Bill 171, Fighting Fraud and Reducing Automobile Insurance Rates Act, 2014

Sousa, Hon Charles Minister of Finance

Current Status: Consideration by Standing Committee on General Government

Viewing: Original (current version) pdf

Bill 171                                                       2014

An Act respecting insurance system reforms and repair and storage liens

Her Majesty, by and with the advice and consent of the Legislative Assembly of the Province of Ontario, enacts as follows:

Insurance Act

   1.  The definition of “Director” in section 1 of the Insurance Act is repealed.

   2.  Section 6 of the Act is repealed.

   3.  Subsection 7 (4) of the Act is repealed.

   4.  Section 8 of the Act is repealed.

   5.  Section 9 of the Act is repealed.

   6.  Section 11 of the Act is repealed and the following substituted:

Evidence of persons who conducted certain proceedings

   11.  (1)  A person who conducted a proceeding described in subsection (2) shall not be required to testify in a civil proceeding or in a proceeding before any tribunal respecting the proceeding described in subsection (2) or respecting information obtained in the discharge of the person’s duties under this Act.

Proceedings

   (2)  The proceedings referred to in subsection (1) are mediations, evaluations and arbitrations under sections 279 to 287, as those sections read immediately before being repealed by section 14 of the Fighting Fraud and Reducing Automobile Insurance Rates Act, 2014.

   7.  Subsection 20 (1) of the Act is repealed and the following substituted:

Exclusive jurisdiction

   (1)  This section applies with respect to proceedings under this Act before the Tribunal or the Superintendent.

   8.  Section 21 of the Act is repealed.

   9.  Section 22 of the Act is repealed.

   10.  Clause 25 (2) (g) of the Act is repealed and the following substituted:

  (g)  stating whether a document or notification was received or issued by the Superintendent.

   11.  (1)  Paragraph 25 of subsection 121 (1) of the Act is repealed.

   (2)  Paragraph 25.2 of subsection 121 (1) of the Act is repealed and the following substituted:

25.2 governing the assignment of statutory accident benefits under Part VI, including the application of sections 279 to 282 to persons to whom the benefits are assigned;

   (3)  Paragraph 26 of subsection 121 (1) of the Act is repealed and the following substituted:

  26.  governing proceedings before the Licence Appeal Tribunal under section 280, including imposing time limits or limitation periods;

   (4)  Paragraph 27 of subsection 121 (1) of the Act is repealed.

   (5)  Paragraph 28.1 of subsection 121 (1) of the Act is amended by striking out “section 393 and sections 397 to 401 or from any provision of those sections” and substituting “subsection 392.2 (6) or 397 (7) or section 401”.

   (6)  Paragraph 28.3 of subsection 121 (1) of the Act is repealed.

   (7)  Subsection 121 (1) of the Act is amended by adding the following paragraph:

37.0.2 governing assessments under section 282;

   (8)  Clause 121 (4) (b) of the Act is repealed and the following substituted:

  (b)  may prescribe the burden of proof and standard of proof applicable in a proceeding before the Licence Appeal Tribunal under section 280;

   12.  Section 258.3 of the Act is amended by adding the following subsection:

Same

   (8.1)  Subsection 128 (2) of the Courts of Justice Act does not apply in respect of the calculation of prejudgment interest for damages for non-pecuniary loss in an action referred to in subsection (8).

   13.  Subsection 275 (5) of the Act is repealed and the following substituted:

Stay of arbitration

   (5)  No arbitration hearing shall be held with respect to indemnification under this section if, in respect of the incident for which indemnification is sought, any of the insurers and an insured are parties to a proceeding before the Licence Appeal Tribunal under section 280 or to an appeal from such a proceeding.

   14.  Sections 279 to 288 of the Act are repealed and the following substituted:

Definitions

   279.  For the purposes of sections 280 to 283,

“insured person” includes a person who is claiming funeral expenses or a death benefit under the Statutory Accident Benefits Schedule; (“personne assurée”)

“Licence Appeal Tribunal” means the Licence Appeal Tribunal established under the Licence Appeal Tribunal Act, 1999. (“Tribunal d’appel en matière de permis”)

Resolution of disputes

   280.  (1)  This section applies with respect to the resolution of disputes in respect of an insured person’s entitlement to statutory accident benefits or in respect of the amount of statutory accident benefits to which an insured person is entitled.

Application to Tribunal

   (2)  The insured person or the insurer may apply to the Licence Appeal Tribunal to resolve a dispute described in subsection (1).

Limit on court proceedings

   (3)  No person may bring a proceeding in any court with respect to a dispute described in subsection (1), other than an appeal from a decision of the Licence Appeal Tribunal or an application for judicial review.

Resolution in accordance with Schedule

   (4)  The dispute shall be resolved in accordance with the Statutory Accident Benefits Schedule.

Orders, powers and duties

   (5)  The regulations may provide for and govern the orders and interim orders that the Licence Appeal Tribunal may make and may provide for and govern the powers and duties that the Licence Appeal Tribunal shall have for the purposes of conducting the proceeding.

Orders for costs, other amounts

   (6)  Without limiting what else the regulations may provide for and govern, the regulations may provide for and govern the following:

    1.  Orders, including interim orders, to pay costs, including orders requiring a person representing a party to pay costs personally.

    2.  Orders, including interim orders, to pay amounts even if those amounts are not costs or amounts to which a party is entitled under the Statutory Accident Benefits Schedule.

Protection of benefits after Tribunal resolution

   281.  (1)  After the Licence Appeal Tribunal issues a decision, the insurer shall not reduce benefits to the insured person on the basis of an alleged change of circumstances, alleged new evidence or an alleged error except as provided under this section.

When benefits may be reduced

   (2)  The insurer may reduce benefits if,

  (a)  the insured person agrees;

  (b)  the insurer is authorized to do so as a result of a successful appeal of the Licence Appeal Tribunal’s decision; or

   (c)  the insurer is authorized to do so by the Licence Appeal Tribunal.

