Legislative Assembly of New Brunswick
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An Act to Amend the Insurance Act

Legislature :
55
Session :
1
Bill No. :
1
Member :
Hon. Mr. Green
First Reading :
2003-7-29
Second Reading :
2003-8-1
Committee of the Whole :
2003-8-7
Amended :
Third Reading :
2003-8-8
Royal Assent :
2003-8-8
Download PDF :
Bill 1

Text of Bill :
Her Majesty, by and with the advice and consent of the Legislative Assembly of New Brunswick, enacts as follows:


1                           The Insurance Act, chapter I-12 of the Revised Statutes, 1973, is amended by adding after section 120 the following:



120.1(1)       For the purpose of this section, an insurer is withdrawing from the business of automobile insurance if the insurer does anything that results or is likely to result in a significant reduction in the amount of gross premiums written by the insurer for automobile insurance in any part of New Brunswick, including any of the following things that have or are likely to have that result:



(a)               refusing to process applications for automobile insurance;



(b)               declining to issue, terminating or refusing to renew contracts of automobile insurance;



(c)                refusing to provide or continue coverages or endorsements in respect of contracts of automobile insurance;



(d)               taking actions that directly or indirectly result in termination of contracts between the insurer and the agents and brokers who solicit or negotiate contracts of automobile insurance on behalf of the insurer;



(e)                reducing the ability of the agents or brokers to solicit or negotiate contracts of automobile insurance on behalf of the insurer;



(f)                reducing the insurer's ability to act as a servicing carrier or ceasing to act as a servicing carrier under the Plan of Operation of the Facility Association;



(g)               taking actions that directly or indirectly result in the termination of any contract between the insurer and the Facility Association; or



(h)               engaging in any activity or failure to act that is prescribed by the regulations.



120.1(2)       An insurer shall not withdraw from the business of automobile insurance except in accordance with this section.



120.1(3)       An insurer that intends to withdraw from the business of automobile insurance shall file with the Superintendent a notice in the form provided by the Superintendent.



120.1(4)       The notice shall specify the date that the insurer intends to begin to withdraw from the business of automobile insurance and shall be filed at least one hundred and eighty days before that date.



120.1(5)       The Superintendent may require the insurer to provide such information, material and evidence as the Superintendent considers necessary in addition to the information, material and evidence required to be provided in the notice.



120.1(6)       The insurer may withdraw from the business of automobile insurance on or after the date specified in the notice under subsection (4).



120.1(7)       Notwithstanding subsection (6), the Superintendent may



(a)               authorize the insurer to withdraw from the business of automobile insurance before the date specified in the notice under subsection (4), or



(b)               prohibit the insurer from withdrawing from the business of automobile insurance until a date specified by the Superintendent that is not later than 90 days after the date specified in the notice under subsection (4).



120.1(8)       The Superintendent may order that the regulations made under paragraph 267.9(1)(a.1) do not apply to a class of contracts, coverages or endorsements specified by the Superintendent to which an insurer is a party.



120.2               An insurer who violates or fails to comply with section 120.1 commits an offence and is liable upon conviction to a fine of not more than one hundred thousand dollars.



120.3               The Lieutenant-Governor in Council may make regulations prescribing any activity or failure to act for the purposes of paragraph 120.1(1)(h).



2                           Section 121.3 of the Act is amended



(a)               by repealing subsection (5) and substituting the following:



121.3(5)       Except as otherwise provided in section 121.31, the Facility Association shall not, and a member of the Facility Association shall not, charge any rates for automobile insurance placed through the Facility Association that have not been approved by the Board of Commissioners of Public Utilities in accordance with this section.



(b)               by repealing subsection (5.1) and substituting the following:



121.3(5.1)   A violation of subsection (5) by the Facility Association or a member of the Facility Association constitutes an offence and the Facility Association or the member, as the case may be, is liable upon conviction to a fine of not less than two hundred and fifty dollars and not more than five thousand dollars.



(c)               by adding after subsection (5.1) the following:



121.3(5.11)             Where a member of the Facility Association is convicted of an offence under subsection (5), the Minister may suspend or cancel the licence of the member.



