Insurance & Reinsurance 2015
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ICLG The International Comparative Legal Guide to: Insurance & Reinsurance 2015 4th Edition A practical cross-border insight into insurance and reinsurance law Published by Global Legal Group, with contributions from: Acuña, Sahurie, Hoetz & Cifuentes CMS Advokatfirmaet Steenstrup Stordrange DA Creel, García-Cuéllar, Aiza y Enríquez, S.C. Advokatfirman Vinge KB DAC Beachcroft Colombia Abogados SAS AlixPartners DAC Beachcroft SLPU ALTENBURGER LTD legal + tax Gün + Partners Anderson Mōri & Tomotsune Kyriakides Georgopoulos Law Firm Arthur Cox McMillan LLP Attorneys at Law Borenius Ltd MJM Limited Bedell Cristin Guernsey Partnership Morton Fraser LLP Blaney McMurtry LLP Oppenhoff & Partner Rechtsanwälte Cabinet BOPS Steuerberater mbB Camilleri Preziosi Osterling Abogados Chalfin, Goldberg, Vainboim & Fichtner Studio Legale Giorgetti Advogados Associados Tuli & Co Clyde & Co LLP Willkie Farr & Gallagher LLP The International Comparative Legal Guide to: Insurance & Reinsurance 2015 General Chapters: 1 Proposed Changes to Insurance Contract Law in the UK – Jon Turnbull & Michelle Radom, Clyde & Co LLP 1 2 The Economics of Insurance Markets – Challenges and Change – Mat Hughes & Pablo Florian, Contributing Editors AlixPartners 7 Jon Turnbull & Geraldine 3 Recent Developments in Canadian Privacy Law and CGL Coverage – Lori D. Mountford & Quirk, Clyde & Co LLP David R. Mackenzie, Blaney McMurtry LLP 15 Head of Business Development 4 The New Corporate Governance Framework for Mexican Insurers – Leonel Pereznieto del Prado & Dror Levy Allan Galileo Olmedo Villegas, Creel, García-Cuéllar, Aiza y Enríquez, S.C. 21 Sales Director Florjan Osmani Commercial Director Country Question and Answer Chapters: Antony Dine 5 Bermuda MJM Limited: Jean-Paul (JP) Dyer & Timothy Frith 25 Account Directors Oliver Smith, Rory Smith 6 Brazil Chalfin, Goldberg, Vainboim & Fichtner Advogados Associados: Senior Account Manager Ilan Goldberg & Pedro Bacellar 31 Maria Lopez 7 Canada McMillan LLP: Carol Lyons & Lindsay Lorimer 38 Sales Support Manager 8 Chile Acuña, Sahurie, Hoetz & Cifuentes: Alejandro Acuña & Emilio Sahurie 47 Toni Hayward Senior Editor 9 Colombia DAC Beachcroft Colombia Abogados SAS: Gabriela Monroy Torres & Suzie Levy Camila de la Torre Blanche 52 Editor 10 England & Wales Clyde & Co LLP: Jon Turnbull & Geraldine Quirk 58 Rachel Williams 11 Finland Attorneys at Law Borenius Ltd: Ulla von Weissenberg 67 Group Consulting Editor Alan Falach 12 France Cabinet BOPS: Pascal Ormen & Alexis Valençon 72 Group Publisher 13 Germany Oppenhoff & Partner Rechtsanwälte Steuerberater mbB: Richard Firth Dr. Peter Etzbach, LL.M. 78 Published by 14 Greece Kyriakides Georgopoulos Law Firm: Konstantinos S. Issaias 84 Global Legal Group Ltd. 59 Tanner Street 15 Guernsey Bedell Cristin Guernsey Partnership: Mark Helyar 91 London SE1 3PL, UK Tel: +44 20 7367 0720 16 India Tuli & Co: Neeraj Tuli & Celia Jenkins 96 Fax: +44 20 7407 5255 Email: [email protected] 17 Ireland Arthur Cox: Elizabeth Bothwell & David O’Donohoe 102 URL: www.glgroup.co.uk 18 Italy Studio Legale Giorgetti: Avv. Alessandro P. Giorgetti 109 GLG Cover Design F&F Studio Design 19 Japan Anderson Mōri & Tomotsune: Tomoki Debari & Tomoyuki Tanaka 115 GLG Cover Image Source 20 Malta Camilleri Preziosi: Malcolm Falzon & Tara Cann Navarro 120 Colin/Wikimedia Commons 21 Mexico Creel, García-Cuéllar, Aiza y Enríquez, S.C.: Leonel Pereznieto del Prado 127 Printed by Ashford Colour Press Ltd 22 Norway Advokatfirmaet Steenstrup Stordrange DA: Klaus Henrik Wiese-Hansen & February 2015 Audun Kleppestø 132 Copyright © 2015 23 Peru Osterling Abogados: Enrique Ferrando Gamarra & Marco Rivera Noya 137 Global Legal Group Ltd. All rights reserved 24 Romania CMS Romania: Florentin Giurgea & Horia Draghici 142 No photocopying 25 Russia CMS Russia: Leonid Zubarev & Sergey Yuryev 148 ISBN 978-1-910083-33-8 26 Scotland Morton Fraser LLP: Jenny Dickson 154 ISSN 2048-6871 27 Spain DAC Beachcroft SLPU: José María Álvarez-Cienfuegos & Strategic Partners José María Pimentel 160 28 Sweden Advokatfirman Vinge KB: Fabian Ekeblad & Malin Van den Tempel 166 29 Switzerland ALTENBURGER LTD legal + tax: Melissa Gautschi & Julia Jung-Utzinger 173 30 Turkey Gün + Partners: Pelin Baysal & Bensu Aydin 179 31 Ukraine CMS Ukraine: Olexander Martinenko & Sergiy Gryshko 184 32 USA Willkie Farr & Gallagher LLP: Christopher J. St. Jeanos 189 Further copies of this book and others in the series can be ordered from the publisher. Please call +44 20 7367 0720 Disclaimer This publication is for general information purposes only. It does not purport to provide comprehensive full legal or other advice. Global Legal Group Ltd. and the contributors accept no responsibility for losses that may arise