Assessment of dispute resolution costs

   282.  (1)  The Lieutenant Governor in Council may, in accordance with the regulations, assess all insurers that have issued motor vehicle liability policies in Ontario for expenses and expenditures of the Licence Appeal Tribunal relating to disputes described in subsection 280 (1).

Same

   (2)  If an assessment is made under subsection (1), the share of a particular insurer shall be determined in the manner prescribed by regulation, which may take into account the degree of usage made of the Licence Appeal Tribunal that is specified in the regulations.

Same, fees received

   (3)  In setting an assessment under subsection (1), the Lieutenant Governor in Council shall take into account the fees received from insurers and insured persons in respect of disputes described in subsection 280 (1).

Insurer’s duty to pay

   (4)  An insurer shall pay the amount assessed against it.

Same

   (5)  If an insurer fails to pay an assessment made under subsection (1), the Superintendent may suspend or cancel the insurer’s licence.

Same

   (6)  The Superintendent may revive the licence of an insurer whose licence was suspended or cancelled under subsection (5) if the insurer pays all amounts owing by the insurer under this section.

Transition — regulations

   283.  (1)  The Lieutenant Governor in Council may make regulations,

  (a)  providing for transitional matters in connection with the resolution of disputes described in subsection (2);

  (b)  governing when a dispute arises and when it is finally determined for the purposes of clause (2) (a);

   (c)  providing for transitional matters in connection with the coming into force of the following provisions of the Fighting Fraud and Reducing Automobile Insurance Rates Act, 2014:

           (i)  Sections 1 to 10, subsections 11 (1) to (4) and (6) to (8) and sections 13 and 14, which amend this Act.

          (ii)  Sections 24 to 27, which amend the Financial Services Commission of Ontario Act, 1997.

         (iii)  Section 30, which amends the Motor Vehicle Accident Claims Act.

Unresolved prior disputes

   (2)  The disputes referred to in clause (1) (a) are disputes that,

  (a)  arise before the transition date but are not finally determined before that date; and

  (b)  are in respect of an insured person’s entitlement to statutory accident benefits or in respect of the amount of statutory accident benefits to which the insured person is entitled.

Regulations relating to disputes

   (3)  Without limiting what regulations may be made under clause (1) (a), the regulations under that clause may,

  (a)  provide that sections 279 to 282 do not apply or apply with such modifications as the regulations may specify;

  (b)  provide that sections 279 to 287 as those sections read immediately before being repealed by section 14 of the Fighting Fraud and Reducing Automobile Insurance Rates Act, 2014 apply with such modifications as the regulations may specify;

   (c)  provide for other provisions of this Act, as those provisions read immediately before being amended or repealed by a provision of the Fighting Fraud and Reducing Automobile Insurance Rates Act, 2014, to apply with such modifications as the regulations may specify;

  (d)  provide for the continuation of,

           (i)  the office of the director of arbitrations appointed under section 6 as that section read immediately before being repealed by section 2 of the Fighting Fraud and Reducing Automobile Insurance Rates Act, 2014,

          (ii)  arbitrators appointed under section 8 as that section read immediately before being repealed by section 4 of the Fighting Fraud and Reducing Automobile Insurance Rates Act, 2014, and

         (iii)  mediators appointed under section 9 as that section read immediately before being repealed by section 5 of the Fighting Fraud and Reducing Automobile Insurance Rates Act, 2014;

  (e)  provide for the continuation of the powers and duties that any of the officials referred to in clause (d) had before the transition date to be exercised by the officials continued by regulations made under clause (d) or to be exercised by other persons or bodies specified in the regulations.

Other regulations

   (4)  Without limiting what regulations may be made under clause (1) (c), the regulations under that clause may,

  (a)  if the regulations made under clause (1) (a) provide for the continuation of the office of the director of arbitrations appointed under section 6 as that section read immediately before being repealed by section 2 of the Fighting Fraud and Reducing Automobile Insurance Rates Act, 2014, provide for that official to continue to be a member of the Financial Services Commission of Ontario, despite subsection 2 (2) of the Financial Services Commission of Ontario Act, 1997;

  (b)  govern how section 25 of the Financial Services Commission of Ontario Act, 1997 applies in respect of assessments that cover expenses and expenditures relating to disputes described in subsection (2);

   (c)  modify the application of clause 6 (2) (b) of the Motor Vehicle Accident Claims Act with respect to disputes described in subsection (2).

Transition date

   (5)  In this section,

“transition date” means the date on which this section (as re-enacted by section 14 of the Fighting Fraud and Reducing Automobile Insurance Rates Act, 2014) comes into force.

   15.  Section 288.2 of the Act is amended by adding the following subsection:

Same

   (1.1)  Subject to subsection (2) and for greater certainty, the restriction imposed by subsection (1) applies with respect to payments to persons or entities regardless of whether they are owned or operated in whole or in part by, or provide the services of, a member of a profession governed by a College as defined in the Regulated Health Professions Act, 1991 or a profession governed by the Ontario College of Social Workers and Social Service Workers under the Social Work and Social Service Work Act, 1998.

   16.  Section 288.5 of the Act is amended by adding the following subsections:

Transition, deadline for application

   (9)  If a person or entity fulfils the requirements set out in subsection (1) on or before the prescribed deadline, the person or entity’s service provider’s licence as issued under subsection (3) is effective on the day subsection 288.2 (1) comes into force.

Same

   (10)  If a person or entity does not fulfil the requirements set out in subsection (1) on or before the prescribed deadline, the person or entity’s service provider’s licence as issued under subsection (3) is not effective on the day subsection 288.2 (1) comes into force.

   17.  Part XIV of the Act is amended by adding the following sections:

Interpretation

Definition

   392.1  In this Part,

“licence for life insurance” means the class of licence described in paragraph 1 of subsection 392.2 (2).

