Alberta insurance bill takes latest step towards approval
Alberta’s pending Bill 16 to modify its Insurance Act and Captive Insurance Companies Act has passed its second reading and committee stage and is heading for approval.
Among other things, Bill 16 would address high regulatory charges tied to the purchase of unlicensed insurance in Alberta. Currently those charges stand at 50% but would drop to 10% if the bill becomes law. Likewise, a 50% financial penalty for late payment of charges and taxes on unlicensed insurance would drop from 50% to 10%.
Dealing with high charges was seen as a motivator for the tabling the Captive Insurance Companies Act during Alberta’s 2021 legislative session. Currently awaiting proclamation, the bill will allow captive insurance companies to set up and domicile in Alberta to create options beyond unlicensed insurance for companies that have difficulty finding coverage.
Bill 16 now addresses those unlicensed insurance charges directly and also has a ‘redomestication’ provision that would let foreign captives relocate to Alberta.
Bill 16 would also add new reinsurance provisions to let provincially licensed insurance companies focus solely on reinsurance and to enter into limited partnerships to raise capital.