Finance Minister Travis Toews
Alberta looks set to become the second Canadian province to permit captive insurance, with its government tabling legislation to facilitate them. Currently, only British Columbia allows captive insurance in Canada.
Finance Minister Travis Toews tabled the legislation, Bill 76, the Captive Insurance Companies Act, on Wednesday.
“With limited availability in the insurance market, it’s very difficult for some companies to find adequate insurance at reasonable prices,” he said.
“This is especially true for many of Alberta’s energy companies, as global insurance capacity is on the decline. By allowing and enabling captives, we believe that it will help attract investment and growth in the financial services sector in the province and assist in diversifying our economy.”
He continued: “Our legislation will allow any business entities seeking alternative insurance coverage to set up a captive right here in Alberta. This means that Alberta companies or any Canadian company that can benefit from alternative insurance options will no longer have to look abroad.”
Other sectors including agriculture, forestry and manufacturing could also benefit, he said, and captives could have a role in addressing rising insurance rates for insuring school buses.
“School boards are struggling with the high cost of premiums for facility insurance, and I expect that it would be useful for this Albert School Boards Association to perhaps consider the merits of setting up a captive where that captive can then, in fact, offer insurance back to individuals, school boards and divisions,” he said.
Under the proposed legislation, captive insurance companies would have to be licensed and regulated by Alberta’s superintendent of insurance. If the bill is passed, detailed regulations will be available by the spring of 2022.
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