Newsrelease

June 21, 1999
Edmonton, Alberta

"New market conduct rules which protect Alberta consumers and enhance the industry itself are the focus of this new legislation. Fines for breaking the rules have been increased dramatically along with other steps that will allow more effective enforcement."

Modernized Insurance Act puts Alberta at the head of the pack

Consumer protection was improved in the new Insurance Act passed during the spring legislature session, and now the province is finalizing the regulations before the Act is proclaimed into law next year.

"Phase one is done, we've modernized the Act and improved the rules to ensure Alberta consumers are well protected," said Calgary-Lougheed MLA Marlene Graham, sponsor of the Act. "Now we're developing the regulations that are required to be made under the Act. Through this process stakeholders will have an opportunity to comment on the regulations."

The regulations include:

• errors and omissions insurance for agents and adjusters
• continuing education for insurance agents and adjusters
• disclosure by insurers, agents, and adjusters
• claims settlement practices
• privacy of personal client information.

A key part of the new Act will see heavy fines for companies that break the rules. The top fine will be $200,000, up from $200 in the old legislation. The Act also allows for intermediate enforcement measures to be taken to force compliance before an insurers' license is revoked. Both moves will provide more effective enforcement powers.

Graham expects to wrap up the drafting of the regulations in time to have the Insurance Act proclaimed in the first quarter of 2000.

The original Insurance Act was first passed in 1915 and had remained fundamentally unchanged since then. But with rapid change in the marketplace through the 1990s – such as the sale of insurance products by non-traditional methods, including telemarketing and direct marketing -- the laws needed an overhaul. After five years of consultations with industry groups, the new Act was tabled and passed during the spring legislature session.

For further information, please contact:

Shannon Taylor
Director of Communications
Alberta Treasury
(780) 427-5364

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