Alberta, Canada (CU)_ The Alberta government of Canada has proposed insurance laws in order to boost the province’s capacity. Finance Minister Travis Toews introduced the Insurance Amendment Act in the legislature recently. The Act is an extension to last December’s Captive Insurance Companies Act and is scheduled to take effect this summer.
According to the provincial government, if the Act is approved, Alberta would become the first Canadian jurisdiction to enable authorized provincial insurance firms to focus only on reinsurance business and improve their capital requirements through limited partnerships. The Alberta government estimates that nearly 175 Canadian-owned captives might reopen for operation.
According to the government statement, “If passed, amendments to the Insurance Act will help facilitate easier access to reinsurance within Alberta. Reinsurance is insurance for insurance companies. Increasing its availability in Alberta should have a positive impact on the overall insurance supply in the provincial market. This will help ease shortage and high prices, and better position traditional insurers in serving Albertans and Alberta businesses.”
The statement added, “The proposed legislation also puts finishing touches on insurance rules before Alberta welcomes captive insurers. If passed, the amendment to the recently introduced Captive Insurance Companies Act will facilitate smooth relocation of foreign captives into the province. This means Alberta businesses looking to bring their foreign captives home would be able to do so without interruption to captive insurance operations.”
The new Act includes instructions on redomestication under the Captive Insurance Companies Act. The provincial government explained the redomestication process. It said, “The new section on ‘redomestication’ proposed for the Captive Insurance Companies Act provides instruction for the relocation process, outlines responsibilities for owners, specifies required documents that need to be filed with the superintendent of insurance and other similar procedural requirements relevant to the business operations and structure of a captive. The section will give legislative certainty for any business thinking about relocating an existing captive back to Alberta.”
