O. Reg. 104/22: SALE OF INSURANCE

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ontario regulation 104/22

made under the

Credit Unions and Caisses Populaires Act, 2020

Made: February 24, 2022
Filed: February 28, 2022
Published on e-Laws: February 28, 2022
Printed in The Ontario Gazette: March 19, 2022

SALE OF INSURANCE

CONTENTS

 

Interpretation and application

1. (1) In this Regulation,

“authorized types of insurance” means the types of insurance listed in subsection 2 (1); (“types d’assurance autorisés”)

“credit union website” means a website that a credit union uses in relation to its business, including any information provided by the credit union that is accessible on a telecommunications device, but does not include a website that is accessible only by employees or agents of the credit union; (“site Web de caisse”)

“insurer” means an insurer licensed under the Insurance Act; (“assureur”)

“licensed agent” means an insurance agent licensed under the Insurance Act; (“agent titulaire d’un permis”)

“registered insurance broker” has the same meaning as in the Registered Insurance Brokers Act; (“courtier d’assurances inscrit”)

“third party provider type of insurance” means a type of insurance that is not an authorized type of insurance, life insurance or accident and sickness insurance, except for accident and sickness insurance that is incidental to the third party provider type of insurance, and that is sold by an insurer, licensed agent or registered insurance broker at a branch of the credit union or through a credit union website in accordance with section 3. (“type d’assurance offert par un fournisseur tiers”)

(2) For the purposes of this Regulation, a website is not a credit union website by reason only that the website provides access to a credit union website or promotes the business of a credit union.

(3) This Regulation, except section 4, applies with respect to a central as if it were a credit union.

Authorized types of insurance

2. (1) For the purpose of subsection 141 (1) of the Act, a credit union may administer any of the following types of insurance policies offered by insurers that are licensed to carry on business offering that type of insurance policy:

1.  Insurance related to a credit card or charge card issued by the credit union.

2.  Creditors’ disability insurance.

3.  Creditors’ life insurance.

4.  Creditors’ insurance for loss of employment.

5.  Creditors’ vehicle inventory insurance.

6.  Export credit insurance.

7.  Group accident and sickness insurance.

8.  Group life insurance.

9.  Mortgage insurance.

10.  Travel insurance.

(2) A credit union that, on March 1, 1995, administered an insurance policy other than one authorized under subsection (1) may continue to administer the policy with respect to a person to whom coverage was provided on that date.

(3) For the purposes of subsection (1), “insurance related to a credit card or charge card” refers to a policy of an insurer that provides the types of insurance described in this subsection to the holder of a credit card or charge card as a feature of the card without request and without an individual assessment of risk. The policy may provide insurance against the loss of, or damage to, goods purchased with the card. The policy may also provide insurance against any loss arising from a contractual liability assumed by the holder when renting a vehicle, if the rental is paid for with the card. The policy may also provide for the extension of a warranty provided by the manufacturer of the goods purchased with the card.

(4) For the purposes of subsection (1), “creditors’ disability insurance” refers to a group insurance policy that will pay to the credit union all or part of the amount of a debt owed to the credit union by a debtor. Payment will be made only in the event of bodily injury to or the illness or disability of,

(a)  the debtor or the debtor’s spouse, if the debtor is an individual;

(b)  an individual who is a guarantor of all or part of the debt;

(c)  a director or officer of a debtor that is a body corporate; or

(d)  an individual who is essential to the ability of a debtor that is an entity to meet the debtor’s financial obligations to the credit union.

(5) For the purposes of subsection (1), “creditors’ life insurance” refers to a group insurance policy that will pay to the credit union all or part of the amount of a debt owed to the credit union by a debtor or all or part of the amount of the credit limit under a line of credit for a debt relating to a small business, a farm, a fishery or a ranch. Payment will be made only in the event of the death of,

(a)  the debtor or the debtor’s spouse, if the debtor is an individual;

(b)  an individual who is a guarantor of all or part of the debt;

(c)  a director or officer of a debtor that is a body corporate; or

(d)  an individual who is essential to the ability of a debtor that is an entity to meet the debtor’s financial obligations to the credit union.

