O.C. 426/2010

A.R. 203/2010

November 24, 2010


            The Lieutenant Governor in Council makes the Miscellaneous Provisions Amendment Regulation set out in the attached Appendix.

For Information only

Recommended by:            Minister of Finance and Enterprise

Authority:                             Insurance Act
                                                (section 650)


APPENDIX

Insurance Act

MISCELLANEOUS PROVISIONS
AMENDMENT REGULATION

1   The Miscellaneous Provisions Regulation (AR 120/2001) is amended by this Regulation.

 

2   The following is added after section 7:

Third party liability

7.1(1)  In this section and for the purposes of section 650 of the Act,

                                 (a)    “additional insured” means a partner, officer or employee of an insured named in a S.P.F. No. 6 — Standard Non‑Owned Automobile Policy;

                                 (b)    “lessee” means a person to whom a lessor leases or grants exclusive use of a motor vehicle;

                                 (c)    “lessor” means a lessor as defined in section 187 of the Traffic Safety Act;

                                 (d)    “rentee” means a person to whom a renter rents a motor vehicle;

                                 (e)    “renter” means a renter as defined in section 187 of the Traffic Safety Act.

(2)  Notwithstanding section 650(1) of the Act, if a leased or rented automobile is a motor vehicle as defined in section 1(1)(x) of the Traffic Safety Act and section 187 of the Traffic Safety Act applies, the following rules determine the order in which the third party liability provisions of any available motor vehicle liability policies shall apply in respect of liability arising from or occurring in connection with the ownership or, directly or indirectly, with the use or operation of the leased or rented automobile on or after the day this section comes into force:

                                 (a)    subject to clause (b), insurance available under a contract evidenced by an owner’s policy issued to the lessor or renter is first loss insurance;

                                 (b)    clause (a) does not apply if there is

                                           (i)    insurance available under a contract evidenced by a motor vehicle liability policy under which the lessee or rentee of the automobile is entitled to indemnity as an insured named in the contract, or

                                          (ii)    insurance available under a contract evidenced by a motor vehicle liability policy under which the driver of the leased or rented automobile is entitled to indemnity

                                                 (A)    as an additional insured,

                                                  (B)    as an insured named in the contract,

                                                  (C)    as the spouse or adult interdependent partner of an insured named in the contract who resides with that insured, or

                                                  (D)    as an unnamed insured

                                          and an insurer under a contract described in this clause acknowledges in writing to an insurer under a contract described in clause (a) that the first mentioned insurer is responding to a claim or civil action on behalf of the lessee, rentee or driver;

                                 (c)    if clause (a) does not apply,

                                           (i)    insurance described in clause (b)(ii)(A) is first loss insurance;

                                          (ii)    insurance described in clause (b)(i) is excess insurance to insurance described in clause (b)(ii)(A);

                                         (iii)    insurance described in clause (b)(ii)(B) is excess insurance to insurance described in clause (b)(i);

                                         (iv)    insurance described in clause (b)(ii)(C) is excess insurance to insurance described in clause (b)(ii)(B);

                                          (v)    insurance described in clause (b)(ii)(D) is excess insurance to insurance described in clause (b)(ii)(C);

                                         (vi)    insurance described in clause (a) is excess insurance to insurance described in clause (b);

                                        (vii)    if more than one person is entitled to indemnity under a contract evidenced by one motor vehicle liability policy, each person is deemed, for the purposes of this clause, to be entitled to indemnity under a separate contract evidenced by a motor vehicle liability policy;

                                 (d)    if clause (a) applies because an insurer under a contract described in clause (b) fails to respond on behalf of the lessee, rentee or driver to a claim or civil action, that insurer is liable to indemnify an insurer under a contract described in clause (a) for any liability, costs and expenses incurred as a result of such failure;

                                 (e)    if an insurer under a contract described in clause (b) fails to respond to a claim or civil action on behalf of a lessee, rentee or driver, that insurer is liable to indemnify another insurer that does respond to the claim or civil action under a contract described in clause (b) for any liability, costs and expenses incurred as a result of the failure if, according to clause (c), insurance described in the contract of the insurer who does respond is excess to insurance available under the contract of the insurer who fails to respond.

(3)  Notwithstanding section 620 of the Act, the right of a person insured by but not named in an owner’s policy issued to a lessor or renter to recover indemnity is limited to the maximum amount for which the lessor or renter of the motor vehicle is liable in respect of the same incident in its capacity as lessor or renter as determined by section 187 of the Traffic Safety Act.

(4)  For the purposes of subsection (2),

                                 (a)    if more than one motor vehicle liability policy is required to respond and the priority between those policies is not determined by subsection (2), each insurer is liable only for its rateable proportion of any liability, expense, loss or damage, and

                                 (b)    “rateable proportion” means rateable proportion as defined in section 650(3) of the Act.

 

3   This Regulation comes into force on the coming into force of sections 13 and 14 of the Traffic Safety Amendment Act, 2007 and section 9 of the Traffic Safety Amendment Act, 2009.