NEWS RELEASE

For Immediate Release 2009FIN0010-000331 September 15, 2009

Ministry of Finance

 

INSURANCE ACT CHANGES TO PROTECT CONSUMERS

 

VICTORIA– Legislation to amend and update the Insurance Act will improve protection for consumers in the insurance market, Finance Minister Colin Hansen announced today with the introduction of Bill 6, the Insurance Amendment Act, 2009.

 

“The proposed amendments will improve coverage for consumers, ensure better access to documents, and enhance dispute-resolution mechanisms,” said Hansen. “They are the result of ongoing review and consultation with consumers, insurance companies, insurance brokers and members of the legal community.”

 

Under the amendments, consumers will have a 30-day grace period in which to pay overdue premiums for life and health insurance contracts and ensure their policies remain in force. Consumers will also be provided with a 10-day cooling-off period in which they can rescind a life or health insurance contract.

 

Insurance companies will be required to put in place internal complaint resolution procedures and offer consumers access to ombudsman-type services if disputes cannot be resolved internally. The limitation period in which consumers can make legal claims against insurance companies will be increased to two years from one.

 

The language of the Insurance Act has also been strengthened to ensure that fire coverage includes fires resulting from any cause, except those that are specifically excluded by regulation. In addition to improved protection, this change will provide consumers with more consistency across insurers. The amendments will also protect an “innocent co-insured” who may otherwise be denied coverage due to the wrongdoing of another person.

 

            Further amendments respond to insurance industry needs by reducing red tape and improving efficiency by removing unnecessary requirements and clarifying the legislation. For example, there will now be one set of provisions applicable to all property contracts, thereby avoiding the need to classify the insurance contract as a fire contract or a multi-peril contract.

 

In drafting and finalizing the amendments, British Columbia and Alberta worked closely together to develop a harmonized approach that will allow businesses to operate more effectively in both jurisdictions.

 

 

 

The British Columbia Insurance Act sets out the requirements for insurance contracts, including life, health and property insurance in British Columbia, but does not regulate automobile insurance contracts, which are covered by a separate statute.

 

Proposed changes also include the repeal of the Insurance (Marine) Act. Marine insurance contracts are exclusively a matter of federal jurisdiction, and are subject to the federal Marine Insurance Act.

 

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Media Contact:

Graham Currie Communications Director Ministry of Finance 250 356-2821

 

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