hazard” means the radioactive, toxic, explosive or other hazardous properties of prescribed substances under the Nuclear Safety and Control Act (Canada).

(2) When an insured, whether named in the contract or not, is covered under a contract evidenced by a motor vehicle liability policy for loss or damage resulting from bodily injury to or the death of any person or loss of or damage to property arising directly or indirectly out of a nuclear energy hazard and is, whether named in the contract or not, also covered against that loss or damage under a contract evidenced by a policy of nuclear energy 60

hazard liability insurance issued by a group of insurers and in force at the time of the event giving rise to the loss or damage, (

a) the motor vehicle liability insurance is excess to the nuclear energy hazard liability insurance, and the insurer under the contract of motor vehicle liability insurance is not liable to pay beyond the minimum limits established by

section 571, and (

b) an unnamed insured under the contract of nuclear energy hazard liability insurance may, in respect of the loss or damage, recover indemnity under that contract in the same manner and to the same extent as if named in the contract as the insured, and for that purpose the unnamed insured is deemed to be a party to the contract and to have given consideration for the contract.

(3) For the purpose of this section, a contract of nuclear energy hazard liability insurance is deemed to be in force at the time of the event giving rise to the loss or damage even if the limits of liability under the contract have been exhausted. Determining which insurer is liable 578(1) When a person is insured under more than one contract evidenced by a motor vehicle liability policy, whether the insurance is first loss insurance or excess insurance, and a question arises under

section 564(

b) between an insurer and the insured or between the insurers as to which insurer must undertake the obligation to defend in the name of and on behalf of the insured, the insured or any insurer may, whether or not any insurer denies liability under its contract, apply to the Court, and the Court may by order give any directions that appear proper with respect to the performance of the obligation.

(2) The only parties entitled to notice of an application under subsection (1) and to be heard are the insured and the insured’s insurers, and no material or evidence used or taken on the application is admissible on the trial of an action brought against the insured for loss or damage to persons or property arising out of the use or operation of the automobile in respect of which the insurance is provided. 61

(3) An order under subsection (1) does not affect the rights and obligations of the insurers in respect of payment of any indemnity under their respective policies.

(4) When indemnity is provided to the insured under 2 or more contracts and one or more of them are excess insurance, the insurers must, as between themselves, contribute to the payment of expenses, costs and reimbursement for which provision is made in

section 564 in accordance with their respective liabilities for damages awarded against the insured.

Rights of creditors 579(1) Any person who has a claim against an insured for which indemnity is provided by a contract evidenced by a motor vehicle liability policy, even if that person is not a party to the contract, may, on recovering a judgment in respect of the claim against the insured in any province or territory, have the insurance money payable under the contract applied in or toward satisfaction of the judgment and of any other judgments or claims against the insured covered by the contract and may, on the person’s own behalf and on behalf of all persons having such judgments or claims, maintain an action against the insurer to have the insurance money so applied.

(2) No action may be brought against an insurer under subsection (1) after the expiration of one year from the final determination of the action against the insured, including appeals, if any.

(3) A creditor of the insured is not entitled to share in the insurance money payable under any contract unless the creditor’s claim is one for which indemnity is provided for by that contract.

(4) The right of a person who is entitled under subsection (1) to have insurance money applied in or toward the person’s judgment or claim is not prejudiced by (

a) an assignment, waiver, surrender, cancellation or discharge of the contract, or of any interest in or of the proceeds of the contract, made by the insured after the event giving rise to the person’s claim under the contract, (

b) any act or default of the insu red before or after that event in contravention of this Subpart or of the terms of the contract, or 62

(

c) any contravention of the Criminal Code (Canada) or a statute of any province or territory or of any state or the District of Columbia of the United States of America by the owner or driver of the automobile, and nothing mentioned in clause (a), (

b) or (

c) is available to the insurer as a defence in an action brought under subsection (1).

(5) It is not a defence to an action under this

section that an instrument issued as a motor vehicle liability policy by a person engaged in the business of an insurer and alleged by a party to the action to be such a policy is not a motor vehicle liability policy, and this

section applies, with all necessary modifications, to the instrument.

(6) The insurer may require any other insurers liable to indemnify the insured in whole or in

part in respect of judgments or claims referred to in subsection (1) to be made parties to the action and to contribute according to their respective liabilities, whether the contribution is rateable or by way of first loss or excess insurance, as the case may be, and the insured must on demand furnish the insurer with particulars of all other insurance covering the subject-matter of the contract.

