Bill 2 - An Act to Amend the Insurance Act

BILL 2

An Act to Amend the Insurance Act

Her Majesty, by and with the advice and consent of the Legislative Assembly of New Brunswick, enacts as follows:

1 Section 19.71 of the Insurance Act, chapter I-12 of the Revised Statutes, 1973, is amended by adding after subsection (2) the following:

19.71(3) Where requested by the Attorney General, the Board shall provide him or her with copies of all documents relevant to the hearing.

19.71(4) The Attorney General may intervene at the hearing and make representations that he or she considers to be in the public interest.

2 Paragraph 24(3)(c) of the Act is repealed.

3 Section 94 of the Act is amended by adding after subsection (3) the following:

94(3.1) An amount equal to the costs incurred by the Attorney General with respect to an intervention before the New Brunswick Insurance Board under section 19.71 shall be deemed to be included within the total amount of the expenditure incurred by the Province under subsection (3).

4 Paragraph 95(c) of the Act is repealed and the following is substituted:

(c) fixing the day or days on which licences issued to agents for life insurance, agents for other than life insurance, persons soliciting life insurance on behalf of a fraternal society, brokers, special brokers and adjusters shall expire; and

5 Section 120.1 of the Act is amended

(a) in subsection (4) of the French version by striking out “vingt-quatre mois” and substituting “douze mois”;

(b) by repealing subsection (7) and substituting the following:

120.1(7) Despite subsection (6), the Superintendent may authorize the insurer to withdraw from the business of automobile insurance before the date specified in the notice under subsection (4).

120.1(7.1) Despite subsection (6), the Lieutenant-Governor in Council, on recommendation of the Superintendent, may prohibit the insurer from withdrawing from the business of automobile insurance until a date specified by the Lieutenant-Governor in Council that is not later than six months after the date specified in the notice under subsection (4).

6 Section 226 of the Act is amended

(a) by repealing subsection (6.2);

(b) by repealing subsection (6.3);

226(7) Where the Superintendent approves or amends the form referred to in subsection (6), the Superintendent shall cause a copy of the form or the amendment to be published in The Royal Gazette, but it shall not be necessary for the Superintendent to publish in The Royal Gazette endorsement forms approved for use with the standard owner’s policy.

7 Section 228 of the Act is amended

(a) by repealing subsection (5) and substituting the following:

228(5) Where an insurer adopts the standard owner’s policy, it may, instead of issuing the policy, issue a certificate in the form approved by the Superintendent that when issued shall be of the same force and effect as if it was in fact the standard owner’s policy, subject to the limits and coverages shown on the certificate and any endorsements issued concurrently or subsequently, but at the request of an insured at any time, the insurer shall provide a copy of the standard owner’s policy wording as approved by the Superintendent.

(b) in subsection (7) by striking out “or no frills policy”;

228(8) Prima facie proof of the contents of the standard owner’s policy may be given by the production of what purports to be an insurer’s owner’s policy and proof of the contents of the standard owner’s policy may be given by the production of a copy of the policy and a certificate purporting to be under the hand of the Superintendent that the copy is the standard owner’s policy approved under subsection 226(6), which copy and certificate shall be admissible in evidence without proof of the signature or official position of the Superintendent.

8 Subsection 242.1(1) of the Act is amended by striking out the portion preceding the definition “provincial authority” and substituting the following:

242.1(1) In this section and in sections 242.3 and 242.4

9 Section 242.2 of the Act is repealed.

10 Section 242.3 of the Act is repealed and the following is substituted:

Estimate and payment of levy

242.3(1) The provincial authority shall, before April 1 of each year,

(a) establish an estimate of the amount of the levy applicable on January 1 of the current calendar year, and

(b) inform the Superintendent of the amount of the estimated levy.

242.3(2) The Superintendent shall, before May 15 of each year, give notice to the insurer of the amount of the estimated levy the insurer is obliged to pay.