from reliance upon information contained in this publication. This publication is intended to give an indication of legal issues upon which you may need advice. Full legal advice should be taken from a qualified professional when dealing with specific situations. WWW.ICLG.CO.UK Chapter 7 Canada Carol Lyons McMillan LLP Lindsay Lorimer forms, such as a fraternal benefit society or a reciprocal exchange, 1 Regulatory and may be incorporated under the laws of a province. For simplicity, this discussion is restricted to insurers carrying on business in 1.1 Which government bodies/agencies regulate Canada as a company or a branch and whose primary regulator is insurance (and reinsurance) companies? OSFI. The information requirements and timing for incorporation of a Canadian company and establishment of a Canadian branch In Canada, responsibility for lawmaking is shared among the federal are very similar. Both involve an extensive approval application to government and the governments of ten provinces and three territories OSFI. Since a branch is not a separate legal entity from the foreign (“provinces”). Under Canada’s constitution there is a division of insurer, one of the main differences between the two vehicles is that powers between the federal and provincial governments. The federal a Canadian insurance company requires a board of directors and government makes laws for the whole of Canada in respect of matters mandatory board committees and is subject to the OSFI Corporate assigned to it by the constitution. Likewise, a provincial legislature Governance guideline which contains comprehensive requirements has legislative jurisdiction relative to the subject matters over which for board and committee oversight. Although a branch operation it has been assigned. In the context of insurance, this jurisdiction is does not have a board, OSFI requires the Chief Agent of a branch shared but somewhat compartmentalised. The federal government to fulfil many of the corporate governance functions required has jurisdiction over the prudential regulation (e.g. solvency) of of a board of a Canadian company. Despite the legal distinction insurance companies and other entities that are authorised to provide between a company and a branch, from an accounting perspective insurance products (“insurers”), while the provinces have authority (e.g. financial and regulatory reporting), the branch is treated as a over the market conduct of insures carrying on business in their separate entity. The requirements for incorporation or qualification jurisdictions. (Although, to be complete, insurers can be provincially of a reinsurer are no different than those applicable to a primary incorporated, in which case the province in question regulates insurer, although the business plan, for example (discussed below), solvency as well.) Unlike the rest of the Canadian provinces which would be tailored appropriately if the insurer proposes to limit its are common law jurisdictions, Québec is a civil law jurisdiction. The activities to the business of reinsurance. general principles of Québec insurance law are contained in the Civil Although there are a number of insurers that are incorporated under Code of Québec. the laws of a Canadian province, most of the largest insurance As a result of the shared constitutional jurisdiction, in Canada, there companies in Canada are federally incorporated and many companies is a federal insurance regulator, the Office of the Superintendent that were originally incorporated provincially have migrated into of Financial Institutions (“OSFI”), and each province has its federal jurisdiction where the legislation is comparatively modern own insurance regulatory authority, for example, the Financial and solvency regulation is more robust. One provincial insurance Institutions Commission in British Columbia, Alberta Treasury regulatory authority recently considered putting a moratorium on Board and Finance, the Financial Services Commission of Ontario the incorporation of insurance companies under its provincial laws, and l’autorité des marchés financiers (“AMF”) in Québec. The and requiring existing insurers incorporated in that province (other provincial insurance regulators are typically government agencies than reciprocal exchanges and farm mutuals) to transfer to federal that report to the Minister of Finance of the provincial government. jurisdiction or another jurisdiction where the insurer is subject to supervision that meets the new solvency standards set by the In Canada, reinsurance is regulated in the same manner as insurance. International Association of Insurance Supervisors (“IAIS”). There are no separate regulators, although different rules will apply given the nature of reinsurance, some of which are discussed below. Focus of OSFI Review