(7) When a person has recovered a judgment against the insured and is entitled to maintain an action under subsection (1) and the insurer admits liability to pay the insurance money under the contract, and the insurer considers that (

a) there are or may be other claimants, or (

b) there is no person capable of giving and authorized to give a valid discharge for payment who is willing to do so, the insurer may apply to the Court ex parte for an order for payment of the money into Court, and the Court may make an order accordingly on any notice it thinks necessary.

(8) The receipt of the proper officer of the Court is a sufficient discharge to the insurer for the insurance money paid into Court under subsection (7), and the insurance money must be dealt with as the Court orders on application of any interested person.

(9) Despite anything to the contrary contained in a contract evidenced by a motor vehicle liability policy, every contract 63

evidenced by a motor vehicle liability policy is deemed, for the purposes of this section, to provide all the types of coverage mentioned in

section 569, but the insurer is not liable to a claimant with respect to the coverage in excess of the limits established by

section 571(1).

(10) Despite subsection (4), when one or more contracts provide for coverage of a type mentioned in

section 567 or 568, the insurer may, except as provided in subsection (12), (

a) with respect to that type of coverage, and (

b) as against a claimant, avail itself of any defence that it is entitled to set up against the insured.

(11) Despite subsection (4), when one or more contracts provide for coverage in excess of the limits established by

section 571, the insurer may, except as provided in subsection (12), (

a) with respect to the coverage in excess of those limits, and (

b) as against a claimant, avail itself of any defence that it is entitled to set up against the insured other than a defence arising out of a breach of Statutory Condition 2 set out in

section 556.

(12) When a contract provides coverage for loss or damage resulting from bodily injury to or the death of any person being carried in or on, entering, getting on or alighting from an automobile that is operated in the business of carrying passengers for compensation or hire and insured for that purpose, the insurer may, despite subsection (4), (

a) with respect to that type of coverage in excess of the limits established by

section 571 or the minimum limits required for that type of coverage under any other Act, whichever is the greater amount, and (

b) as against a claimant, 64

avail itself of any defence that it is entitled to set up against the insured other than a defence arising out of a breach of Statutory Condition 2 set out in

section 556.

(13) The insured must reimburse the insurer on demand in the amount that the insurer has paid by reason of this

section that it would not otherwise be liable to pay.

(14) When an insurer denies liability under a contract evidenced by a motor vehicle liability policy, it must, on application to the Court, be made a third party in any action to which the insured is a party and in which a claim is made against the insured by any party to the action in which it is or might be asserted that indemnity is provided by the contract, whether or not the insured enters an appearance or defence in the action.

(15) On being made a third party, the insurer may (

a) contest the liability of the insured to any party claiming against the insured, (

b) contest the amount of any claim made against the insured, (

c) deliver any pleadings in re spect of the claim of any party claiming against the insured, (

d) have production and discovery from any party adverse in interest, and (

e) examine and cross-examin e witnesses at the trial, to the same extent as if it were a defendant in the action.

(16) An insurer may avail itself of subsection (15) even if another insurer is defending, in the name of and on behalf of the insured, an action to which its insured is a party. Regulations re notice of legal representation 580 The Lieutenant Governor in Council may make regulations requiring a lawyer retained by a plaintiff in an action arising out of an accident to give notice of that fact to the defendant’s insurer, including regulations respecting the time at which and the manner in which that notice must be given. 65

Payment as release of claim 581(1) When an insurer makes a payment on behalf of an insured under a contract evidenced by a motor vehicle liability policy to a person who is or alleges to be entitled to recover from the insured covered by the policy, the payment constitutes, to the extent of the payment, a release by the person or the person’s personal representative of any claim that the person or the person’s personal representative or any person claiming through or under the person or by virtue of the Fatal Accidents Act may have against the insured and the insurer.

(2) Nothing in this

section precludes the insurer making the payment from demanding, as a condition precedent to the payment, release from the person or the person’s personal representative or any other person to the extent of the payment.

(3) If the person commences an action, the Court must adjudicate on the matter first without reference to the payment, but in giving judgment the Court must take the payment into account and the person is entitled to judgm

Document details

Collection	Alberta — Bills
Citation	L27 S1 650
Type	bill
Volume / chapter	L27 S1 650
Language	en
Format	json
Source	PROVINCIAL
Identifier	f0cff83c177d57b39bd4bd528bd6323eec7dad77

Source file is stored in the law ingest library (json).