Licences of Insurance Agents

Insurance agent’s licence, scope of authority

   392.2  (1)  A person who holds a licence issued under this Part to act as an insurance agent in Ontario is authorized to act as such in accordance with the requirements of this Act and the regulations, and subject to the restrictions applicable to the class of licence issued to the person.

Classes of agent’s licence

   (2)  The following classes of licence authorizing a person to act as an insurance agent in Ontario may be issued under this Part:

    1.  Licence for life insurance and accident and sickness insurance.

    2.  Licence for accident and sickness insurance.

    3.  Licence for all classes of insurance other than life insurance.

Same

   (3)  An agent’s licence is subject to such terms and conditions as may be prescribed for the applicable class of licence, such conditions as may be imposed by the Superintendent, and such requirements, including reporting requirements, as may be prescribed for that class of licence.

Authority of agent

   (4)  A class of licence described in paragraph 2 or 3 of subsection (2) authorizes an agent to act for one insurer only, and the insurer itself must be licensed under this Act to undertake the applicable class of insurance.

Same

   (5)  The agent’s licence for a class of licence described in paragraph 2 or 3 of subsection (2) must specify the name of the insurer that has appointed the agent to act on its behalf.

Offence

   (6)  Every person who acts as an insurance agent in Ontario without the licence required by this Part, or does so while the person’s licence is suspended, is guilty of an offence.

Representation restricted

   (7)  An agent holding a class of licence described in paragraph 2 or 3 of subsection (2) shall not make any representation to the public, by advertisement or otherwise, that the agent is an agent of any insurer other than the one specified in the licence for the purposes of selling the classes of insurance specified in the licence.

Insurance groups

   (8)  Despite subsection (7), an agent may be licensed to act as an agent for an affiliated group of insurers that, in the opinion of the Superintendent, are carrying on business as a common undertaking and that affiliated group of insurers is deemed to be an insurer for the purpose of determining the agent’s authority to act as an agent under this Act.

Same

   (9)  For the purposes of subsection (8), the following corporations and insurers are deemed to be an affiliated group of insurers carrying on business as a common undertaking:

    1.  Every mutual insurance corporation that participates in the Fire Mutuals Guarantee Fund.

    2.  Every insurer that is controlled by one or more mutual insurance corporations that participate in the Fire Mutuals Guarantee Fund as a result of investments made under Part XVII.

Application for agent’s licence

   392.3  (1)  A person who wishes to apply for a licence authorizing him, her or it to act as an insurance agent in Ontario shall submit an application to the Superintendent in the manner required by the Superintendent and shall give the Superintendent such information, evidence and material as he or she may require and pay the applicable fee.

Same

   (2)  The applicant is also required to pay any outstanding administrative penalty imposed under Part XVIII.1.

Notice of appointment of applicant

   (3)  Unless the regulations specify otherwise, the application must include a notice from an insurer, on a form approved by the Superintendent, certifying that the insurer has appointed the applicant to act as the insurer’s agent in Ontario.

Declaration by applicant

   (4)  The application must include a declaration by the applicant, on a form approved by the Superintendent, respecting representations made in the application.

Withdrawal of application

   (5)  The applicant may withdraw the application at any time before the licence is issued, but if the Superintendent has taken a step under section 407.1 in connection with the application, the applicant cannot withdraw the application without the Superintendent’s permission.

Conditions

   (6)  If the Superintendent permits the applicant to withdraw the application, the Superintendent may impose conditions relating to the withdrawal.

Issuance, amendment and renewal of agent’s licence

   392.4  (1)  The Superintendent shall issue a licence to act as an insurance agent in Ontario to an applicant who applies in accordance with section 392.3 and who satisfies the prescribed requirements for the licence unless the Superintendent believes, on reasonable grounds, that the applicant is not suitable to be licensed having regard to such circumstances as may be prescribed and such other matters as the Superintendent considers appropriate.

Term of licence

   (2)  A licence authorizing a person to act as an insurance agent expires at such time as the regulations provide, unless the licence is revoked or suspended under this Part.

Proposal to refuse application

   (3)  If the Superintendent proposes to refuse to issue a licence to the applicant, the Superintendent shall take the steps required by section 407.1.

Proposal to impose conditions

   (4)  If the Superintendent proposes to issue the licence and, without the applicant’s consent, to impose conditions on the licence, the Superintendent shall take the steps required by section 407.1.

Amendment of licence

   (5)  The Superintendent may, at any time, amend an agent’s licence.

Proposal to amend

   (6)  If the Superintendent proposes to amend the licence without the agent’s consent, the Superintendent shall take the steps required by section 407.1.

Renewal of licence

   (7)  An agent who wishes to apply for renewal of his, her or its licence shall submit an application to the Superintendent in the manner required by the Superintendent and shall give the Superintendent such information, evidence and material as he or she may require and pay the applicable fee.

Same

   (8)  Subsections 392.3 (2) to (6) and subsections (1), (3) and (4) of this section apply, with necessary modifications, with respect to the application for renewal.

Revocation or suspension of agent’s licence

   392.5  (1)  The Superintendent may revoke or suspend an agent’s licence to act as an insurance agent if the agent has failed to comply with this Act, the regulations or a condition of the licence.

Same

   (2)  The Superintendent may revoke or suspend an agent’s licence if any prescribed grounds for revoking or suspending a licence, or for refusing to issue a licence, exist.

Proposal to revoke or suspend

   (3)  If the Superintendent proposes to revoke or suspend an agent’s licence under this section without the agent’s consent, the Superintendent shall take the steps required by section 407.1.

Expedited order to revoke or suspend

   (4)  The Superintendent may, by order, revoke or suspend an agent’s licence in any of the following circumstances, without taking the steps required by section 407.1:

    1.  The agent fails to pay a fee required under this Act or an administrative penalty imposed under Part XVIII.1.

    2.  Such other circumstances as may be prescribed.

Effect of suspension

   (5)  During a suspension, the agent is not authorized to act as an insurance agent in Ontario.