The small business must be a business that is or, if it were incorporated, would be a small business corporation within the meaning of subsection 248 (1) of the Income Tax Act (Canada).  The line of credit must be a commitment to lend amounts up to a predetermined limit that does not involve a predetermined repayment schedule. The credit limit must not exceed the reasonable credit needs of the debtor or the lending limits of the credit union.

(6) For the purposes of subsection (1), “creditors’ insurance for loss of employment” refers to a policy of an insurer that will pay to the credit union all or part of the amount of a debt owed to the credit union. The insurance policy will be made without an individual assessment of risk. Payment will be made only in the event that,

(a)  the debtor becomes involuntarily unemployed, if the debtor is an individual; or

(b)  an individual who is a guarantor of any portion of the debt becomes involuntarily unemployed.

(7) For the purposes of subsection (1), “creditors’ vehicle inventory insurance” refers to a policy of an insurer that provides insurance against direct and accidental loss or damage to vehicles held in stock for display and sale purposes by a debtor of the credit union. Some or all of the vehicles must have been financed by the credit union.

(8) For the purposes of subsection (1), “export credit insurance” refers to a policy of an insurer that provides insurance to an exporter of goods or services against a loss incurred by the exporter because goods or services are not paid for.

(9) For the purposes of subsection (1), “group accident and sickness insurance” refers to a group insurance policy between an insurer and the credit union. The policy provides accident and sickness insurance severally for persons who individually hold certificates of insurance. The insurance must be restricted to the credit union’s employees, its members and the employees of its subsidiaries.

(10) For the purposes of subsection (1), “group life insurance” refers to a group insurance policy between an insurer and the credit union. The policy provides life insurance severally for persons who individually hold certificates of insurance. The insurance must be restricted to the credit union’s employees, its members and the employees of its subsidiaries.

(11) For the purposes of subsection (1), “mortgage insurance” refers to a policy of an insurer that provides insurance to the credit union against a loss caused by a default under a loan by the credit union secured by a mortgage on real estate or an interest in real estate. The debtor must be an individual.

(12) For the purposes of subsection (1), “travel insurance” refers to either of the following:

1.  A policy of an insurer that provides the types of insurance described in this paragraph to an individual in respect of a trip by the individual away from the place where the individual ordinarily resides. The insurance is provided without an individual assessment of risk. The policy may provide insurance against a loss that results from the cancellation or interruption of the trip. It may provide insurance against the loss of or damage to personal property that occurs while the individual is on the trip. It may provide insurance against a loss caused by the delayed arrival of personal baggage while the individual is on the trip.

2.  A group insurance policy that provides the types of insurance described in this paragraph to an individual in respect of a trip by the individual away from the province in which the individual ordinarily resides. The policy may provide insurance against expenses incurred during the trip that result from the individual’s illness or disability that occurs during the trip. It may provide insurance against expenses incurred during the trip that result from bodily injury to or the death of the individual caused by an accident during the trip. It may provide insurance against expenses incurred by the individual for dental care required as a result of an accident during the trip. It may provide insurance in the event that the individual dies during the trip, against expenses incurred for the return of the individual’s remains to the place where the individual ordinarily resided before death, or for travel expenses incurred by a relative who must travel to identify the remains. The policy may provide that the insurer undertakes to pay money in the event of the individual’s illness or disability that occurs during the trip or bodily injury to or the death of the individual caused by an accident during the trip.

Third party provider types of insurance

3. A credit union may permit the sale of authorized types of insurance policies and third party provider types of insurance policies by an insurer, licensed agent or registered insurance broker at a branch of the credit union or through a credit union website if the insurer, licensed agent or registered insurance broker is licensed or registered to carry on business offering that type of insurance policy.

Group insurance policy

4. (1) A credit union may administer a group insurance policy described in section 2 only for the credit union’s employees, its members or the employees of its subsidiaries.

