Canada’s Alberta government has proposed legislation that will aims to increase the province’s capacity.
Finance Minister Travis Toews tabled the Insurance Amendment Act in the legislature earlier this week. The Act is intended as a follow-up to last December’s Captive Insurance Companies Act and will go into force by the summer of this year. According to the provincial government, if passed, the Act will make Alberta the first Canadian jurisdiction to allow licensed provincial insurance companies to focus solely on reinsurance business and use limited partnerships for boosting their capital needs.
A statement from the government said: “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.”
It 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 contains guidance on ‘redomestication’ relating to the Captive Insurance Companies Act.
Said the provincial government: “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.”
It has been estimated by the Albertan government that up to 175 Canadian-owned captives could return for business.
