Federal can't regulate an insurer operating in a single province
Hi Graham,
I see in battle card 8: Federal can't regulate an insurer operating in a single province, does it mean that even if an insurer is federal incorporated but operating solely in one province, federal government can't regulate this insurer? is the insurer required to operate in multiple provinces for the federal government to regulate? In this case, can each province also regulate this insurer? If the insurer has a federal license, does it imply that it can operate in all provinces without the authorization of each individual province since it has the right and capacity to operate in another province? Can you please provide more clarifications on differences between federal vs province incorporated/licensed insurers, is licensing and incorporating the same thing?
Thank you
Comments
These legal cases are always a bit tricky because there are likely hundreds of pages of documents containing the details. The key fact here however is that insurance, by it's nature, always operates within a single province. It doesn't matter if the insurer is provincially or federally incorporated or operates in multiple provinces. The contract is written in the province by an insured living in the province and fulfillment of the contract happens entirely within the province. The short way of stating this is that the business of insurance is considered intra-provincial.
By contrast, manufacturing a car in Ontario and transporting it to Quebece for sale would be inter-provincial trade/commerce and would then fall under the federal government's power to regulate.
The benefit of being federally incorporated versus provincially incorporated is that a federally incorporated insurer has both the right and capacity to operate in another province. A provincially incorporated insurer however would need permission of another province to operate in that province which is an extra hurdle that could be avoided by becoming federally incorporated instead.
if federal government can't regulate an insurer operating in a single province, would ON Fire Act be beyond the powers of federal government (ultra-vires) instead?
It is Intra-vires for Ontario, ultra-vires for the federal government