Insurance Contracts - Recovery by Innocent Persons
Regulation - LGIC
Bill or Act:
Summary of Decision:
The regulation prescribes the following:
o For the purpose of section 129.1 of the Insurance Act, all classes of persons other than natural persons;
o An innocent co-insured is required to cooperate with the insurer and submit to an examination under oath, if the insurer requests; and
o An innocent co-insured is required to produce for examination all documents related to the loss or damage
Analysis of Regulatory Impact:
The regulation creates minimal financial impact to insurers and no administrative or operational costs associated with the processing of innocent co-insured claims.
January 16, 2018
Summary of Proposal:
On December 14, 2017, the Stronger, Fairer Ontario Act (Budget Measures), 2017 received Royal Assent. The legislation included amendments to the Insurance Act to provide increased protection for innocent co-insured policyholders by prohibiting insurance companies from denying their claims for recovery.
These amendments, once proclaimed in force, will add a new section 129.1 to the Insurance Act, which, along with the proposed regulation, would create an exception to exclusionary clauses in insurance policies that exclude recovery of loss resulting from a criminal or intentional act or omission by a policyholder. The exception permits recovery by an innocent co-insured policyholder who was not involved in the criminal or intentional act or omission.
Further, section 129.1 provides that an innocent co-insured person who makes a claim for recovery would be required to comply with requirements prescribed in regulation. For this purpose, the regulation prescribes that an innocent co-insured is required to cooperate with the insurer and to produce all relevant documents for examination by the insurer.
Insurance Policy Unit
Financial Institutions Policy Branch
Ministry of Finance
95 Grosvenor Street
Frost Building North, 4th Floor
April 20, 2018