Chapter 11

Question 1

Multiple pieces of legislation govern the conduct of insurance in Canada, list 4 of them

Answer 1

Insurance companies act
Provincial and territorial Insurance acts
Provincial and territorial Highway traffic acts
Regulations made pursuant to various acts

Question 2

What is the insurance companies act?

Answer 2

insurance companies act, which deals with federal licensing and supervision of insurance companies and solvency standards for insurers. These are enforced through the office of the superintendent of financial institutions

Question 3

What is provincial and territorial Insurance acts?

Answer 3

Each province and territory has its own insurance act. All private sector insurance companies operating in the province or territory, brokers and agents, and adjusters are licensed by the superintendent of insurance pursuant to this act. Federally licensed insurers are co-examined by the superintendent, however, in practice the federal license is accepted by the provincial authority

Question 4

Define insurance act

Answer 4

The insurance act sets out the basic provisions of life insurance, accident and sickness insurance, fire insurance, and automobile insurance policies ( and hail insurance policies in some jurisdictions) it prescribed statutory conditions required to form part of each of these types of policies. The insurance act also prescribed certian general rules applicable to all policies issued in the province such as what constitutes a contract, basic contents of a policy, grounds for voiding a policy and certian limitations of action

Question 5

What is the Highway traffic safety act?

Answer 5

In general, the highway traffic safety act deals with registration and licensing of motor vehicles, licensing of drivers, and traffic control vehicles on highways. The ACT has also long played a role in automobile insurance relating to requirements of proof of financial responsibility and safety responsibility.

Question 6

What two acts are tightly interlocked and how ?

Answer 6

the insurance act in the highway traffic safety act have become very tightly interlocked.

Penalties may be imposed for the operation of uninsured motor vehicles. Attached to the highway traffic act are a large number of regulations having the same force of law as the actions of the ACT itself, and which deal with many subjects such as headlights, breaks, special permits, driver’s license points penalties, seat belts, infant seat restraints, motorcycle safety helmets, and safety testing of vehicles.

Question 7

True or false older statutes intended to be all inclusive statements of the law on a particular subject. To change this type of statute requires the act of legislature.

Answer 7

True

Question 8

What kind of documents do modern statutes tend to be ?

Answer 8

modern statutes tend to be skeleton documents sending out the conceptual framework for a statutory objective and then delegating to the lieutenant governor and Council to powerconcept.

Question 9

List Exclusions to regulations

Answer 9

Regulations cannot:
Amend
Alter
Widen
Or narrow the concept of the parent statute and must always confirm to the concept of the statute

Question 10

What is the provincial and territorial superintendents of insurance responsible for?

Answer 10

provincial and territorial superintendents of insurance are responsible for licensing Insurance companies, regulating Insurance products, regulating underwriting, braiding claims, and marketing practices and regulating the solvency and financial security of insurers Incorporated in their province.

Question 11

What does the office of Alberta superintendent of insurance of the Alberta Treasury board and finance regulates?

Answer 11

the office of Alberta superintendent of insurance and the Alberta Treasury board and finance regulates Insurance in Alberta under the insurance act. The Alberta Treasury board and finance is also responsible for budgeting planning, financial management, and economic analysis as well as administration of tax and revenue programs in the province.

Question 12

What does Alberta insurance council?

Answer 12

delberta Insurance Castle is formed under the insurance act and receives delegations from the president of the treasury board and the Minister of finance period it oversees the licensing and regulation of insurance agents, brokers, and independent adjusters and the province of alberta. The AIC has jurisdiction to investigate complaints against Insurance adjusters, brokers, agencies, independent claims adjusters, and adjusting firms and determine if there has been a violation of the insurance act and its accompanying regulations.

Question 13

What does the privacy act cover?

Answer 13

The privacy act covers the personal information–handling practices of federal government departments and agencies. The ACT imposes obligations on federal government departments and agencies to respect the privacy rates of canadians, places the limit on the collection, use, and disclosure of personal information, and provides the individual’s right to access and correct personal information the government of Canada holds about them

Question 14

What is the freedom of information and protection of privacy act?