Interim order suspending licence

   (6)  If, in the Superintendent’s opinion, the interests of the public may be adversely affected by any delay in the revocation or suspension of an agent’s licence as a result of the steps required by section 407.1, the Superintendent may, without notice, make an interim order suspending the licence and may do so before or after giving the notice required by section 407.1 with respect to the proposal to revoke or suspend the licence.

Effect of interim order

   (7)  An interim order suspending an agent’s licence takes effect immediately and remains in effect until the expiry of the period for requesting a hearing under section 407.1 about the Superintendent’s proposal to revoke or suspend the licence.

Same

   (8)  Despite subsection (7), if the Superintendent does not give the agent the notice required by section 407.1 within 21 days after the day on which the interim order is made, the interim order expires at the end of the 21-day period.

Extension of interim order

   (9)  If the agent requests a hearing about the Superintendent’s proposal to revoke or suspend the licence, the Superintendent may extend the interim order until the proposal is finally determined.

Revocation of order re: suspension

   (10)  The Superintendent may, at any time, revoke a suspension order or an interim order suspending an agent’s licence.

Reinstatement of licence

   (11)  If a licence is revoked for non-payment of a fee or administrative penalty described in paragraph 1 of subsection (4), the Superintendent may reinstate the licence upon payment of the fee or penalty.

Automatic suspension of agent’s licence

Notice by insurer

   392.6  (1)  An insurer shall forthwith give written notice to the Superintendent if the insurer has terminated the appointment of an agent to act on the insurer’s behalf, and the notice must indicate the reason for the termination.

Suspension

   (2)  The agent’s licence is suspended upon termination of his or her appointment by the insurer.

End of suspension

   (3)  The suspension of the agent’s licence ends when an insurer notifies the Superintendent, on a form approved by the Superintendent, that the agent is appointed to act on its behalf and the applicable fee to amend the licence is paid.

Offence

   (4)  An insurer who fails to give the notice required by subsection (1) within 30 days after terminating the agent’s appointment is guilty of an offence.

Exceptions

   (5)  This section does not apply in such circumstances as may be prescribed by regulation.

Surrender of agent’s licence

   392.7  (1)  An agent may apply to the Superintendent for permission to surrender the agent’s licence.

Application

   (2)  The applicant shall submit the application to the Superintendent in the manner required by the Superintendent and shall give the Superintendent such information, evidence and material as he or she may require and pay the applicable fee.

Decision re: surrender

   (3)  The Superintendent shall allow the applicant to surrender the licence unless the Superintendent believes, on reasonable grounds, that the surrender of the licence is not in the public interest having regard to such criteria as may be prescribed and such other factors as the Superintendent considers appropriate.

Same

   (4)  If the Superintendent allows the surrender of the licence, the Superintendent may impose conditions relating to the surrender.

Proposal to refuse the application to surrender

   (5)  If the Superintendent proposes to refuse to allow the surrender of the licence, the Superintendent shall take the steps required by section 407.1.

Proposal to impose conditions

   (6)  If the Superintendent proposes to allow the surrender of the licence and, without the applicant’s consent, to impose conditions relating to the surrender, the Superintendent shall take the steps required by section 407.1.

Regulations re: agent’s licences

   392.8  (1)  The Lieutenant Governor in Council may make regulations relating to licences authorizing a person to act as an insurance agent in Ontario,

  (a)  prescribing the matters that are required or permitted under sections 392.2 to 392.7 to be prescribed or to be done by regulation;

  (b)  prescribing requirements, qualifications and terms and conditions for the issuance or renewal of licences;

   (c)  providing for the holding of examinations for applicants for licences or for renewals of licences;

  (d)  classifying applicants for licences and restricting or prohibiting the licensing of any class of applicant;

  (e)  providing that subsection 392.3 (3) and subsections 392.6 (1) to (4) do not apply in circumstances specified in the regulations in respect of a licence for life insurance;

   (f)  prescribing the grounds upon which a licence may be revoked, suspended or not renewed;

  (g)  governing reports by insurers to the Superintendent or an organization recognized under subsection 393 (14) on the suitability of an applicant or licensee to act as an agent;

  (h)  requiring insurers that appoint agents to act on their behalf to establish and maintain a system to screen each agent and supervise activities of each agent;

    (i)  prescribing, for each class of licence, standards of practice and duties of agents, including prescribing a code of ethics;

    (j)  governing the discipline of agents, including authorizing an organization recognized under subsection 393 (14) to impose fines and issue letters of reprimand to agents who hold a licence for life insurance and to suspend or revoke their licence;

   (k)  regulating the method of handling premiums collected and requiring and regulating accounts and records to be maintained by agents;

    (l)  requiring agents to supply information and make returns to the Superintendent;

(m)  requiring an agent to furnish a bond or other security and fixing the amount, form, requirements and terms thereof;

  (n)  requiring that agents who hold a licence for life insurance carry errors and omissions insurance, furnish a fidelity bond or belong to a compensation fund, and fixing the amount, form, requirements and terms thereof;

  (o)  regulating the replacement of an existing contract of life insurance by another contract of life insurance;

  (p)  prescribing the duties of insurers and agents in connection with the replacement of life insurance contracts;

  (q)  respecting any matter necessary or advisable to carry out effectively the intent and purpose of sections 392.2 to 392.7.

General or particular

   (2)  A regulation made under subsection (1) may be general or particular.

Scope of regulations

   (3)  Regulations made under subsection (1) are in addition to the provisions of sections 392.2 to 392.7, even if the regulations concern a matter provided for in any of those sections.

   18.  (1)  The heading preceding section 393 of the Act is repealed.

   (2)  Subsections 393 (1) to (13.1) of the Act are repealed.

   (3)  Clause 393 (14) (a) of the Act is amended by striking out “agents who hold licences within the class of licences referred to in clause (2) (a)” and substituting “agents who hold a licence for life insurance”.

