The Saskatchewan government has set the stage for significant changes to insurance regulation in the province with the enactment of The Insurance Act on May 14, 2015. When the government proclaimsThe Insurance Act into force, it will completely replace the currentSaskatchewan Insurance Act, a statute that was first introduced in 1913 and has remained relatively unchanged over the past century.
The Saskatchewan government’s main goal in enacting The Insurance Act is to modernize the insurance industry, strengthen consumer protection and harmonize the province’s insurance act with the insurance acts in place in Alberta and British Columbia. The Insurance Act is accordingly closely modeled on the provisions of Alberta’sInsurance Act.
Some of the highlights under the new act are as follows:
- Insurers and insurance intermediaries will be required to follow new market conduct standards. Along with a prohibition on unfair practices such as misleading statements or tied selling practices, insurance intermediaries will be prohibited from directly or indirectly giving customers anything of value to induce them to “transact insurance” with an insurer or managing general agent, except as permitted by regulation.
- Insurance agents can be licensed under two new categories: “managing general agents” and “insurer’s representatives.” Managing general agents will have the authority to sponsor other intermediaries.
- Insurers and insurance agents licensed as managing general agents will have to take a greater role in recommending, screening and supervising insurance intermediaries.
- Insurers will have to include new prescribed information in their policies, certificates and communications to policyholders. For instance, insurers will have to notify their policyholders of the applicable limitation period on receipt of a notice of claim.
- Persons other than life insurance companies will be prohibited from trading in life policies (i.e., viatical settlements), except as permitted by regulation.
- The Insurance Councils of Saskatchewan will have new powers to conduct audits and investigations.
- The Superintendent of Insurance will be able to require insurers to conduct an “insurance compliance self-evaluative audit” to evaluate their compliance with the new legislation and other industry standards.
Expected entry into force
Insurance companies and insurance intermediaries will have time to ensure they are in full compliance with the new act – the regulations for The Insurance Act are still being drafted and the government will likely not proclaim the new act into force until sometime in 2016. Even then, The Insurance Act contains transition provisions to assist with the adoption of the new regulatory regime. Importantly, any licenses issued under the current Saskatchewan Insurance Act will continue under the same terms and conditions until they are amended, cancelled or renewed pursuant to The Insurance Act.
Once The Insurance Act comes into force, British Columbia, Alberta, Saskatchewan and Manitoba (thanks to recent substantial amendments to its own Insurance Act) will have largely similar insurance acts, but they will not be identical. Insurers and insurance intermediaries will have to be aware of these differences and ensure they remain fully compliant with the regulatory regime in each jurisdiction.