242.3(3) Each insurer shall on receipt of the notice given under subsection (2) remit to the Superintendent equal quarterly payments as follows:

(a) the first payment shall be made before June 30 of the year in respect of which the estimate is made;

(b) the second payment shall be made before September 30 of the year in respect of which the estimate is made;

(d) the fourth payment shall be made before March 15 of the year following the year in respect of which the estimate is made.

11 Subsection 242.4(1) of the Act is amended by striking out “in the following year”.

12 Section 242.5 of the Act is repealed.

13 The Act is amended by adding before section 243 the following:

Licence revocation

242.6(1) Where an insurer fails to remit any portion of the levy within ninety days of any of the dates of payment set out in subsection 242.3(3), the Superintendent shall report this fact to the Minister and the Minister may, with the approval of the Lieutenant-Governor in Council, and after giving notice to the defaulting insurer and after holding a hearing, revoke the licence of the insurer.

242.6(2) Notice of a revocation under subsection (1) shall be published by the Superintendent once in The Royal Gazette as soon as reasonably practicable after the revocation takes effect.

Interest

242.7 Any portion of the levy remaining unpaid after the date on which it is due bears interest at the rate prescribed by regulation.

Administrator

242.8(1) The Superintendent, without the consent of the policy holders or the defaulting insurer, may appoint an administrator for the automobile insurance contracts of a defaulting insurer whose licence is revoked under section 242.6 and the appointment shall remain in force until revoked by the Superintendent.

242.8(2) The remuneration of an administrator appointed under subsection (1) shall be in the absolute discretion of the Superintendent and all costs including remuneration associated with the appointment of the administrator and reinsurance of the automobile insurance contracts shall be borne by the defaulting insurer.

242.8(3) The administrator appointed under subsection (1) shall have a right of access to, and the defaulting insurer shall provide, all books and records relating to all automobile insurance contracts of the defaulting insurer in force at the time of the revocation of the licence.

Reinsurance

242.9(1) An administrator appointed under section 242.8 may arrange for the reinsurance by some other licensed insurer of all automobile insurance contracts of a defaulting insurer whose licence has been revoked under section 242.6.

242.9(2) Where the licence of a defaulting insurer is revoked under section 242.6, all automobile insurance contracts, the terms and conditions of such contracts and all rights, duties, obligations and liabilities of the insured and insurer thereunder remain in full force and effect until such contracts have been reinsured under subsection (1).

242.9(3) An administrator appointed under section 242.8 may make a valid and effectual assignment to the reinsurer of all right, title and interest of a defaulting insurer whose licence has been revoked, in and to the automobile insurance contracts of the defaulting insurer in force at the time of reinsurance.

242.9(4) Where an assignment of contracts to a reinsurer is made by an administrator under subsection (3), all right, title and interest in the unearned premiums existing in respect of such contracts shall, effective as of the time of reinsurance, vest in the reinsurer and the defaulting insurer shall immediately pay over to the reinsurer an amount equal to the amount of the unearned premiums then in existence.

242.9(5) Where right, title and interest in unearned premiums vests in the reinsurer under subsection (4), the interest so vested in the reinsurer shall constitute a debt owing by the defaulting insurer to the reinsurer and shall be a first charge against all assets of the defaulting insurer in the Province.

14 Section 264 of the Act is amended in the portion following paragraph (b) by striking out “or the New Brunswick No Frills Automobile Policy”.

15 Subsection 267.9(1) of the Act is amended by adding after paragraph (g.2) the following:

(g.3) prescribing the interest rate for the purposes of section 242.7.

16 Section 352 of the Act is amended

(a) in subsection (11) by striking out “for a succeeding year”;

(b) in subsection (17) by striking out “ in the previous licence year” and substituting “in the preceding calendar year”.

