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RSNL1990 CHAPTER I-12
INSURANCE CONTRACTS ACT
1999 c22 s13; 2009 c30 s7; 2010 c15 ss13-15; 2013 c16 s25
AN ACT RESPECTING INSURANCE CONTRACTS
1. This Act may be cited as the Insurance Contracts Act .
2. In this Act,
(a) "accident and sickness insurance" means accident and sickness insurance as defined in the Insurance Companies Act ;
(b) "agent" means agent as defined in the Life and Accident Insurance Agents Licensing Act;
(c) "automobile" includes a trolley bus and a self-propelled vehicle, and the trailers, accessories and equipment of automobiles, but does not include railway rolling stock that runs on rails, or watercraft, or aircraft;
(d) "automobile insurance" means automobile insurance as defined in the Insurance Companies Act ;
(e) "beneficiary" means a person designated or appointed as one to whom or for whose benefit insurance money is to be payable;
(f) "contract" means a contract of insurance and includes a policy, certificate, interim receipt, renewal receipt or writing evidencing the contract, whether sealed or not, and a binding oral agreement;
(g) "court" means the Trial Division or a judge of the Trial Division;
(h) [Rep. by 2010 c15 s13]
(i) [Rep. by 2010 c15 s13]
(i.1) "fire insurance" means fire insurance as defined in the Insurance Companies Act ;
(j) "foreign jurisdiction" means a jurisdiction other than the province;
(k) [Rep. by 2010 c15 s13]
(l) "insurance" means the undertaking by 1 person to indemnify another person against loss or liability for loss in respect of a certain risk or peril to which the object of the insurance may be exposed, or to pay a sum of money or other thing of value upon the happening of a certain event;
(m) "insurance money" means the amount payable by an insurer under a contract and includes all benefits, surplus, profits, dividends, bonuses, and annuities payable under the contract;
(n) "insured" means a person who enters into a contract with an insurer;
(o) "insurer" means the person who undertakes or agrees or offers to undertake a contract;
(p) "life insurance" means life insurance as defined in the Insurance Companies Act ;
(q) "marine insurance" means insurance against marine losses, that is to say, the losses incident to marine adventure, and may by the express terms of a contract or by usage of trade extend so as to protect the insured against losses on inland waters or by land or air which are incidental to a sea voyage;
(r) "officer" includes a trustee, director, manager, treasurer, secretary or member of the board or committee of management of an insurer or a person appointed by the insurer to sue and be sued in its behalf;
(s) "policy" means the instrument evidencing a contract;
(t) "premium" means the single or periodical payment under a contract for the insurance and includes dues, assessments and other considerations;
(u) "property" includes profits, earnings and other monetary interests and expenditure for rents, interest, taxes and other outgoings and charges and in respect of inability to occupy the insured premises, but only to the extent of express provision in the contract;
(v) "reciprocal or inter-insurance exchange" means a group of subscribers exchanging reciprocal contracts of indemnity of inter-insurance with each other through the same attorney;
(w) [Rep. by 2010 c15 s13]
(x) "statutory condition" means a condition required by a law of the province relating to insurance to be included in a contract; and
(y) "surety insurance" means surety insurance as defined in the Insurance Companies Act .
RSN1970 c178 s2; 1986 c42 Sch A; 2010 c15 s13
Application of Act
3. Except where otherwise provided and where consistent with another Act or law of the province relating to insurance, this Act applies to every contract made in the province other than contracts of
(a) accidents and sickness insurance;
(b) life insurance; and
(c) marine insurance.
Contracts considered made in the province
4. Where the subject-matter of a contract is property in the province or an insurable interest of a person resident in the province, the contract, where signed, countersigned, issued or delivered in the province or committed to the post office or to a carrier, messenger or agent to be delivered or handed over to the insured, his or her assign or agent in the province, shall be considered to evidence a contract made in the province and shall be construed according to the laws of the province and all money payable under the contract shall be paid in lawful money of Canada and, where the person entitled to the money so requires, in the province.
Policy to contain contract
5. (1) All the terms and conditions of a contract shall be set out in full in the policy or by writing securely attached to it when it is issued and unless so set out no term of the contract or condition, stipulation, warranty or proviso modifying or impairing its effect is valid or admissible in evidence to the prejudice of the insured or a beneficiary.
