A - McDonald Flashcards
McDonald
7 legislative matters intra vires of FEDERAL
- Criminal Law
- Trade and Commerce
- Taxation
- Banking
- Bankruptcy and insolvency
- Naturalization and Aliens
- Peace, Order and Good Government of Canada on all matters not withing subjects assigned exclusively to provinces.
McDonald
3 legislative matters exclusive to PROVINCIAL
- Incorporation of companies “with provincial objects”
- Property and civil rights
- Matters of private nature
McDonald
Discuss Citizens Insurance Co v Parsons (1881)
HINT : Citoyen : Constitution.
FACTS
- Company questioned the CONSTITUTION validity of the Ontario Fire Insurance Policy Act
- Act required certain statutory conditions for fire policy in ON
ISSUES
- Is ON fire Act Ultra vires?
- Argued that because COMMERCE is of federal authority, province cannot pass the Act.
- Insurer claims province can’t legislate to deprive federally incorporated insurer of status & capacity
RULING
- ON fire Act is Intra vires
- Federal gvmt can’t regulate an insurer operating in a single province
- Trade means Inter-provincial, not Intra-provincial
- Status & capacity unaffected and insurers are all treated equally, regardless of where they were incorporated
Privy Council confirmed that the Act is valid.
McDonald
Discuss Insurance Reference Case (Attorney General for Canada v Attorney General for Alberta) (1916)
FACTS (1910)
- The Federal Insurance Act (FIA) required a Federal license of all insurers, except if:
- Incorporated by Province, AND
- Operating solely in Province
ISSUE
- Is this version of the FIA intra vires?
RULING
- Privy Council decided it is ULTRA VIRES of Federal Government because:
- Regulation of trade and commerce do not extend to a licensing system of a particular trade
- Federal power to legislate for PEACE, ORDER AND GOOD GOVT OF CANADA cannot trespass over Provincial power to legislate on CIVIL RIGHTS in the Province.
IMPLICATIONS
- A provincial insurer has the capacity, not right to operate in another province as long as that province has granted its permission, without having a federal license.
- A federal insurer has the capacity & right to do business outside its province
- A foreign insurer must obtain federal license to do business in any single province
McDonald
Discuss Re the Insurance Act of Canada (1932)
- A tax is imposed on policyholders of British/foreign companies that are not licensed under Federal Insurance
- Act Privy Council invalidated this.
- Seen as an attempt to interfere with insurance which is provincial power.
McDonald
Discuss Canadian Indemnity Company v Attorney-General of BC (1977)
FACTS
- BC created a compulsory public auto insurance plan
- BC legislature refused to renew the licenses of private insurers
- Insurers sue
ARGUMENTS
- Insurers claimed BC legislation is Ultra vires for 2 reasons
- It relates to regulation of trade, which is Federal
- Province can’t legislate to deprive federally incorporated insurer of status & capacity
RULING
- BC legislature acted within its powers (intra vires)
McDonald
4 concerns of FEDERAL legislation regarding financial soundness of insurers
- Periodic report of financial condition of the company
- Conditions for entry into insurance business
- Control of investment, calculation of assets and claim liabilities
- Matters other than those related to control of insurance that can protect the interest of the policyholders.
McDonald
9 insurance CONTRACT matters of provincial legislation
- Contents of insurance policy
- Insurable interest
- Contract taking effect
- Payment of premium
- Duty to disclose
- Incontestability
- Reinstatement
- Designation of beneficiaries
- Insured dealing with the contract
McDonald
3 insurance TRANSACTION matters of provincial legislation.
- Claims procedure
- Unfair practice
- Licensing of agents
McDonald
Who presides OSFI?
Who appoint SI?
5 Acts administered by OSFI.
- Presided by Minister of Finance
- Governor General appoint Superintendent
- 5 Acts:
- Insurance Company Act
- Bank Act
- Investment Company Act
- Trust and Loan Company Act
- Cooperative Credit Association Act
McDonald
What is the Blue Book?
Annual report presented by OSFI containing financial data of Canadian insurers registered with OSFI.
McDonald
Discuss ICA (Insurance Company Act)
- Applies to all insurers under Federal Charter
- Provides a modern framework by which insurers are regulated
- Enlarge lending and investment powers of insurers
- Gives new powers to diversify
- Allows flexibility to raise money by issuing shares or borrowing
- Insurers should grow stronger and compete internationally
- Revised every 10 years
McDonald
6 considerations from the Minister in order to decide whether to incorporate an insurance company under the Act.
- NATURE and SUFFICIENCY of financial resources
- SOUND BUSINESS PLAN
- BUSINESS RECORD of the applicant
- COMPETENCE and EXPERIENCE of those who operate the company
- Whether it is in the BEST INTEREST OF FINANCIAL SYSTEM in Canada
- That CANADIAN INSURERS are treated favorably in province where foreign insurers operates
McDonald
Requirement for foreign insurance companies to hold adequate assets in Canada under the Insurance Company Act
Must have asset vested in trust in Canada and controlled by Chief Agent or Minister of Finance
McDonald
Discuss: Reference re Reciprocal Insurance Legislation, Attorney-General for Ontario v Reciprocal Insurers (1924)
- In 1917, Parliament passed a new Federal Insurance Act
- Federal tried to amend Criminal Code to make it a offense to accept INSURANCE RISK if not licensed under Federal Insurance Act
- PRIVY COUNCIL decided that these amendments were invalid.
