New regulations to update and improve consumer protection and reduce red tape in the insurance industry will come into effect on July 1, 2012, implementing improvements set out in the Insurance Amendment Act, 2009.
Under the new rules, insurance companies will be required to put in place internal complaint resolution procedures and offer consumers access to ombudsperson-type services if disputes cannot be resolved internally.
Other consumer protection measures include:
* A 30-day grace period for consumers to pay overdue life and health insurance premiums.
* A 10-day cooling-off period for consumers to rescind a life or health insurance contract.
* Extending the limitation period in which consumers can make legal claims against insurance companies to two years from one.
* Strengthening language to clarify that fire coverage includes fires resulting from any cause, including earthquake, unless expressly set out in the regulations.
* Providing consumers of group insurance products a right to obtain a copy of the key parts of those insurance policies.
* Requiring insurers to notify claimants of limitation periods and dispute resolution processes.
Some of the amendments and regulations benefit the insurance industry by increasing efficiency and removing red tape, including streamlining and clarifying insurance contract rules, reducing the number of insurance classes to 19 from 40, and aligning with Alberta’s insurance amendments and regulations.
Although the regulations are approved, the effective date is deferred to July 1, 2012, to allow time for orderly implementation of the changes and for insurers and insurance agents to adjust insurance contracts and processes to meet the new statutory and regulatory requirements.
The Insurance Act revisions were developed jointly with Alberta, and included lengthy, in-depth consultations with insurance stakeholders.
Public discussion papers in March 2007, and February 2010, sought feedback on amendments to the act, and the content of the regulations respectively.
The British Columbia Insurance Act sets out the requirements for insurance contracts, including life, health and property insurance, but does not regulate automobile insurance, which is covered by a separate statute.
More information on the new statutory and regulatory changes can be found at: www.fin.gov.bc.ca/cep/fcsp/consultIAR.htm