(2) A group insurance policy is a contract of insurance between an insurer and the credit union that provides insurance severally for a group of identifiable persons who individually hold certificates of insurance.

Advice and services

5. (1) A credit union may provide advice about an authorized type of insurance.

(2) A credit union may provide advice in respect of a third party provider type of insurance only to the extent that the advice facilitates a referral to an insurer, licensed agent or registered insurance broker.

(3) A credit union may provide advice in respect of a type of insurance that is not an authorized type of insurance or third party provider type of insurance only if,

(a)  the advice is general in nature; and

(b)  the advice is not about a specific risk, a particular proposal respecting life insurance or a particular insurance policy, insurer, licensed agent, registered insurance broker or service.

(4) A credit union may provide services in respect of an authorized type of insurance or a third party provider type of insurance.

(5) A credit union may provide services in respect of a type of insurance that is not an authorized type of insurance or third party provider type of insurance only if the credit union does not refer a person to a particular insurer, licensed agent or registered insurance broker for a type of insurance that is not an authorized type of insurance or third party provider type of insurance.

(6) For greater certainty, a credit union may refer its members to an insurer, licensed agent or registered insurance broker for the provision of an authorized type of insurance or a third party provider type of insurance but shall not refer its members to an insurer, licensed agent or registered insurance broker for the provision of a type of insurance that is not an authorized type of insurance or a third party provider type of insurance.

Restriction on insurance

6. A credit union shall not underwrite insurance.

Restriction on agency

7. (1) No credit union or credit union employee shall act as a licensed agent or a registered insurance broker for any person in the placing of insurance.

(2) Despite subsection (1), a person who is a credit union employee may act as a licensed agent or a registered insurance broker, subject to the following restrictions:

1.  The person shall not act in the person’s capacity as a credit union employee at the same time.

2.  The person shall not act as a licensed agent or a registered insurance broker in any branch of the credit union that employs the person as a credit union employee.

3.  The person shall not act as a licensed agent or a registered insurance broker for a customer if the person has previously dealt with the customer as a credit union employee.

Separate and distinct operations

8. A credit union that carries on business in the same premises or premises adjacent to an office of an insurer, licensed agent or registered insurance broker shall clearly indicate to its customers that the credit union’s operations are separate and distinct from the operations of the insurer, licensed agent or registered insurance broker.

Promotion of insurer

9. (1) A credit union shall not promote an insurer, licensed agent or registered insurance broker unless,

(a)  the insurer, licensed agent or registered insurance broker deals in authorized types of insurance or third party provider types of insurance; or

(b)  the promotion takes place outside the head office of the credit union and any other office of the credit union, and is directed to,

(i)  all of the holders of credit cards or charge cards issued by the credit union to whom statements of account are sent regularly,

(ii)  all of the credit union members who are individuals and to whom statements of account are sent regularly, or

(iii)  the general public.

(2) A credit union shall not promote an insurance policy of an insurer, licensed agent or registered insurance broker, or a service provided in respect of such a policy, unless,

(a)  the policy is of an authorized type of insurance or the service is in respect of such a policy;

(b)  the policy is of a third party provider type of insurance or the service is in respect of such a policy, and the promotion is only to help facilitate a referral to an insurer, licensed agent or registered insurance broker;

(c)  the policy is to be provided by a corporation without share capital (other than a mutual insurer or a fraternal benefit society) that carries on business without pecuniary gain to its members and the policy provides insurance to an individual in respect of the risks covered by travel insurance;

(d)  the service is in respect of a policy described in clause (c); or

(e)  the promotion takes place outside the head office of the credit union and any other office of the credit union, and is directed to,

(i)  all of the holders of credit cards or charge cards issued by the credit union to whom statements of account are sent regularly,

(ii)  all of the credit union members who are individuals and to whom statements of account are sent regularly, or

(iii)  the general public.

(3) A credit union may exclude the following persons from a promotion described in clause (1) (b) or (2) (e):

1.  Persons in respect of whom the promotion would contravene an Act of Parliament or of the legislature of a province.

2.  Persons who have notified the credit union in writing that they do not wish to receive promotional material from the credit union.