(2) Subsection (1) does not apply to an alteration or modification of a contract agreed upon in writing by the insurer and the insured after the issue of the policy.
(3) Where a contract, whether or not it provides for its renewal, is renewed by a renewal receipt, it is a sufficient compliance with subsection (1) where the terms and conditions of the contract were set out in accordance with that subsection and the renewal receipt refers to the contract by its number or date.
(4) The proposal or application of an insured shall not, as against the insured, be considered to be a part of or be considered with the contract except in so far as the court determines that it contains a material misrepresentation by which the insurer was induced to enter into the contract.
(5) A contract shall not contain or have endorsed upon it or be made subject to a term, condition, stipulation, warranty or proviso providing that the contract shall be avoided because of a statement in the application of the contract or inducing the entering into of the contract by the insurer, unless the term, condition, stipulation, warranty or proviso is limited to cases in which the statement is material to the contract, and a contract shall not be avoided because of the inaccuracy of that statement unless it is material to the contract.
(6) The question of materiality in a contract is one of fact for a jury or for the court where there is no jury and an admission, term, condition, stipulation, warranty or proviso to the contrary contained in a proposal or application for insurance or in an instrument of contract or in an agreement or document relating to it has no force or validity.
(7) This section does not apply to contracts of fire or automobile insurance.
(8) Nothing in this section impairs the effect of a statutory condition or of an express provision of a statute or law of the province relating to insurance.
RSN1970 c178 s5; 2009 c30 s7
Insured to receive copy of application
6. An insurer shall upon request provide to an insured a true copy of his or her application or proposal for insurance.
Illegal contracts prohibited
7. (1) An insurer shall not make a contract inconsistent with this Act or with another Act or law of the province relating to insurance.
(2) An act or omission of the insurer resulting in imperfect compliance with this Act or of another Act or law shall not render a contract invalid as against the insured.
Information to be contained in policy
8. (1) A policy shall contain the name of the insurer, the name of the insured, the name of the person to whom the insurance money is payable, the amount, or the method of determining the amount, of the premium for the insurance, the subject matter of the insurance, the indemnity for which the insurer may become liable, the event on the happening of which the liability is to accrue, the date upon which the insurance takes effect and the date it terminates or the method by which the latter is fixed or to be fixed.
(2) This section does not apply to a contract of surety insurance.
RSN1970 c178 s8; 2010 c15 s14
9. (1) This section applies to a contract containing a condition, statutory or otherwise, providing, in the event of difference or disagreement between the insured and insurer, for appraisal to determine the matters specified in the condition.
(2) The appraisal shall be made by 2 disinterested appraisers, the insured and the insurer each selecting an appraiser and the 2 so chosen then selecting a competent and disinterested umpire.
(3) The appraisers shall determine the matters specified in the condition, and if they fail to agree, they shall submit their differences to the umpire, and the finding in writing of any 2 appraisers shall determine the matters.
(4) Each party to the appraisal shall pay the appraiser selected by him or her and shall bear equally the expense of the appraisal and umpire.
(a) a party fails to name an appraiser within 7 clear days after being served with written notice to do so;
(b) the appraisers fail to agree upon an umpire within 15 days after their appointment; or
(c) an appraiser or umpire refuses to act or is incapable of acting or dies,
a judge of the Trial Division may appoint an appraiser or umpire upon the application of the insured or of the insurer.
RSN1970 c178 s9; 1986 c42 Sch B; 1999 c22 s13
Relief from forfeiture
10. Where there has been imperfect compliance with a statutory condition as to the proof of loss to be given by the insured or other matter or thing required to be done or omitted by the insured with respect to the loss and a consequent forfeiture or avoidance of the insurance in whole or in part, and the court considers it inequitable that the insurance should be forfeited or avoided on that ground, the court may relieve against the forfeiture or avoidance on those terms that it considers just.
How policy payable
Insurance money is payable in the province in lawful money of
Waiver of term or condition
12. (1) A term or condition of a contract shall not be considered to be waived by the insurer in whole or in part, unless the waiver is stated in writing and signed by a person authorized for that purpose by the insurer.