3                           The Act is amended by adding after section 121.3 the following:



121.31(1)    For the period between July 1, 2003, and June 30, 2004, inclusive, the Facility Association or a member of the Facility Association shall charge rates for automobile insurance that is placed through the Facility Association that are 80% of the rates that were in effect for insurance placed through the Facility Association immediately before July 1, 2003, unless the Facility Association files the rates that it proposes to charge for automobile insurance placed through the Facility Association with the Board of Commissioners of Public Utilities on or after July 1, 2003, and before August 15, 2003, and those rates are approved or varied by the Board.



121.31(2)    The Facility Association or a member of the Facility Association may, with respect to a filing made by the Facility Association on or after July 1, 2003, and before August 15, 2003, but subject to any order made by the Board of Commissioners of Public Utilities subsequently, charge to an insured such of those rates filed that are lower than the rates filed and charged by the Facility Association or the member of the Facility Association immediately before July 1, 2003.



121.31(3)    The Facility Association shall notify the Board of Commissioners of Public Utilities before August 15, 2003, if it or any of its members intend to act under subsection (2).



121.31(4)    Where the Facility Association files rates on or after July 1, 2003, and before August 15, 2003, the date on which the rates are to be effective shall be deemed to be July 1, 2003, and any order of the Board of Commissioners of Public Utilities made in respect of the filing shall be made effective as of July 1, 2003, and full force and effect shall be given to such order in any court of competent jurisdiction.



121.31(5)    Whether or not the Facility Association files for a change in rates on or after July 1, 2003, and before August 15, 2003, the Facility Association shall next file rates it proposes to charge for automobile insurance placed through the Facility Association with the Board of Commissioners of Public Utilities before June 1, 2004, but the rates so filed shall not be effective before July 1, 2004.



121.31(6)    The Board of Commissioners of Public Utilities shall, with respect to any filing made by the Facility Association on or after July 1, 2003, and before August 15, 2003, act expeditiously and make all reasonable efforts to complete all matters in respect of the filing promptly.



121.31(7)    A member of the Facility Association shall, pursuant to any reduction of rates under this section, reimburse a person in respect of any excess premium paid by the person to the member on a contract of automobile insurance placed through the Facility Association within forty-five days after



(a)               August 15, 2003, if the Facility Association does not file rates with the Board of Commissioners of Public Utilities before that date, or



(b)               the date that the Board of Commissioners of Public Utilities makes an order approving or varying the rates, if the Facility Association files rates before August 15, 2003.



121.31(8)    If a member of the Facility Association violates or fails to comply with subsection (7), the member commits an offence and is liable upon conviction to a fine of not less than two hundred and fifty dollars and not more than five thousand dollars.



4                           Subsection 267.2(2) of the Act is repealed and the following is substituted:



267.2(2)       Except as otherwise provided in sections 267.21 and 267.5, an insurer may charge the rates filed in accordance with this section as of the date specified under paragraph (1.1)(b).



5                           The Act is amended by adding after section 267.2 the following:



267.21(1)    For the period between July 1, 2003, and June 30, 2004, inclusive, an automobile insurer shall charge rates for automobile insurance that are 80% of the rates that were in effect for the insurer immediately before July 1, 2003.



267.21(2)    Subject to subsection (3), the rates prescribed in subsection (1) do not apply to an automobile insurer if the insurer has filed or files the rates it charges or proposes to charge for automobile insurance with the Board on or after June 13, 2003, and before August 15, 2003.



267.21(3)    Where an insurer withdraws a filing made on or after June 13, 2003, and before August 15, 2003, the rates prescribed under subsection (1) apply as though the insurer had never made such a filing.



267.21(4)    Where an insurer files rates it charges or proposes to charge for automobile insurance with the Board on or after June 13, 2003, and before August 15, 2003, the date specified in the filing for the effective date of the rates shall be deemed to be July 1, 2003.



267.21(5)    Notwithstanding subsection 267.5(3), an insurer may, with respect to a filing referred to in subsection (2), but subject to any order of the Board made subsequently, charge to an insured such of those rates filed that are lower than the rates filed and charged by the insurer immediately before July 1, 2003, if the insurer notifies the Board before August 15, 2003, that it intends to do so.



267.21(6)    The Board shall, with respect to filings made by insurers on or after June 13, 2003, and before August 15, 2003, act expeditiously and make all reasonable efforts to complete all matters in respect of those filings promptly.