   (4)  Clause 393 (16) (a) of the Act is amended by striking out “licences within the class of licences referred to in clause (2) (a)” at the end and substituting “licences for life insurance”.

   (5)  Clause 393 (16) (b) of the Act is amended by striking out “who hold licences within the class of licences referred to in clause (2) (a)” at the end and substituting “who hold a licence for life insurance”.

   (6)  Clause 393 (16) (c) of the Act is amended by striking out “who hold licences within the class of licences referred to in clause (2) (a)” at the end and substituting “who hold a licence for life insurance”.

   (7)  Clause 393 (16) (d) of the Act is amended by striking out “for persons wishing to be licensed within the class of licences referred to in clause (2) (a)” and substituting “for persons wishing to hold a licence for life insurance”.

   (8)  Clause 393 (16) (e) of the Act is amended by striking out “agents who hold licences within the class of licences referred to in clause (2) (a)” and substituting “agents who hold a licence for life insurance”.

   (9)  Subsection 393 (17) of the Act is repealed and the following substituted:

Application of specified provisions

   (17)  If an organization is recognized under subsection (14), subsection 392.2 (3) and sections 392.3 to 392.7 do not apply in respect of licences for life insurance.

   (10)  Subsection 393 (20.7) of the Act is amended by striking out “a licence within the class of licences referred to in clause (2) (a)” at the end and substituting “a licence for life insurance”.

   (11)  Clauses 393 (21) (a), (b), (c), (c.1), (d), (d.1) and (d.2) of the Act are repealed.

   (12)  Clause 393 (21) (d.7) of the Act is amended by striking out “licences within the class of licences referred to in clause (2) (a) be paid” and substituting “licences for life insurance be paid”.

   (13)  Clause 393 (21) (d.9) of the Act is repealed.

   (14)  Clauses 393 (21) (d.10) and (d.11) of the Act are amended by striking out “agents who hold licences within the class of licences referred to in clause (2) (a)” wherever it appears and substituting in each case “agents who hold a licence for life insurance”.

   (15)  Clauses 393 (21) (e) and (f) of the Act are repealed.

   (16)  Clause 393 (21) (f.1) of the Act is amended by striking out “agents who hold licences within the class of licences referred to in clause (2) (a)” and substituting “agents who hold a licence for life insurance”.

   (17)  Clauses 393 (21) (g), (g.1), (g.2) and (g.3) of the Act are repealed.

   (18)  Subsection 393 (23) of the Act is repealed.

   19.  (1)  Subsection 397 (2) of the Act is amended by striking out “a written application in a form provided by the Superintendent” and substituting “an application on a form approved by the Superintendent”.

   (2)  Section 397 of the Act is amended by adding the following subsections:

Withdrawal of application

   (3.1)  Subsections 392.3 (5) and (6) apply, with necessary modifications, with respect to the withdrawal of an application for a licence.

Refusal to issue licence, etc.

   (3.2)  Subsections 392.4 (3) and (4) apply, with necessary modifications, if the Superintendent proposes to refuse to issue a licence or proposes to impose conditions on the licence without the applicant’s consent.

Amendment of licence

   (3.3)  Subsections 392.4 (5) and (6) apply, with necessary modifications, with respect to the amendment of an adjuster’s licence.

   (3)  Subsections 397 (4) and (5) of the Act are repealed and the following substituted:

Renewal of licence

   (4)  An adjuster who wishes to apply for renewal of his, her or its licence shall submit an application to the Superintendent in the manner required by the Superintendent and shall give the Superintendent such information, evidence and material as he or she may require and pay the applicable fee.

Same

   (5)  Subsections 392.3 (2) and (4) to (6) and 392.4 (1), (3) and (4) apply, with necessary modifications, with respect to the application for renewal of an adjuster’s licence.

Revocation or suspension of licence

   (6)  Section 392.5 (revocation or suspension of agent’s licence) applies, with necessary modifications, with respect to the revocation or suspension of an adjuster’s licence.

Surrender of licence

   (6.1)  Section 392.7 (surrender of agent’s licence) applies, with necessary modifications, with respect to the surrender of an adjuster’s licence.

   20.  (1)  Subsection 399 (1) of the Act is repealed and the following substituted:

Licences for partnerships

   (1)  A licence to act as an agent or an adjuster may be issued under section 392.4 or 397 to a partnership, except as otherwise provided in this section or in the regulations.

   (2)  Subsection 399 (2) of the Act is amended by striking out “Each member of the partnership shall file the statement or application, including a written request” at the beginning and substituting “The application for a licence shall include the name of each member of the partnership and shall include a request”.

   (3)  Subsection 399 (2.1) of the Act is repealed.

   21.  (1)  Subsection 400 (1) of the Act is repealed and the following substituted:

Licences for corporations

   (1)  A licence to act as an agent or an adjuster may be issued under section 392.4 or 397 to a corporation, except as otherwise provided in this section or in the regulations.

   (2)  Subsections 400 (6), (7) and (8) of the Act are repealed and the following substituted:

Authority of corporation, etc.

   (6)  A corporation that holds a licence to act as an agent or adjuster, and every individual who is appointed to act as an agent or adjuster on behalf of and in the name of the corporation, is subject to the provisions of this Act that apply with respect to agents and adjusters.

Exception for certain employees

   (7)  Despite subsection (6), an employee of the corporation who does not receive commissions and who performs only office duties on behalf of the corporation in connection with the activities of an agent or adjuster may perform those duties under the authority of the corporation’s licence.

   (3)  Subsection 400 (11) of the Act is amended by striking out “An officer specified in the licence” at the beginning and substituting “An officer of the corporation”.

   22.  Section 407.1 of the Act is repealed and the following substituted:

Notice of Proposal by Superintendent

Superintendent’s proposal to refuse application, etc.

