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An Act to amend The Insurance Act

R.S.M. 1987 Supp., c. 18

An Act to amend The Insurance Act

Cl. 9(1)(c) rep. and sub.

1

Clause 9(1)(c) of The Insurance Act, being chapter I40 of the Re-enacted Statutes of Manitoba, 1987, is repealed and the following clause is substituted therefor:

(c) A record of agents, brokers, adjusters and assistant adjusters licensed or authorized under this Act.

Cl. 26(1)(g) added.

2

Subsection 26(1) of the Act is amended by adding thereto immediately after clause (f) thereof the following clause:

(g) Underwriting members of The Canadian Insurance Exchange.

Subsec. 30(1) rep. and sub.

3

Subsection 30(1) of the Act is repealed and the following subsection is substituted therefor:

Restrictions on granting licence.

30(1)

A licence shall not be granted to a joint stock insurance company that is not licensed as at the first day of June, 1987 unless the company furnishes evidence satisfactory to the superintendent

(a) where by the company is carrying on the business of life insurance, that the company has capital stock of not less than three million dollars bona fide subscribed for, allotted and paid in and in addition has an unimpaired surplus of not less than one million dollars; or

(b) where the company is not carrying on the business of life insurance, that the company has capital stock of not less than two million dollars bona fide subscribed for, allotted and paid in and in addition has an unimpaired surplus of not less than one million dollars.

Subsec. 30(2) rep.

4

Subsection 30(2) of the Act is repealed.

Subsecs. 30(3) and (4) rep. and sub.

5

Subsections 30(3) and (4) of the Act are repealed and the following subsections are substituted therefor:

Further restrictions on granting licences.

30(3)

A licence shall not be granted an insurance company mentioned in clause 26(1)(e), or to an underwriter or syndicate of underwriters operating on the plan known as Lloyd's or an underwriting member of The Canadian Insurance Exchange, except upon proof that

(a) its, or his net surplus of assets over all liabilities exceeds the paid-up capital stock required in the case of a joint stock company under subsection (I), carrying on the same class of insurance; and

(b) its net surplus together with the contingent liability of members, if any, exceeds the subscribed and allotted capital stock required in the case of such a joint stock insurance company.

Restriction on granting licence to mutual insurance company.

30(4)

A licence shall not be granted to a mutual insurance company, except upon proof

(a) that the total amount insured under the contracts of the company (not being one undertaking hail insurance) in force at the expiration of one year from the date of the issue of the initial licence amount to at least two million dollars;

(b) that thereafter the total amount insured under contracts at all times equal two million dollars; and

(c) in the case of a mutual company undertaking hail insurance, that the total amount insured under contracts equal in the aggregate the sum of two million dollars.

Subsec. 43(3) am.

6

Subsection 43(3) of the Act is amended

(a) by striking out the word "and" at the end of clause (e) thereof;

(b) by adding thereto at the end of clause (f) thereof the word "and"; and

(c) by adding thereto immediately after clause (f) thereof the following clause:

(g) underwriting members of The Canadian Insurance Exchange.

Subsecs. 91(2) and (3) rep. and sub.

7

Subsections 91(2) and (3) of the Act are repealed and the following subsections are substituted therefor:

Unfair forms of policy or application.

91(2)

Where an insurer issues a policy or uses a form of application, or where an insurer or agent uses an advertisement, illustration, circular, memorandum or statement that, in the opinion of the superintendent, is unfair, fraudulent, or not in the public interest, the superintendent shall, after hearing the insurer or agent, prohibit

(a) the insurer or agent from issuing or using the form of policy or application; or

(b) the insurer or agent from issuing or using the advertisement, illustration, circular, memorandum or statement.

Insurer guilty of offence.

91(3)

An insurer that issues a policy or uses an application form, after being prohibited from doing so under subsection (2), is guilty of an offence.

Insurer and agent guilty of offence.

91(4)

An insurer or agent that uses an advertisement, illustration, circular, memorandum or statement, after being prohibited from doing so under subsection (2), is guilty of an offence.

Appeal.

91(5)

Where an insurer or agent feels aggrieved by a decision of the superintendent under subsection (2) the insurer or agent may appeal the decision in accordance with section 395.

Cl. 114(3)(g) added.

8

Subsection 114(3) of the Act is amended by adding thereto immediately after clause (f) thereof the following clause:

(g) prescribing financial standards and solvency tests that each class of insurer must meet.

Subsecs. 371(7) to (10) added.

9

Section 371 of the Act is amended by adding thereto immediately after subsection (6) thereof the following subsections:

Restriction due to population.

