The Ontario Court of Appeal recently reconfirmed that an insured's duty to cooperate with defence council appointed by its insurer is not subject to a standard of perfection. This case serves as a strong reminder that a breach of the duty to cooperate must be substantial. It shows that, in practice, without real consequences arising from an insured's conduct, there can be no substantial breach of the duty to cooperate.
A recent Alberta Court of Queen's Bench decision demonstrates that policyholders must carefully consider the interplay between an insurance policy and its endorsements. One consideration is the distinction between endorsements that provide standalone coverage and those intended only to modify an existing policy's terms. However, most important is the overarching principle that any limitations of coverage should be clearly stated.
The Ontario Superior Court of Justice recently concluded that insurance policies should be interpreted differently when multiple insurers are involved. This decision runs contrary to the basic rules of contractual interpretation and conflicts with well-established precedent. If followed, it could lead to commercially unreasonable results and erode the benefits of coverage available to insured parties.
An Ontario court recently found that a personal injury claim by a daughter against her mother was covered by homeowner's insurance. While the insurance policy contained an exclusion for claims arising from injury to "any person residing in [the] household", the court concluded that the daughter was a tenant under the policy and therefore the exclusion did not apply. This case serves as a reminder that policyholders' intentions when purchasing insurance can be critically important.
The Department of Finance Canada recently announced the launch of the first of a two-stage consultation process on the federal financial sector legislative and regulatory framework. In this first stage of the process, the department is seeking input on the trends that are highlighted in the paper, the implications of these trends and the areas where action is possible and desirable.
Canada has no public-private terrorism insurance scheme; nor to date has there been any serious groundswell advocating for one. Following recent horrific terrorist attacks, it is not yet clear whether there may be a spillover effect on the pricing/availability of terrorism risk insurance in Canada and, if so, whether Canada's need for a government-backed terrorism insurance scheme might be revisited.
Broad policy exclusions with respect to a host of data-related losses are now commonplace in commercial general liability policies. However, privacy breaches or data loss incidents are now said to be a matter of when and not if. As a result, if an organisation wishes to obtain comprehensive insurance coverage for cyber-related risks, the insurance – to the extent available – must be thoughtfully and deliberately purchased.
Insurers and other insurance professionals have traditionally been well positioned to drive improvements in risk management processes. Cyber-security risk is a modern phenomenon which has arisen in the electronic information and internet age, and the insurance industry is demonstrating that it can play a key role both in educating and equipping organisations to manage this emerging risk, and in providing insurance protection.
Insurers in Canada are required to implement a system of enterprise-wide risk management that identifies the inherent risks in their activities and manages those risks to appropriately defined levels. Recent regulatory initiatives include revised guidelines on corporate governance and regulatory compliance management and a new guideline on own risk and solvency assessment.
The Office of the Superintendent of Financial Institutions (OSFI) has released draft Guideline E-21 – Operational Risk Management for federally regulated financial institutions (FRFIs), including insurance companies. The guideline identifies the appropriate framework and processes that OSFI expects FRFIs to maintain in order to mitigate operational risk.
The Office of the Superintendent of Financial Institutions Canada has recently proposed several revisions to the Minimum Capital Test Guideline that will take effect in 2016, the objective of which is to improve regulatory risk-based capital guidance. The revisions add further provisions for equity risk exposures and amend the wording of the guideline to incorporate clarifications and enhance consistency.
The final Mutual Property and Casualty Insurance Company with Non-mutual Policyholders Conversion Regulations and Mutual Property and Casualty Insurance Company Having Only Mutual Policyholders Conversion Regulations were recently published. They reflect Parliament's twin objectives of ensuring the equitable treatment of mutual and non-mutual policyholders and establishing a transparent, orderly demutualisation process.
The Department of Finance has published two draft regulations under the Insurance Companies Act which, if implemented, would allow the demutualisation of federally regulated mutual property and casualty insurance companies ('P&C mutuals'). This would allow P&C mutuals to convert from policyholder-based ownership to share-based ownership and subsequently to issue shares on public markets.
The Saskatchewan minister of justice and attorney general has introduced Bill 177, which will implement the new Insurance Act and repeal the Saskatchewan Insurance Act. The proposed act includes significant changes to address market conduct and unfair practices, and will introduce insurance compliance self-evaluative audits.
The Office of the Superintendent of Financial Institutions is seeking to produce a revised capital guideline for life insurers that takes into account developments in the areas of financial reporting, actuarial methodology, economic capital and financial theory and thereby better assesses their solvency risk. Industry stakeholders are invited to continue to provide input in order to assist with the framework's development.
We know the law, but how well do we know our regulators? In an era where regulation is surpassing law on the radars of most in-house counsel and other risk managers, this question has never been more pressing. How do we best navigate regulators in order not only to get the best results, but also to preserve and continue good relations?
The Office of the Superintendent of Financial Institutions Canada has announced revisions to the Minimum Capital Test Guideline that will come into effect on January 1 2015. The revisions are designed to create a more vigorous risk-oriented test that aligns capital requirements to the level of risk encountered by the property and casualty insurance industry.
The Office of the Superintendent of Financial Institutions Canada (OSFI) has published a draft revised Guideline E-13 entitled "Regulatory Compliance Management". The purpose of the update is to align OSFI's guidance on regulatory compliance management better with the revised corporate governance guideline, as well as with OSFI's supervisory framework and assessment criteria.
The Quebec Superior Court has ordered Manulife Financial to release without redaction all 63 documents sought by the plaintiffs in a class action suit that related to interactions with and interventions by Manulife's federal regulator. The case highlights the question of the circumstances in which interactions between the regulator and regulated entities should be shielded from use by plaintiffs in suits against the regulated entities.
The Ontario Court of Appeal recently released a decision which, among other things, focused on exercising the discretionary relief from forfeiture power available to Ontario courts under both the Courts of Justice Act and the Ontario Insurance Act. The decision highlights a growing trend of avoiding labels and analysing the underlying principles.