Answer 14

freedom of information and protection of privacy act sets out the access of and privacy rights of individuals as they relate to public sector in Alberta and the terms under which the public body can collect, use, and disclose a person information of individuals. This includes the provincial government and its agencies, boards, and commissions, local government bodies school restrictions, post-secondary institutions, Healthcare bodies, and police services and commissions.

Question 15

Describe P I P E D A

Answer 15

p i p e d a sets out ground rules for how private sector organizations May collect common use, and disclose personal information in the course of their commercial activities. Insurers, brokers, independent adjusters, another Insurance professionals are bound by the legislation. however, p i p e d a does not apply to an organization that operates holy within the province with legislation that has been deemed substantially similar to Pippa unless the personal information crosses provincial or national borders. And these provinces, organizations and individuals must comply with the provincial legislation. If the personal information is sent out of the province, the organization must comply with the terms of pipeda and well as the provincial laws.

Question 16

Define Alberta’s personal information protection act.

Answer 16

Alberta’s personal information protection act requires private sector organizations to obtain consent for the collection, use, and disclosure personal information and provides individuals with a right of access to their own personal information. Personal information includes any recorded information about an identifiable individual. For automobile insurance, this can include a person’s name, address, driving record, or claims information.

Question 17

Who can an insured contact if they are unhappy with how their aims have been managed or they are unhappy with the outcome of their claims

Answer 17

the provincial and territorial regulations require insurers to designate someone as a complaints liaison officer or ombudsperson. this is the person in church can contact to resolve disputes with the insurer when they believe their claims have not been properly managed or they’re unhappy with the outcome of their claims.

Question 18

Describe the digital privacy act

Answer 18

the digital privacy act strengthens privacy rates and protections for Canadians in their dealings with private sector companies, improves accountability, and provides incentives for organizations to comply with the law. The ACT introduced mandatory breach notification for breaches that pose a real risk of significant harm, and defined in the act, to the federal office of the privacy commissioners of Canada and to the individual whose information has been breached. The ACT also provides for compliance agreements that allowed the OPC to enter into agreements with a non-compliant organization to bring itself into compliance with pipeda rather than take the matter to court.

Question 19

List 2 primary objectives of any special industry program

Answer 19

The immediate availability of a market to agents and brokers and the public

Equitable sharing of the residual market by all insurers

Question 20

What is the facility association ?

Answer 20

the facility association is an unincorporated association of insurers created in 1977. It provides automobile insurance to owners and operators of motor vehicles who may otherwise have difficulty obtaining insurance through the voluntary market.

Question 21

Define vehicle years/car years

Answer 21

A measurement of an insurers exposure. It means an automobile insured for a period of 12 months. for example a single policy providing coverage on a three automobiles for a 6-month term would represent an exposure to the insurer of 1.5 car years

Question 22

In provinces and territories where the association operates what is the guideline to determine whether a risk qualifies for insurance through the voluntary market?

Answer 22

the underwriting rules of the various automobile insurers serve as a guideline to determine whether a risk qualifies for insurance through the voluntary market.

Question 23

How is insurance distributed throughout British columbia? Is there any government programs for insurance availability?

Answer 23

there is no such industry or government programs for insurance availability in British columbia. Such programs are not necessary because the Insurance corporation and British Columbia is a crown corporation with the mandate to provide basic insurance to all drivers in a non-discriminatory manner. This mandate is explicitly stated in the insurance vehicle act so that all people who own and register a vehicle in British Columbia will have the compulsory basic coverage. private sectors complete for extension coverages only. If a risk is undesirable, they can decline to offer extension insurance, but no one will be denied basic coverages.

Question 24

Is there any government programs for insurance availability in Manitoba and saskatchewan?

Answer 24

there is no industry or government programs for insurance availability in Saskatchewan or manitoba. Such programs are not necessary because the government insurers in both provinces must provide basic coverage to all residents who drive registered vehicles that fall within the jurisdiction of the acts governing automobile insurance. Although this requirement is not explicitly stated in either province respective Insurance act it is inferred in various pieces of legislation, so the end result is the same. Private insurers compete for extension coverages only.

