Canada
Answer ... Federally regulated insurance companies require an authorisation from the minister of finance and the superintendent of financial institutions to conduct business in Canada. A federal insurer is authorised to insure (or reinsure), in Canada, risks that fall within a class of insurance that is specified in its authorisation order. The Office of the Superintendent of Financial Institutions (OSFI) is responsible for regulating and administering the application process, which is extensive and time consuming.
The process to establish a foreign branch is also extensive and time consuming, although somewhat less so. A branch is authorised to insure (or reinsure), in Canada, risks that fall within a class of insurance that is specified in its authorisation order. Like federal insurers, approvals are required from the superintendent and the minister to establish a branch and the application is made through OSFI.
Provincially organised insurance companies must obtain authorisation to carry on business from the provincial regulator in the province in which they have organised, and are generally subject to similar requirements to those set out by OSFI.
All insurers (federal, provincial and branches), must obtain authorisation from the insurance regulator in each province in which they intend to conduct business in the form of a provincial insurance licence, which authorises the insurer to conclude contracts of insurance in the jurisdiction in respect of one or more particular classes of insurance.
Insurance intermediaries fall under provincial jurisdiction. Provincial insurance regulators supervise insurance service providers, including insurance agents, brokers and adjusters. This is accomplished through provincial insurance legislation and regulations and insurance regulators that are organised as either government agencies or self-regulating bodies.
Canada
Answer ... In order to obtain authorisation, federal insurers and foreign branches are required to submit to OSFI their governing documents, proof of required capitalisation and proof of compliance with the applicable requirements of the Insurance Companies Act and of OSFI. In particular, applicants are required to submit:
- information on their ownership and financial strength;
- a detailed three-year business plan;
- management information;
- risk management analyses;
- information on the board of directors;
- internal audit methodologies;
- compliance management information; and
- descriptions of IT systems and structure.
For the incorporation of a provincial insurer, provincial regulators have requirements similar to OSFI’s, although the level of sophistication and available resources of the provincial regulators vary significantly. Some may direct applicants to apply at the federal level.
Provincial insurance regulators require insurance intermediaries to:
- obtain certain qualification requirements;
- meet licensing requirements that depend on the type of insurance services provided;
- maintain operating requirements in the conduct of their business;
- maintain licences in good standing; and
- renew licences upon expiry.
Canada
Answer ... The procedures for incorporating a new federal insurer or foreign branch are governed by the Insurance Companies Act and OSFI, and are set out in detail respectively in OSFI’s Guide for Incorporating Federally Regulated Insurance Companies and its Transaction Instructions on Establishment of a Branch by a Foreign Insurer.
Typically, establishing a federal insurer will take at least 12 to 18 months from the initial application to completion, and establishing a foreign branch will generally take nine to 15 months from the initial application to completion. The length of the process is heavily dependent on the quality of the initial application and the ability of the applicant to respond to OSFI information requests in a timely manner.
The process for incorporating a new provincial insurer will vary significantly by province, with the procedure and timing in the larger more sophisticated jurisdictions (eg, Ontario, Quebec, British Columbia) likely to be very similar to the federal OSFI process.
Obtaining a provincial licence to carry on business – for both insurers and intermediaries – typically takes one to three months, depending on the type of licence and the jurisdiction.