3.  Persons who hold a credit card or charge card issued by the credit union in respect of which the account is not in good standing.

(4) Paragraph 3 of subsection (3) does not apply in respect of a promotion for automobile insurance or any other types of insurance for which an insurer is prohibited from considering credit history or rating, or whether a person has a credit card in determining whether to issue, renew or terminate insurance or to continue any insurance coverage or endorsements.

Web promotion

10. (1) A credit union shall not, on a credit union website, directly or indirectly promote, or provide access to, another website that promotes,

(a)  an insurer, licensed agent or registered insurance broker that deals only in a type of insurance that is not an authorized type of insurance or a third party provider type of insurance; or

(b)  an insurance policy of an insurer, licensed agent or registered insurance broker, or a service in respect of such a policy, that provides a type of insurance that is not an authorized type of insurance or a third party provider type of insurance.

(2) If the sale of a third party provider type of insurance is accessed through a credit union website, only the following information may be provided on the credit union website:

1.  The name of, and contact information for, the insurer, licensed agent or registered insurance broker.

2.  The authorized or third party provider types of insurance offered by the insurer, licensed agent or registered insurance broker.

3.  A link to the website of the insurer, licensed agent or registered insurance broker.

(3) A credit union shall not engage in a promotion described in clause 9 (1) (b) on a credit union website unless the promotion relates to an insurer, licensed agent or registered insurance broker that deals in authorized types of insurance or third party provider types of insurance.

(4) A credit union shall not engage in a promotion described in clause 9 (2) (e) on a credit union website unless the promotion relates to a policy of an authorized type of insurance or a third party provider type of insurance.

Sharing of information with insurer

11. (1) Except as permitted by this section, a credit union shall not directly or indirectly give an insurer, licensed agent or registered insurance broker information about,

(a)  a member of the credit union;

(b)  an employee of the member;

(c)  if the member is an entity with its own members, a member of the entity; or

(d)  if the member has partners, a partner of the member.

(2) A credit union shall not permit its subsidiary to give directly or indirectly to an insurer, licensed agent or registered insurance broker information that the subsidiary receives from the credit union.

(3) A credit union shall not permit a subsidiary that is a loan or trust corporation to give directly or indirectly to an insurer, licensed agent or registered insurance broker information about,

(a)  a customer of the subsidiary;

(b)  an employee of the customer;

(c)  if the customer is an entity with its own members, a member of the customer; or

(d)  if the customer has partners, a partner of the customer.

(4) A credit union or a subsidiary that is a loan or trust corporation may give information to an insurer, licensed agent or registered insurance broker in either of the following circumstances:

1.  The credit union or subsidiary has established procedures to ensure that the insurer, licensed agent or registered insurance broker does not use the information to promote the insurer, licensed agent or registered insurance broker or an insurance policy or services respecting an insurance policy and the insurer, licensed agent or registered insurance broker has given an undertaking to the credit union or subsidiary, in a form acceptable to the Chief Executive Officer, that the insurer, licensed agent or registered insurance broker will not use the information for such a purpose.

2.  The information is required to facilitate a referral by the credit union or subsidiary to the insurer, licensed agent or registered insurance broker for the provision of a third party provider type of insurance.

(5) In this section,

“loan or trust corporation” means a loan or trust corporation incorporated under an Act of the legislature of a province.

No undue pressure or coercion

12. No employee of a credit union shall coerce any person or subject any person to undue pressure to obtain an insurance product or service from the credit union, its subsidiaries, affiliates or agents, or an insurer, licensed agent or registered insurance broker carrying on insurance business in a credit union’s premises or through a credit union website as a condition of obtaining another product or service from the credit union.

Commencement

13. This Regulation comes into force on the later of the day section 1 of Schedule 7 (Credit Unions and Caisses Populaires Act, 2020) to the Protect, Support and Recover from COVID-19 Act (Budget Measures), 2020 comes into force and the day this Regulation is filed.

 

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