17 Subsection 353(4) of the Act is amended by striking out “for each succeeding year”.

18 Subsection 354(4) of the Act is amended by striking out “for each succeeding year”.

19 Subsection 358.1(4) of the Act is amended by striking out “for each succeeding year”.

TRANSITIONAL PROVISION

No frills policies

20 Any no frills policy issued before the coming into force of sections 2, 6, 7 and 14 of this Act remains in force until its expiry or termination in accordance with sections 230 and 230.1 of the Insurance Act, but may not be renewed.

COMMENCEMENT

21 Section 10 of this Act comes into force on January 1, 2008.

EXPLANATORY NOTES

Section 1

New provision.

Section 2

The existing provision is as follows:

24(3) A licence to carry on automobile insurance in the Province is subject to the following conditions: ...

(c) where the licensed insurer offers the standard owner’s policy approved under subsection 226(6), the insurer shall also offer the no frills policy approved under subsection 226(6.2).

Section 3

New provision.

Section 4

The existing provision is as follows:

95 The Lieutenant-Governor in Council may make regulations ...

(c) fixing the day or days upon which licences issued to agents for life insurance, agents for other than life insurance, brokers, special brokers and adjusters shall expire in each year; and

Section 5

(a) A correction is made to the French version.

(b) The existing provision is as follows:

120.1(7) Notwithstanding subsection (6), the Lieutenant-Governor in Council may

(a) authorize the insurer to withdraw from the business of automobile insurance before the date specified in the notice under subsection (4), or

(b) prohibit the insurer from withdrawing from the business of automobile insurance until a date specified by the Lieutenant-Governor in Council that is not later than six months after the date specified in the notice under subsection (4).

Section 6

(a) Amendment consequential to the change made in section 2.

(b) Amendment consequential to the change made in section 2.

Section 7

(a) Amendment consequential to the change made in section 2.

(b) Amendment consequential to the change made in section 2.

Section 8

The existing provision is as follows:

242.1(1) In this section and in section 242.2, 242.3 and 242.4

Section 9

The existing provision is as follows:

242.2(1) The provincial authority shall, within sixty days after the commencement of this section,

(a) establish an estimate of the amount of the levy applicable for the calendar year 1993, and

(b) inform the Superintendent of the amount of the estimated levy.

242.2(2) The Superintendent shall within ninety days after the commencement of this section give notice to the insurer of the amount of the estimated levy the insurer is obliged to pay.

Section 10

The existing provision is as follows:

242.3(1) The provincial authority shall, before October 1, 1993 and before October 1 of each subsequent year,

(a) establish an estimate of the amount of the levy applicable on January 1 of the next calendar year, and

(b) inform the Superintendent of the amount of the estimated levy.

242.3(2) The Superintendent shall before January 15, 1994 and before January 15 of each subsequent year give notice to the insurer of the amount of the estimated levy the insurer is obliged to pay.

242.3(3) Each insurer shall upon receipt of the notice given under subsection (2) remit to the Superintendent equal quarterly payments as follows:

(a) the first payment shall be made before March 15 of the year in respect of which the estimate is made;

(b) the second payment shall be made before June 30 of the year in respect of which the estimate is made;

(d) the fourth payment shall be made before December 31 of the year in respect of which the estimate is made.

Section 11

The existing provision is as follows:

242.4(1) The provincial authority shall annually re-evaluate the accuracy of the levy estimate in the following year and shall make adjustments where necessary.

Section 12

The existing provision is as follows:

242.5(1) Where an insurer fails to remit the levy within the time set for remittance under this Act, the licence of the defaulting insurer respecting automobile insurance shall be automatically suspended and the suspension shall take effect on midnight of the last day for making the remittance.

242.5(2) Where a licence is suspended under subsection (1), the Superintendent may reinstate the licence of the defaulting insurer upon being satisfied that the insurer has remedied the default giving rise to the suspension.

242.5(3) The suspension of the licence of a defaulting insurer under subsection (1) shall not affect the validity of any policy of the insurer and all rights, duties, obligations and liabilities of the insured and insurer under any such policy shall remain in force and effect.