   407.1  (1)  This section applies if the Superintendent proposes to do any of the following things:

    1.  Refuse to issue a licence under this Part.

    2.  Issue a licence and, without the applicant’s consent, impose conditions.

    3.  Amend a licence without the licensee’s consent.

    4.  Refuse to renew a licence.

    5.  Renew a licence and, without the applicant’s consent, amend the conditions to which the licence is subject.

    6.  Revoke a licence without the licensee’s consent.

    7.  Suspend a licence without the licensee’s consent, except by an interim order authorized under this Part.

    8.  Refuse to allow the surrender of a licence.

    9.  Allow the surrender of a licence and, without the licensee’s consent, impose conditions relating to the surrender.

Notice of proposal

   (2)  The Superintendent shall give written notice of the proposal to the applicant or licensee, including the reasons for the proposal; the Superintendent shall also inform the applicant or licensee that he, she or it can request a hearing by the Tribunal about the proposal and shall advise the applicant or licensee about the process for requesting a hearing.

Hearing requested

   (3)  If the applicant or licensee requests a hearing in writing within 15 days after the notice under subsection (2) is given, the Tribunal shall hold a hearing.

Order

   (4)  The Tribunal may, by order, direct the Superintendent to carry out the proposal, with or without changes, or substitute its opinion for that of the Superintendent, and the Tribunal may impose such conditions as it considers appropriate in the circumstances.

Appeal

   (5)  A party to a hearing held by the Tribunal may appeal the order of the Tribunal to the Divisional Court.

Effect of appeal

   (6)  An order of the Tribunal takes effect immediately, but if the order is appealed, the Tribunal may grant a stay of the order until the appeal is finally determined.

Hearing not requested

   (7)  If the applicant or licensee does not request a hearing, or does not make the request in accordance with subsection (3), the Superintendent may carry out the proposal.

Continued jurisdiction of Superintendent, Tribunal

   (8)  If, after the Superintendent gives notice under subsection (2),

  (a)  an applicant withdraws the application to which the proposal relates; or

  (b)  the licence to which the proposal relates is suspended or expires,

the Superintendent and the Tribunal retain continuing jurisdiction with respect to the proposal and may take any step and make any order that they could have made relating to the proposal, as if the application had not been withdrawn or as if the licence had not been suspended or had not expired, and the parties may appeal any order of the Tribunal.

Same

   (9)  The continuing jurisdiction of the Superintendent and the Tribunal under subsection (8) is terminated when the rights of the parties have been exhausted or have expired and when all proceedings relating to the proposal have concluded.

Transition

   407.2  (1)  In this section,

“transition date” means the day section 407.1 (as re-enacted by section 22 of the Fighting Fraud and Reducing Automobile Insurance Rates Act, 2014) comes into force.

Same

   (2)  If, before the transition date, the Superintendent has given written notice to the applicant or licensee that he, she or it may request a hearing by an advisory board with respect to a matter, and if the matter has not been finally determined before the transition date, this Part as it reads immediately before the transition date continues to apply with respect to the matter.

Same

   (3)  If, before the transition date, the Superintendent has appointed an advisory board under subsection 393 (9) with respect to a matter and if the matter has not been finally determined before the transition date, this Part as it reads immediately before the transition date continues to apply with respect to the matter.

   23.  Subsection 448 (1.1) of the Act is amended by striking out “a person who holds a licence within the class of licences referred to in clause 393 (2) (a)” at the end and substituting “an agent who holds a licence for life insurance as defined in section 392.1”.

Financial Services Commission of Ontario Act, 1997

   24.  The definition of “Director” in section 1 of the Financial Services Commission of Ontario Act, 1997 is repealed.

   25.  Subsection 2 (2) of the Act is amended by striking out “the Superintendent and the Director” at the end and substituting “and the Superintendent”.

   26.  (1)  Subsection 10 (1) of the Act is amended by striking out “the Director”.

   (2)  Subsection 10 (2) of the Act is amended by striking out “the Director”.

   (3)  Section 10 of the Act is amended by adding the following subsection:

Transition re: director of arbitrations

   (4)  Subsections (1), (1.1) and (2) apply, with necessary modifications, with respect to every person who held office as the director of arbitrations as that office existed immediately before the repeal of section 6 of the Insurance Act by section 2 of the Fighting Fraud and Reducing Automobile Insurance Rates Act, 2014 or as that office may be continued after that repeal by regulations under section 283 of the Insurance Act.

   27.  (1)  Subsection 25 (1) of the Act is amended by striking out “the Tribunal or the Director” at the end and substituting “or the Tribunal”.

   (2)  Subsection 25 (5) of the Act is repealed.

Licence Appeal Tribunal Act, 1999

   28.  (1)  Subsection 11 (1) of the Licence Appeal Tribunal Act, 1999 is amended by striking out “Subject to subsections (2) to (5)” and substituting “Subject to subsections (2) to (6)”.

   (2)  Subsection 11 (1) of the Act is amended by adding the following:

Insurance Act

   (3)  Section 11 of the Act is amended by adding the following subsection:

Insurance Act appeals — question of law only

   (6)  An appeal from a decision of the Tribunal relating to a matter under the Insurance Actmay be made on a question of law only.

   29.  Subsection 12 (1) of the Act is amended by adding the following clause:

  (e)  governingtransitional matters relating to disputes in respect of statutory accident benefits as defined in subsection 224 (1) of the Insurance Act as a result of the coming into force of section 14 of the Fighting Fraud and Reducing Automobile Insurance Rates Act, 2014;

Motor Vehicle Accident Claims Act

   30.  Clause 6 (2) (b) of the Motor Vehicle Accident Claims Act is repealed and the following substituted:

  (b)  sections 274 and 279 to 282 of the Insurance Act apply with necessary modifications.