267.21(7)    An order of the Board in respect of a filing made on or after June 13, 2003, and before August 15, 2003, shall be made effective as of July 1, 2003, and shall be given full force and effect by a court of competent jurisdiction.



267.21(8)    Whether or not an insurer files rates with the Board on or after June 13, 2003, and before August 15, 2003, an insurer shall next file the rates it proposes to charge for automobile insurance with the Board before June 1, 2004, but the date specified on which it proposes to charge those rates shall not be before July 1, 2004.



267.21(9)    An insurer shall, pursuant to any reduction of rates made as a consequence of the application of subsection (1) or a filing made by the insurer on or after June 13, 2003 and before August 15, 2003, reimburse a person in respect of any excess premium paid by the person to the insurer on a contract of automobile insurance no later than forty-five days after



(a)               August 15, 2003, if the insurer does not file rates with the Board before that date,



(b)               the date that a notification is given or an order is made by the Board under section 267.5 with respect to the rates that the insurer may charge, if the insurer filed rates with the Board on or after June 13, 2003, and before August 15, 2003, and did not withdraw the filing, or



(c)                the date an insurer withdraws a filing made on or after June 13, 2003, and before August 15, 2003.



6                           Subsection 267.3(1) of the Act is repealed and the following is substituted:



267.3(1)       Except as otherwise provided in section 267.21, no automobile insurer shall charge rates that are not permitted to be charged in accordance with the provisions of this Act.



7                           Section 267.7 of the Act is amended



(a)               by repealing subsection (1) and substituting the following:



267.7(1)       Subject to subsections (3) and (4), an insurer who violates or fails to comply with the provisions of sections 267.2 to 267.51 or the regulations commits an offence and is liable upon conviction to a fine of not less than two hundred and fifty dollars and not more than five thousand dollars.



(b)               by repealing subsection (2) and substituting the following:



267.7(2)       Where an insurer is convicted of an offence under sections 267.2 to 267.51, other than subsection 267.21(9), or the regulations, the Minister may suspend or cancel the licence of the insurer.



(c)               by adding after subsection (2) the following:



267.7(3)       An insurer shall not be charged with an offence under subsection 267.21(1) if the insurer was charging the rates that were in effect for that insurer immediately before July 1, 2003, and the offence occurred on or after July 1, 2003, and before forty-five days after



(a)               August 15, 2003, if the insurer did not file rates with the Board on or after June 13, 2003, and before August 15, 2003, or



(b)               the date the insurer withdraws a filing made on or after June 13, 2003, and before August 15, 2003.



267.7(4)       An insurer shall not be charged with an offence under subsection 267.21(5) if the Board subsequently orders that a rate be changed and the lower rate referred to was charged to an insured before forty-five days after the date on which the Board made the order requiring the rate to be changed.



EXPLANATORY NOTES



Section 1



An insurer who withdraws from the business of automobile insurance in any part of New Brunswick must follow the procedure set out in the Insurance Act. A penalty may be imposed if the insurer fails to comply with the procedure.



Section 2



(a)               The existing provision is as follows:



121.3(5)The Facility Association shall not, and the members of the Facility Association shall not, charge any rates for automobile insurance placed through the Facility Association that have not been approved by the Board of Commissioners of Public Utilities in accordance with this section.



(b)               The existing provision is as follows:



121.3(5.1)A violation of subsection (5) by the Facility Association or its members constitutes an offence to which section 267.7 applies, with the necessary modifications.



(c)                New provision.



Section 3



New provisions.



Section 4



The existing provision is as follows:



267.2(2)       Except as otherwise provided in section 267.5, an insurer may charge the rates filed in accordance with this section as of the date specified under paragraph (1.1)(b).



Section 5



New provisions.



Section 6



The existing provision is as follows:



267.3(1)       On and after the commencement of this section, no automobile insurer shall charge rates that are not permitted to be charged in accordance with the provisions of this Act.



Section 7



(a)               The existing provision is as follows:



267.7(1)       An insurer who fails to comply with the provisions of sections 267.2 to 267.8 or the regulations is guilty of an offence and is liable on summary conviction to a fine of not more than five thousand dollars.



(b)               The existing provision is as follows:



267.7(2)       Where an insurer is convicted of an offence under sections 267.2 to 267.8 or the regulations the Minister may suspend or cancel the licence of the insurer.


(c)                New provisions.

 

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