371(7)

The superintendent shall only issue a licence to an applicant for an insurance agent's licence to conduct the business of an insurance agent in a town or city with a population exceeding 5,000 if the superintendent is satisfied that the sole occupation of the applicant is or will be the business of an insurance agent.

Non-application of subsec. (7).

371(8)

Subsection (7) does not apply to an applicant for a licence to transact only the class of hail insurance or accident and baggage insurance.

Regulation prescribing functions of agent.

371(9)

The Lieutenant Governor in Council may make regulations prescribing the functions that constitute the occupations of the various classes of insurance agents.

Agent may hold out as broker.

371(10)

Where a general insurance agent represents more than one insurer, he may hold himself out publicly as an insurance broker.

Subsec. 373(1) rep. and sub.

10(1)

Subsection 373(1) of the Act is repealed and the following section is substituted therefor:

Expiry and renewal of licence.

373(1)

Subject to subsection (3), every licence expires on the 31st day of May next within one year of its issue but may be renewed on application to the superintendent together with the payment of the prescribed fee.

Subsec. (3) added.

10(2)

Section 373 of the Act is further amended by adding the following subsection after subsection (2):

Regulations to alter renewal date.

373(3)

The Lieutenant Governor in Council may make regulations to alter the expiry dates of insurance agents licences in order to permit the expiry of the licences on their anniversary dates or on some other alternate basis.

Subsec. 375(1) am.

11

Clause 375(1)(e) of the Act is repealed and the following clauses are substituted therefor:

(e) has demonstrated his incompetency or untrustworthiness to transact the business of insurance agency for which the licence was granted; or

(f) has failed or refused to comply with any limitation or conditions placed on the holder of the licence.

Subsec. 378(13) added.

12

Subsection 378 of the Act is amended by adding thereto immediately after subsection (12) thereof the following subsection:

Offence to solicit cancellation of policy.

378(13)

Any person who holds a licence to act as a life insurance agent and who, within one year from the termination of sponsorship of licence by an insurer, solicits an insured, directly or indirectly, to cancel, lapse, forfeit or surrender a policy of insurance with that insurer in order to effect a contract of life insurance with another insurer is guilty of an offence.

Sec. 389 rep. and sub.

13

Section 389 of the Act is repealed and the following section is substituted therefor:

Co-ordinator of licensing appeals.

389(1)

The minister shall appoint a person to act as co-ordinator of licensing appeals for the purposes of this Act.

Appellant to notify co-ordinator.

389(2)

A person wishing to appeal a decision of the superintendent under section 395 shall, within 21 days of receipt of notice of the decision of the superintendent advise the co-ordinator of appeals of the decision of the superintendent that the person is appealing.

Duties of co-ordinator.

389(3)

The co-ordinator of appeals shall arrange for the required facilities, assemble the appeal board, notify the superintendent of the appeal, and notify the superintendent and the appellant of the day, time, date and location for the hearing of the appeal.

List of persons eligible to be appointed to an appeal board.

389(4)

The Lieutenant Governor in Council shall approve a list of persons to act on an appeal board consisting of

(a) persons suitable to act as chairpersons of the appeal board;

(b) suitably qualified lay persons;

(c) persons representative of life insurance companies, general insurance companies, life insurance agents, general insurance agents and insurance adjusters.

Appointment of appeal board.

389(5)

The minister shall, from the list of persons approved by the Lieutenant Governor in Council under subsection (4) appoint one or more appeal boards, each board consisting of five persons and made up as set out in subsection (6).

Composition of appeal board.

389(6)

Of the five persons appointed to an appeal board one person shall be named the chairperson thereof, two shall be lay persons and

(a) where an appeal involves a question involving the licence of a life insurance agent, one person shall be from a life insurance company and one person who is a licensed life insurance agent; or

(b) where an appeal involves the licence of a general insurance agent, one person shall be from a general insurance company and one person who is a licensed general insurance agent.

Appointment of members where classification not represented on list.

389(7)

Where an appeal is launched involving a class of licence and there is no person on the list of person approved by the Lieutenant Governor in Council under subsection (4) representative of the class of licence, the minister may, notwithstanding subsection (6), appoint two persons representative of that classification of licence to the appeal board.

Remuneration and expenses.

389(8)

The members of an appeal board may be paid such remuneration and out-of-pocket expenses incurred by them in the performance of their duties as may be authorized by the Lieutenant Governor in Council.

Oath.

389(9)

Every member of an appeal board shall, before acting on the appeal board, take and subscribe before a person authorized to administer oaths and affirmations for use in the province, and file with the co-ordinator of appeals, an oath or affirmation in the following form:

I , do solemnly swear (or affirm) that I will faithfully, truly, impartially and to the best of my knowledge, skill and ability, perform the duties of a member of an appeal board and that I will not, without due authority in that behalf, disclose or make known any matter or thing which comes to my knowledge by reason of my appointment to an appeal board under subsection 389(6) or (7) of The Insurance Act. So help me God. (Omit last four words where person affirms)

Representation by counsel.