242.5(4) Where a defaulting insurer fails to remedy the default within ninety days, the Superintendent shall report this fact to the Minister and the Minister may, with the approval of the Lieutenant-Governor in Council, and upon giving notice to the defaulting insurer and after holding a hearing, revoke the licence of the insurer.

242.5(5) The Superintendent, without the consent of the policy holders or the defaulting insurer, may appoint an administrator for the automobile insurance contracts of a defaulting insurer whose licence is revoked under subsection (4) and such appointment shall remain in force until revoked by the Superintendent.

242.5(6) The remuneration of an administrator appointed under subsection (5) shall be in the absolute discretion of the Superintendent and all costs including remuneration associated with the appointment of the administrator and reinsurance of the automobile insurance contracts shall be borne by the defaulting insurer.

242.5(7) The administrator appointed under subsection (5) shall have a right of access to, and the defaulting insurer shall provide, all books and records relating to all automobile insurance contracts of the defaulting insurer in force at the time of suspension or revocation of the licence.

242.5(8) An administrator appointed under subsection (5) may arrange for the reinsurance by some other licensed insurer of all automobile insurance contracts of a defaulting insurer whose licence has been revoked under subsection (4).

242.5(9) Where the licence of a defaulting insurer is revoked under subsection (4), all automobile insurance contracts, the terms and conditions of such contracts and all rights, duties, obligations and liabilities of the insured and insurer thereunder remain in full force and effect until such contracts have been reinsured under subsection (8).

242.5(10) Notice of a suspension under subsection (1), reinstatement under subsection (2) or revocation under subsection (4) shall be published by the Superintendent once in The Royal Gazette as soon as reasonably practicable after such suspension, reinstatement or revocation takes effect.

242.5(11) An administrator appointed under subsection (5) may make a valid and effectual assignment to the reinsurer of all right, title and interest of a defaulting insurer whose licence has been revoked, in and to the automobile insurance contracts of the defaulting insurer in force at the time of reinsurance.

242.5(12) Where an assignment of contracts to a reinsurer is made by an administrator under subsection (11), all right, title and interest in the unearned premiums existing in respect of such contracts shall, effective as of the time of reinsurance, vest in the reinsurer and the defaulting insurer shall immediately pay over to the reinsurer an amount equal to the amount of the unearned premiums then in existence.

242.5(13) Where right, title and interest in unearned premiums vests in the reinsurer under subsection (12), the interest so vested in the reinsurer shall constitute a debt owing by the defaulting insurer to the reinsurer and shall be a first charge against all assets of the defaulting insurer in the Province.

Section 13

New provisions.

Section 14

Amendment consequential to the change made in section 2.

Section 15

New provision.

Section 16

(a) The existing provision is as follows:

352(11) A licence issued hereunder shall expire at such time as the regulations provide unless automatically suspended by notice pursuant to subsection (6) hereof or unless revoked or suspended by the Superintendent; but such licence may, in the discretion of the Superintendent, be renewed for a succeeding year upon due application upon a form prescribed by the Superintendent giving such information as he may require and payment of the prescribed fee.

(b) Amendment consequential to the change made in paragraph 16(a).

Section 17

The existing provision is as follows:

353(4) The licence may, in the discretion of the Superintendent, be renewed upon payment of the prescribed fee for each succeeding year without requiring anew the detailed information hereinbefore specified.

Section 18

The existing provision is as follows:

354(4) The licence may, in the discretion of the Superintendent, be renewed for each succeeding year upon payment of the prescribed fee without requiring anew the detailed information required in the case of an original application.

Section 19

The existing provision is as follows:

358.1(4) A licence may, in the discretion of the Superintendent and upon payment of the prescribed fee, be renewed for each succeeding year without requiring anew the detailed information required in the case of an original application.

Section 20

Transitional provision.

Section 21

Commencement date.