CANADA TRANSPORTATION ACT

Railway Third Party Liability Insurance Coverage Regulations

SOR/96-337

• APPLICATION
• DETERMINATION OF ADEQUATE THIRD PARTY LIABILITY INSURANCE COVERAGE

• ESTABLISHED BY:

INTERPRETATION

1. The definitions in this section apply in these Regulations.

"Act"

« Loi »

"Act" means the Canada Transportation Act. 

"applicant"

« demandeur »

"applicant" means a person who makes an application to the Agency for a certificate of fitness or for the variation of a certificate. 

"deductible"

« franchise »

"deductible" means the amount of risk for which an applicant retains financial responsibility under an insurance contract. 

"insurer"

« assureur »

"insurer" means an insurance company that provides third party liability insurance coverage to an applicant and includes an insurance company that is wholly owned by the parties it insures. 

"named perils pollution"

« risques de pollution désignés »

"named perils pollution" means risks that are set out in an insurance contract that are associated with seepage or pollution or contamination resulting from but not limited to collision, overturning, derailment, upset, hostile fire, lightning or explosion or other railway related accidents. 

"self-insurance"

« autoassurance »

"self-insurance" means self-insured retention and deductible. 

"self-insured retention"

« affectation pour autoassurance »

"self-insured retention" means the amount of risk for which an applicant takes financial responsibility, outside of an insurance contract. 

"third party liability insurance coverage"

« assurance responsabilité civile »

"third party liability insurance coverage" means financial compensation provided for in a contract entered into between an applicant and an insurer, or in the case of self-insurance, financial compensation provided by the applicant, in respect of the following matters arising out of an applicant's proposed construction or operation of a railway, including a proposed temporary construction or operation of a railway resulting from unforeseen or exceptional circumstances:

(a) third party bodily injury or death, including injury or death to passengers,

(b) third party property damage, excluding damage to cargo, and

(c) named perils pollution. 

APPLICATION

2. These Regulations apply to any person proposing to

(a) construct a railway; or

(b) operate a railway either over and on their own railway or over and on the railway of another railway company, including operating over and on a portion of the railway of another railway company.

DETERMINATION OF ADEQUATE THIRD PARTY LIABILITY INSURANCE COVERAGE

3. Third party liability insurance coverage is adequate if there is

(a) sufficient insurance, including self-insurance, to compensate for the following matters that may arise out of an applicant's proposed construction or operation of a railway, including a proposed temporary construction or operation of a railway resulting from unforeseen or exceptional circumstances:

(i) third party bodily injury or death, including injury or death to passengers,

(ii) third party property damage, excluding damage to cargo, and

(iii) named perils pollution;

(b) a written confirmation provided to the Agency by the applicant that the applicant has fully disclosed to the insurer the nature and extent of the proposed construction or operation of the railway and any associated third party liability risks; and

(c) full disclosure to the Agency by the applicant of the amount of self-insured retention and of the third party liability risks that may arise from the proposed construction or operation of the railway.

4. In determining whether third party liability insurance coverage is adequate, the Agency shall

(a) examine the risks associated with the proposed construction or operation of the railway by considering information that is provided by the applicant, including

(i) passenger ridership,

(ii) passenger and freight train miles,

(iii) volume of railway traffic,

(iv) class and volume of dangerous goods transported by rail,

(v) types of population areas served,

(vi) number of level crossings,

(vii) speed of trains,

(viii) train crew training,

(ix) method of train control, and

(x) overall safety record of the applicant; and

(b) in the case of self-insurance, assess the financial capability of the applicant to sustain the level of self-insurance, on the basis of the following information provided by the applicant:

(i) the three most recent annual financial reports that have been filed with the Agency pursuant to section 344 of the Railway Act, as that section read immediately before the coming into force of the Act, or with the Minister of Transport in accordance with any applicable regulations made pursuant to section 50 of the Act,

(ii) where the applicant does not file the reports referred to in subparagraph (i), audited financial statements for the three most recent complete fiscal years, or

(iii) where the applicant does not have the information referred to in subparagraph (i) or (ii), other financial information that establishes the applicant's financial capability to sustain the self-insurance.

ESTABLISHED BY: