O.C. 591/2003

A.R. 382/2003

December 17, 2003

   

A P P E N D I X

Insurance Act

FAIR PRACTICES REGULATION

Table of Contents

Definition 1

Prohibited practices 2

Notice of refusal, termination, change 3

Expiry 4

Related amendment 5

Definition

 

1   In this Regulation, "contract" means a contract of automobile insurance.

Prohibited practices

 

2(1)  An insurer shall not, on or after this Regulation comes into force,

    (a) refuse to issue a contract,

    (b) refuse to renew a contract entered into before, on or after this Regulation comes into force,

    (c) terminate a contract entered into before, on or after this Regulation comes into force, or

    (d) refuse to provide or continue any coverage or endorsement in respect of a contract entered into before, on or after this Regulation comes into force

solely on any one or more of the grounds set out in subsection (3).

(2)  An insurance agent or an insurance broker shall not submit an application for automobile insurance to a servicing carrier of the Facility Association solely on any one or more of the grounds referred to in subsection (3).

(3)  The grounds for the purposes of subsections (1) and (2) are as follows:

    (a) the age of the insured, the applicant or any other person who is or would be an insured under the contract;

    (b)the gender or marital status of the
    insured, the applicant or any other person who is or would be an insured under the contract;

    (c) an individual living in the insured's household holds a valid driver's licence but does not drive or will not be driving the insured's vehicle;

    (d) the age of the vehicle that is or would be described in the contract, unless the vehicle

        (i) is an antique motor vehicle as defined in the Operator Licensing and Vehicle Control Regulation (AR 320/2002), or

        (ii) has been substantially modified for enhanced performance;

    (e) whether the insured, the applicant or any other person who is or would be an insured under the contract

        (i) is or has been insured by the Facility Association,

        (ii) has been refused insurance or refused a renewal of insurance by an insurer,

        (iii) has made a claim under a policy of automobile insurance as a result of an incident for which the insured, applicant or other person was not at fault,

        (iv) has an unsatisfactory claims record, if the claims record includes a claim resulting from an incident for which the insured, applicant or other person was not at fault,

        (v) failed to make a payment to an insurer, other than the first payment of a periodic payment plan, unless the payment was made more than 30 days after the date on which it was due,

        (vi) had a lapse in coverage under a contract for less than 24 months, unless the lapse resulted directly or indirectly from the suspension of the driver's licence of the insured, applicant or other person, or

        (vii) possesses a characteristic that is unrelated to the underwriting of the risk covered by the contract;

    (f) the credit rating of the insured, the applicant or any other person under the contract.

Notice of refusal, termination, change

 

3   An insurer who, on or after this Regulation comes into force,

    (a) refuses to issue a contract,

    (b) refuses to renew a contract entered into before, on or after this Regulation comes into force,

    (c) terminates a contract entered into before, on or after this Regulation comes into force,

    (d) refuses to provide or continue any coverage or endorsement in respect of a contract entered into before, on or after this Regulation comes into force, or

    (e) changes the classification of risk assumed under a contract of automobile insurance, if the change results in an increased premium,

must provide the insured or the applicant with notice of the refusal, termination or change together with clear written reasons that are sufficient to permit the insured or the applicant to determine why the insurer acted as it did without the need to refer to any other information.

Expiry

 

4   For the purpose of ensuring that this Regulation is reviewed for ongoing relevancy and necessity, with the option that it may be repassed in its present or an amended form following a review, this Regulation expires on May 1, 2006.

Related amendment

 

5(1)  The Enforcement and Administration Regulation (AR 129/2001) is amended by this section.

(2)  The Schedule is amended by adding the following after section 4:

        5   Fair Practices Regulation

          - sections 2 and 3.