(2) Neither the insurer nor the insured shall be considered to have waived a term or condition of a contract by an act relating to the appraisal of the amount of loss or to the delivery and completion of proofs, or to the investigation or adjustment of a claim under the contract.
Plaintiff of insured may recover damages
13. (1) Where a person incurs liability for injury or damage to the person or property of another and is insured against that liability and fails to satisfy a judgment awarding damages against him or her in respect of his or her liability and an execution against him or her is returned unsatisfied, the person entitled to the damages may recover by action against the insurer the amount of the judgment up to the face value of the policy but subject to the same equities that the insurer would have if the judgment had been satisfied.
(2) This section does not apply to motor vehicle liability policies.
Joinder of certain actions under contracts
14. (1) Where several actions are brought for the recovery of money payable under a contract the court may consolidate or otherwise deal with the actions so that there shall be but 1 action for and in respect of all the claims made in those actions.
(2) Where an action is brought to recover the share of 1 or more infants, all the other infants entitled or the trustees, executors or guardians entitled to receive payment of the shares of those other infants shall be made parties to the action and the rights of all the infants shall be determined in 1 action.
(3) In all actions where several persons are interested in the insurance money, the court or judge may apportion among the persons entitled a sum directed to be paid and may give all necessary directions and relief.
(4) Where the person entitled to receive money due under a contract of insurance, other than insurance of the person, is domiciled or resides in a foreign jurisdiction and payment, valid according to the law of that jurisdiction, is made to that person, the payment is valid and effectual for all purposes.
Delivery of policy binds insurer
15. (1) Where a policy has been delivered, the contract is as binding on the insurer as if the premium had been paid although it has not in fact been paid and although delivered by an officer or agent of the insurer who had no authority to deliver it.
(2) An insurer may sue for an unpaid premium and may deduct the amount of the unpaid premium from the amount for which the insurer is liable under the contract.
(3) Where a cheque, bill of exchange or promissory note is given, whether originally or by way of renewal, for the whole or part of a premium and the cheque, bill of exchange or promissory note is not honoured according to its tenor, the insurer may terminate the contract immediately by giving written notice by registered mail.
Insurer to provide proof of loss forms
16. (1) An insurer, immediately upon receipt of a request, and in any event not later than 60 days after receipt of notice of loss, shall provide to the insured or person to whom the insurance money is payable forms upon which to make the proof of loss required under the contract.
(2) An insurer who neglects or refuses to comply with subsection (1) is guilty of an offence and, in addition, section 13 shall not be available to the insurer as a defence to an action brought, after that neglect or refusal, for the recovery of money payable under the contract of insurance.
(3) The insurer by providing forms to make proof of loss shall not be taken to have admitted that a valid contract is in force or that the loss in question falls within the insurance provided by the contract.
Restriction on actions to recover money
17. An action shall not be brought for the recovery of money payable under a contract until the expiration of 60 days after proof, in accordance with the provisions of the contract,
(a) of the loss; or
(b) of the happening of the event upon which the insurance money is to become payable,
or of a shorter period that may be fixed by the contract.
Violations of criminal and other law
18. Unless the contract otherwise provides, a violation of a criminal or other law in force in the province or elsewhere shall not automatically render unenforceable a claim for indemnity under a contract except where the violation is committed by the insured or by another person with the consent of the insured with intent to bring about loss or damage but, in the case of a contract of life insurance, this section applies only where the insurer undertakes to pay insurance money or to provide other benefits in the event that the person whose life is insured becomes disabled as a result of bodily injury or disease.
Assignment of right to refund
19. Where an insured assigns the right to refund of premium that may accrue because of the cancellation or termination of a contract under the terms of the contract and notice of the assignment is given by the assignee to the insurer, the insurer shall pay the refund to the assignee notwithstanding a condition in the contract, whether prescribed under this Act or not, requiring the refund to be paid to the insured or to accompany a notice of cancellation or termination to the insured.
20. Where the condition in a contract dealing with cancellation or termination by the insurer provides that a refund shall accompany a notice of cancellation or termination, the insurer shall include in the notice a statement that instead of payment of the refund in accordance with the condition the refund is being paid to the assignee under section 19.