Question 25

What is the plan of operation of the facility association?

Answer 25

the operations of the facility association are conducted according to the plan of operation approved by the members and the regulatory authorities. Every insurer license to write automobile liability insurance in any jurisdiction the facility association serves is required by law to become a member and remain a member of the association.

insurers share in the operations of the association based on their market share of automobile business in the jurisdictions where the association operates. The underwriting and claims functions are provided by a limited number of designated members, called servicing carriers, who are compensated by operating and service fees

Question 26

List four manuals of the facility association through its rules of operation

Answer 26

Accounting and statistical manual

Manual rules and rates

Claims guide

Risk sharing pool procedures manual

Question 27

Whom is required to follow the rules of operation as set out in the plan?

Answer 27

Members of the association and servicing carriers

Question 28

True or false in each restriction where the facility association operates all insurers who write automobile liability insurance are members and share in the results.

association results are shared proportionately on the basis of voluntary business written by each insurer

Answer 28

True

True

Question 29

Describe servicing carriers

Answer 29

citizen carriers must issue policies and provide agents and brokers with policyholder service for businesses submitted to them. Insurers who are not designated as such are referred to a non-servicing carrier. although their full members of the facility association, they have no direct involvement in the day-to-day operation of the program. Injured restrictions where are risk sharing pool exist, members have direct involvement with the association because of the pool.

Question 30

How are service carriers compensated by the association?

Answer 30

Service and carriers receive expense allowances agreed to by a membership to compensate them for the cost of acting on the behalf of the association.

Question 31

How are the results of the servicing carriers recorded and by whom is it shared to and how frequently is it shared?

Answer 31

the results of the total industry pool are statistically recorded by the central office of association and then shared by members on a monthly basis.

Question 32

Go over and describe in detail the board of directors of the facility association

Answer 32

The facility association is administered by an elected board of directors, prizing senior officials of member companies, including representatives of servicing and non-servicing carriers. The board also has three broker members, one representing alberta, Northwest territories, none of it, and the yukon, one representing ontario, and one representing Atlantic canada. The board appoints a president and a chief executive officer of the association and also points and operating committee for each restriction made up of servicing and non-servicing carrier representatives and two brokers. these and other appointed committees are responsible for the operation of the association and ensure adherence to the standards of service required of servicing carriers.

Question 33

True or false if agents and brokers have difficulty arranging Insurance in the voluntary market they are unable to use the facility association

In Ontario only, facility association rates do not include a commission.

Answer 33

False if agents and brokers have difficulty arranging Insurance in the voluntary market, they are able to use the facility association.

True

Question 34

True or false each servicing carrier has special accounts with a bank designated by the facility association. All premiums received in claims payments made are processed through these accounts, with such transactions automatically transferred to the central account of the association.

Answer 34

True

Question 35

Explain industry costs relating to facility association

Answer 35

by nature, the operations of the facility association need to be subsidized by the industry. In the case of the association, the premium levels allowed by the government regulators are rarely adequate to cover the losses and expenses. Sharing in the overall operations of the facility association, therefore, requires a contribution by insurers.

Question 36

What provinces does the facility association manages risk sharing pools?

Answer 36

Alberta
New Brunswick
Nova Scotia
Ontario

Question 37

Who would be considered grey private passenger risks?

Answer 37

People who meet the underwriting guidelines but still present higher then average risk

Question 38

True or false only risks that do not meet underwriting guidelines can be considered residual market risks and have policies issued through the facility association

Answer 38

True

Question 39

There are two risk sharing pools that have been operating in Alberta what are they called?

Answer 39

Grid pool and non-grid pool

Question 40

Define grid pool

Answer 40

allows Alberta automobile insurers to transfer private passenger automobile exposures that are subject to the provinces statutory maximum premium

Question 41

Define non-grid pool

Answer 41

enables insurers to transfer any eligible private passenger automobile insurance exposures the underweight, up to the predefined maximum amount. The types of risks transferred to the non-grid pool are gray risks - similar to those transfer to the Ontario risk sharing pool