Repair and Storage Liens Act

   31.  Subsection 1 (1) of the Repair and Storage Liens Act is amended by adding the following definition:

“regulations” means the regulations made under this Act; (“règlements”)

   32.  Subsection 3 (1) of the Act is repealed and the following substituted:

Repairer’s lien

   (1)  In the absence of a written agreement to the contrary, a repairer has a lien against an article that the repairer has repaired for an amount equal to one of the following, and the repairer may retain possession of the article until the amount is paid:

    1.  The amount that the person who requested the repair agreed to pay.

    2.  Where no such amount has been agreed upon, the fair value of the repair, determined in accordance with any applicable regulations.

    3.  Where only part of a repair is completed, the fair value of the part completed, determined in accordance with any applicable regulations.

   33.  (1)  Subsection 4 (1) of the Act is repealed and the following substituted:

Storer’s lien

   (1)  Subject to subsection (2), a storer has a lien against an article that the storer has stored or stored and repaired for an amount equal to one of the following, and the storer may retain possession of the article until the amount is paid:

    1.  The amount agreed upon for the storage or storage and repair of the article.

    2.  Where no such amount has been agreed upon, the fair value of the storage or storage and repair, determined in accordance with any applicable regulations.

    3.  Where only part of a repair is completed, the fair value of the storage and the part of the repair completed, determined in accordance with any applicable regulations.

   (2)  Subsections 4 (4), (5) and (6) of the Act are repealed and the following substituted:

Notice to owner, etc., articles

   (4)  Where the storer knows or has reason to believe that possession of an article that is subject to a lien was received from a person other than its owner or a person having its owner’s authority, the storer, within 60 days after the day of receiving the article, shall give written notice of the lien to every person whom the storer knows or has reason to believe is the owner or has an interest in the article, including every person who has a security interest in the article that is perfected by registration under the Personal Property Security Act against the name of the person whom the storer knows or has reason to believe is the owner.

Notice to owner, etc., articles of prescribed class

   (4.1)  Despite subsection (4), where the storer knows or has reason to believe that possession of an article of a prescribed class that is subject to a lien was received from a person other than its owner or a person having its owner’s authority, the storer, within a prescribed period after the day of receiving the article of the prescribed class, shall give written notice of the lien,

  (a)  to the persons mentioned in subsection (4); and

  (b)  to such other classes of persons and entities as may be prescribed.

Contents of notice

   (5)  A notice under subsection (4) or (4.1) shall contain,

  (a)  a description of the article sufficient to enable it to be identified;

  (b)  the address of the place of storage, the date that it was received and the name of the person from whom it was received;

   (c)  a statement that a lien is claimed under this Act by the storer in respect of the article;

  (d)  a statement advising how the article may be redeemed; and

  (e)  any other prescribed information.

Effect of failure to give notice, articles

   (6)  Where a storer fails to give the notice required by subsection (4),

  (a)  the storer’s lien as against the person who should have been given the notice is limited to the unpaid amount owing in respect of the period of 60 days from the day that the article was received; and

  (b)  the storer shall surrender possession of the article to that person where the person proves a right to possession and pays that unpaid amount.

Effect of failure to give notice, articles of prescribed class

   (6.1)  Where a storer fails to give the notice required by subsection (4.1),

  (a)  the storer’s lien as against the person who should have been given the notice is limited to the unpaid amount owing in respect of the period prescribed for the purposes of subsection (4.1) from the day that the article of the prescribed class was received; and

  (b)  the storer shall surrender possession of the article to that person where the person proves a right to possession and pays that unpaid amount.

   34.  Section 27 of the Act is repealed and the following substituted:

Service of documents

   27.  (1)  A document required or permitted to be given under this Act may be,

  (a)  given personally;

  (b)  sent by certified or registered mail or prepaid courier to,

           (i)  the intended recipient’s address for service if there is one,

          (ii)  the last known mailing address of the intended recipient according to the records of the person sending the document, where there is no address for service, or

         (iii)  the most recent address of the intended recipient as shown on a claim for lien or change statement registered under this Act or as shown on a financing statement or financing change statement registered under the Personal Property Security Act; or

   (c)  given by any other prescribed method of delivery.

Prescribed person or entity

   (2)  Despite subclauses (1) (b) (i) to (iii), a document referred to in subsection (1) that is sent by certified or registered mail or prepaid courier to a person or entity of a prescribed class shall be sent to a prescribed place.

Deemed receipt

   (3)  A document referred to in subsection (1) is deemed to have been given,

  (a)  if sent by certified or registered mail, on the earlier of,

           (i) the day the intended recipient actually receives it, or

          (ii)  the tenth day after the day it is sent; or

  (b)  if given by a prescribed method of delivery, on a prescribed day.

   35.  Subsection 28 (3) of the Act is amended by striking out “Except as provided in clause 4 (1) (b)” at the beginning and substituting “Except as provided in any applicable regulations made under clause 32 (1) (a)”.

   36.  Section 32 of the Act is repealed and the following substituted:

Regulations

   32.  (1)  The Lieutenant Governor in Council may make regulations,

  (a)  governing the determination of “fair value” for the purposes of,

           (i)  fair value of the repair or part of the repair under paragraphs 2 and 3 of subsection 3 (1),

          (ii)  fair value of the storage or storage and repair or part of the repair under paragraphs 2 and 3 of subsection 4 (1);

  (b)  specifying the types of security that may be deposited with a court under section 24;

   (c)  prescribing anything referred to in this Act as prescribed.

Same

   (2)  A regulation made under clause (1) (a) may provide that the determination of “fair value” shall be made in accordance with any applicable municipal by-law.

Commencement and Short Title

Commencement

   37.  This Act comes into force on a day to be named by proclamation of the Lieutenant Governor.

Short title

   38.  The short title of this Act is the Fighting Fraud and Reducing Automobile Insurance Rates Act, 2014.

 

EXPLANATORY NOTE

The Bill amends the Insurance Act, the Financial Services Commission of Ontario Act, 1997, the Licence Appeal Tribunal Act, 1999, the Motor Vehicle Accident Claims Act and the Repair and Storage Liens Act.  Here are some highlights of the amendments.