389(10)

A party to an appeal under this section is entitled to be present at the hearing thereof and to be represented by such counsel and advisers as the party may require for the purposes of the appeal,

Hearing de novo and decision of board.

389(11)

An appeal board appointed under subsection (6) or (7) shall proceed by way of hearing de novo and may consider

(a) any material filed or evidence submitted touching on the subject of the appeal;

(b) any other material or evidence which it considers pertinent to the appeal;

and after the conclusion of the hearing and consideration of the evidence addressed at the hearing the appeal board may

(c) dismiss the appeal; or

(d) allow the appeal; or

(e) make such other order or decision as the appeal board considers fît and proper.

Decision of appeal board.

389(12)

A decision of the majority of an appeal board is the decision of the board and the chairperson of the board has a vote in deciding any appeal before the appeal board.

Appeal board may proceed in absence of party.

389(13)

Where a party to an appeal has been duly served with a notice of the appeal and the party fails to attend the hearing of the appeal, the appeal board may proceed to hold the hearing and decide the matter in the absence of that party.

Adjournment of hearings.

389(14)

An appeal board may adjourn the hearing of an appeal before it from time to time as may be necessary and as the appeal board considers advisable.

Written notification of decision.

389(15)

An appeal board shall notify the parties to an appeal of its decision in writing.

Powers of board.

389(16)

An appeal board appointed under this section may summon witnesses and require them to give evidence on oath or affirmation, orally or in writing; and for that purpose, the members of the board have like protection and powers as are conferred upon commissioners appointed under Part V of The Manitoba Evidence Act.

Board to determine procedure.

389(17)

Except as otherwise provided in this Act, the appeal board may determine the procedure to be followed in performing its functions.

Withdrawal of appeal.

389(18)

An appellant may, with the consent of the appeal board, withdraw from an appeal.

Expert witnesses.

389(19)

The minister may

(a) obtain the services of such experts, consultants or advisers as in the opinion of the minister may be required by the superintendent or an appeal board; and

(b) authorize payment for services rendered by persons whose services are obtained under clause (a).

Secs. 395 and 396 rep. and sub.

14

Sections 395 and 396 of the Act are repealed and the following sections are substituted therefor:

Appeal from decision of superintendent.

395(1)

Where the superintendent

(a) refuses to grant a licence to an applicant to act as an agent, broker, adjuster or assistant adjuster; or

(b) reprimands a licensee or places conditions on the licence of an agent, broker, adjuster or assistant adjuster; or

(c) suspends or revokes any of the licences mentioned in clause (a); or

(d) issues a prohibition under subsection 91(2);

the superintendent shall give written reasons therefor; and any person who feels aggrieved by the decision of the superintendent may appeal therefrom to an appeal board in accordance with section 389.

Reinstatement of suspended licence.

395(2)

Where a person's licence is suspended or revoked and the person files an appeal therefrom in accordance with section 389, the person may request the appeal board to reinstate the licence until the final disposition of the appeal; and the appeal board, after consultation with the superintendent or any other person that the board considers advisable, may reinstate the licence subject to such restrictions and conditions as the appeal board considers necessary.

Revocation of reinstatement.

395(3)

An appeal board upon the application of the superintendent or where it considers it advisable may revoke the reinstatement of a licence granted under subsection (2).

Restrictions on licence.

396(1)

A licence may be issued to an insurance agent, or to a broker, adjuster or assistant adjuster subject to such limitations and conditions as the superintendent may prescribe.

Reprimand.

396(2)

A reprimand may be attached to a licence issued to an insurance agent, or to a broker, adjuster or assistant adjuster where it has been determined by the superintendent that the agent, broker, adjuster or assistant adjuster is guilty of conduct which

(a) offends this Act; or

(b) is not in the public interest; or

(c) is not appropriate for an agent, broker, adjuster or assistant adjuster.

Reprimand, etc. to form part of records.

396(3)

A reprimand, suspension, or revocation of a licence, or a condition attached to a licence under this Act forms part of the record of an agent, broker, adjuster or assistant adjuster, as the case may be, licensed or authorized under this Act.

Removal of reprimands, suspensions or conditions.

396(4)

Records of reprimands, suspensions and conditions of licences may at the discretion of the superintendent be removed from the record of an agent, broker, adjuster or assistant adjuster at the end of three consecutive years during which the agent, broker, adjuster or assistant adjuster has not received any further reprimand, suspension or condition of licence.