21. (1) An insurer which cannot obtain sufficient discharge for insurance money for which it admits liability may apply to the court without giving notice to other interested parties for an order for the payment of the money into court, and the court may order the payment into court to be made upon those terms as to costs and otherwise as the court directs, and may provide to what fund or name the amount shall be credited.
(2) The receipt provided by the court is sufficient discharge to the insurer for the insurance money paid into court, and the insurance money shall be dealt with according to the orders of the court.
RSN1970 c178 s21; 2013 c16 s25
Imperfect compliance with statutory condition
22. Where, in the case of a contract of fire insurance, there has been imperfect compliance with a statutory condition as to proof of loss to be given by the insured or other matter or thing required to be done or omitted by the insured with respect to a loss insured against and a consequent forfeiture or avoidance of the insurance in whole or in part, and the court considers it inequitable that the insurance be forfeited or avoided on that ground, the court may relieve against the forfeiture or avoidance on those terms that it considers just.
23. (1) Subject to a statutory condition, a notice given by an insurer, where the method of service is not otherwise provided, may be given in the case of a member or person insured by mailing it to his or her post office address given in the original application for insurance unless a new address has been notified in writing to the insurer.
(2) Subject to a statutory condition, delivery of a written notice to an insurer, where the method of delivery is not otherwise expressly provided, shall be by letter
(a) delivered at or sent by registered mail to its head or chief office in the province or to the person empowered in accordance with section 440 of the Corporations Act to act as its attorney;
(b) sent by registered mail addressed to the insurer, its manager or agent at the head or chief office of the insurer in Canada where that head or chief office is situated outside the province; or
(c) delivered or sent by registered mail to an agent of the insurer in the province.
24. (1) An insurer which is licensed under theInsurance Companies Act to transact fire insurance and which has an agent who is a resident of the province shall not make, write or place a policy, duplicate policy or contract of fire insurance upon real or personal property located in the province or described in a policy, duplicate policy or contract as located in the province except after the policy, duplicate policy or contract of fire insurance has been signed or countersigned by that agent and the insurer shall pay to the agent the commission or some of the commission when the premium stipulated in the policy, duplicate policy or contract of fire insurance is paid.
(2) An agent shall not sign a policy, duplicate policy or contract of fire insurance referred to in subsection (1) in blank or in an otherwise incomplete condition.
(3) This section does not apply to
(a) a policy, duplicate policy or contract of fire insurance covering rolling stock of a railroad corporation or property in transit which is in the possession or custody of a railroad corporation or other common carrier or to movable property of a common carrier used or employed in the business of a common carrier; or
(b) a contract of reinsurance, a mutual company, underwriters or syndicates of underwriters operating on the plan known as Lloyd's or reciprocal or inter-insurance exchanges.
(4) An insurer to which this section applies which makes, writes or places a policy, duplicate policy or contract of fire insurance referred to in subsection (1) contrary to that subsection is guilty of an offence and liable on summary conviction to a fine of not less than $100 and not more than $300 for each policy, duplicate policy or contract of fire insurance made, written or placed contrary to that subsection.
(5) In this section "agent" means the chief agent or resident manager of the insurer in the province.
Transfer of contracts
25. Where under an agreement between an insurer, in this section called the "continuing insurer", and another insurer, in this section called the "retiring insurer", in anticipation of the retiring insurer ceasing to do business in the province, the continuing insurer assumes liability under contracts of insurance specified in the agreement issued by the retiring insurer and the retiring insurer ceases to carry on business in the province, an insured or other person entitled to rights under those contracts may enforce the rights as though those contracts had been issued by the continuing insurer.
26. A person guilty of an offence under this Act is, except where otherwise provided, liable on summary conviction to a fine of not more than $250 or to imprisonment for a term of not more than 2 months or to both a fine and imprisonment.
Acts to prevail
27. Where there is a conflict between this Act and theAccident and Sickness Insurance Act , theAutomobile Insurance Act , the Fire Insurance Act and the Life Insurance Act , those Acts shall prevail.
RSN1970 c178 s26; 1971 No14 s2