Dispute resolution (statutory accident benefits):

The Insurance Act is amended to change how disputes relating to statutory accident benefits will be resolved.

Currently these disputes are dealt with by the director of arbitrations appointed under section 6 and arbitrators and mediators provided for under sections 8 and 9.  The process for the resolution of these disputes is currently dealt with under sections 279 to 288.

The new sections 279 to 283 will replace sections 279 to 288.  Section 280 provides that disputes will be dealt with by the Licence Appeal Tribunal under the Licence Appeal Tribunal Act, 1999.  The protection of benefits after a dispute is resolved, currently in section 287, is continued under the new section 281.  Under the new section 282, the Lieutenant Governor in Council will be able to assess insurers for the costs of the Licence Appeal Tribunal relating to these disputes.  That power is similar to the assessment power under section 25 of the Financial Services Commission of Ontario Act, 1997.  The new section 283 authorizes regulations for various transitional matters.

Consequential and other amendments relating to these changes are made to other provisions of the Insurance Act and to the Financial Services Commission of Ontario Act, 1997, the Motor Vehicle Accident Claims Act and the Licence Appeal Tribunal Act, 1999.  The amendments to the Licence Appeal Tribunal Act, 1999 provide for a right of appeal from the Tribunal to the Divisional Court.

Prejudgment interest (motor vehicle liability policies):

Currently, subsection 258.3 (1) of the Insurance Act requires specified steps to be taken in connection with proceedings arising from the use or operation of an automobile. They include a requirement that the plaintiff give notice to the defendant within a specified period after an incident.  Subsection 258.3 (8) currently states that prejudgment interest cannot be awarded under the Courts of Justice Act for any period before the notice is given.  A new subsection 258.3 (8.1) provides that subsection 128 (2) of the Courts of Justice Act — governing the interest rate to be used — does not apply with respect to the prejudgment interest.

Licenses for service providers (statutory accident benefits):

Currently, section 288.2 of the Insurance Act provides that an insurer is not permitted to make payments for listed expenses directly to a person or entity who does not hold a service provider’s licence.  A new subsection 288.2 (1.1) clarifies that the restriction applies with respect to payments to persons or entities regardless of whether they are owned or operated in whole or in part by, or provide the services of, a regulated health professional, a social worker or a social service worker.

Currently, section 288.5 of the Act governs the issuance of service provider’s licenses.  A new subsection 288.5 (9) provides that a licence is effective on the day subsection 288.2 (1) (restrictions re payments for listed expenses) comes into force if the applicant fulfils the application requirements under subsection 288.5 (1) on or before the prescribed deadline.  A new subsection 288.5 (10) provides that the licence is not effective on the day subsection 288.2 (1) comes into force if those requirements are not fulfilled on or before the deadline.

Licensing of insurance agents and adjusters:

Part XIV of the Insurance Act (Agents, Brokers and Adjusters) is amended in connection with the licensing of agents and adjusters.

New sections 392.1 to 392.8 govern agent’s licences.  Section 392.2 sets out the classes of licences available to insurance agents, and governs the scope of each class of licence.  Sections 392.3 to 392.7 govern applications for an agent’s licence, authorizing the Superintendent to issue or refuse to issue a licence. Those sections also provide for the renewal, revocation or suspension of an agent’s licence by the Superintendent, and for the surrender of a licence.  Section 392.8 sets out related regulation-making authority.

Current subsections 393 (1) to (13.1) of the Act, which govern licences for agents, and provide for the issuance, renewal, revocation and suspension of licences, are repealed.  The current provisions authorize the Superintendent to appoint an advisory board to hold a hearing and make recommendations to the Superintendent with respect to an application for a licence.  That process is replaced.

Amendments are also made to section 397 of the Act, which governs the issuance of licences for adjusters.  The amendments provide that portions of sections 392.2 to 392.7 apply, with necessary modifications, with respect to the issuance, renewal, revocation, suspension and surrender of the licences.

Section 407.1 of the Act, as re-enacted, requires the Superintendent to notify an applicant or licensee if the Superintendent proposes to refuse an application for a licence, to refuse to renew a licence, to revoke or suspend a licence without the licensee’s consent and in other specified circumstances.  Under section 407.1, the applicant or licensee is given an opportunity to request a hearing of the matter by the Financial Services Tribunal.  Provision is made for an appeal to Divisional Court.

Consequential amendments are made to Part XIV and to subsections 121 (1) and 448 (1.1) of the Act.

Repair and storage liens:

Amendments to subsections 3 (1) and 4 (1) of the Repair and Storage Liens Act provide that the fair value of repair and storage is determined in accordance with any applicable regulations made under the Act.

Other amendments to the Act relate to the requirement that a storer in possession of an article subject to a lien give notice to the owner and others, where the storer knows or has reason to believe that the article was received from a person other than its owner or a person having its owner’s authority.

Related to these amendments, the requirement in subsection 4 (4) of the Act to provide the notice to additional persons where the article is a vehicle is repealed.

A new subsection 4 (4.1) of the Act provides that where the article is of a class prescribed by the regulations, in addition to the owner and others, the notice must be given to any other classes of persons and entities that may be prescribed.  The storer must give the notice within a prescribed period after receiving the article.  A new subsection 4 (6.1) of the Act provides that if the storer fails to give the required notice, the storer’s lien is limited to the unpaid amount in respect of the prescribed period, beginning on the day the article was received.

Additional amendments to section 27 of the Act allow documents under the Act to be served by any prescribed method.

Currently, subsection 28 (3) of the Act provides that a lien claimant is not entitled to a lien for interest on the amount owing with respect to an article, except as provided in the Act.  That provision is amended so that a lien claimant is not entitled to a lien for interest on the amount owing with respect to an article, except as provided in any applicable regulations.

Corresponding regulation-making provisions relating to these amendments are added to section 32 of the Act.

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