Dear Editor,
I note with great interest the Attorney General’s intention to table new legislation to repeal and replace the current Insurance Act of 1998. This is a welcome piece of legislation for which initial consultations commenced during the last administration and a Bill is now being introduced by the current Attorney General. This Bill had the benefit of widespread consultations within the insurance industry. This Bill is intended to strengthen some deficiencies in the current Act and require more rigorous compliance by the industry in keeping with international standards. It is also intended to enhance significant aspects of consumer protection. A Canadian consultant guided the industry during the consultative process.
Even though we welcome the Bill, we wish to implore our legislators to ensure that there are no loopholes in this important piece of legislation and see that it is corrected prior to its passage. There are some glaring deficiencies in Sections 161 and 162 of the new proposed legislation regarding consumer protection. These two clauses deal with the purpose and function of the Arbitration Board regarding individuals and small businesses not registered under the Companies Act. These clauses allow the Arbitration Board to deliberate upon claims regarding quantums ranging from $200,000 to a maximum of $5,000,000.
Firstly, it is our considered opinion that there should be no differentiation between the classes of insureds that can reach out to the Arbitration Board in relation to quantum disputes. Individuals and small businesses as well as incorporated entities can all have quantum disputes, so why exclude one class of insureds from consumer protection laws? They are all consumers. My contention is that all classes of insureds should be allowed to refer quantum disputes to the Arbitration Board. The way the Bill is currently drafted compels a corporation with a quantum dispute claim under $5m to approach the courts directly if they are dissatisfied with the decision of a carrier. Why should a corporation have to revert to our court system to have a small or any quantum dispute resolved? Our legal system has been known to be very lethargic which can only redound to the detriment of our insureds. The courts should only have to be utilized when there is a dispute regarding legal liability.
Secondly, there should be no maximum cap for quantum disputes. It is a known fact that several individuals and small businesses possess huge amounts of assets which are insured and can become the subject of quantum disputes. The situation is similar for incorporated entities. We propose that this maximum cap be removed altogether. In fact, the minimum cap should be raised to at least $500,000 or even $1,000,000, since the Arbitration Board may be overwhelmed with a huge number of quantum disputes regarding motor insurance claims. Surely that was not the intention of these sections of the new Bill and it has the ability to continuously frustrate consumers with valid claims. I urge that this matter be corrected prior to the passage of this important piece of legislation.
Yours faithfully,
Raj Singh
CEO
Raj Singh Insurance Brokers
