Released on November 24, 2021
Today, the province introduced The Insurance Amendment Act, 2021 to enhance protections for life insurance contracts.
The Insurance Act regulations place a limit on amounts that can be held within side accounts associated with life insurance contracts. As stated in a Saskatchewan Court of Appeal decision in March 2021, this limit must apply to all existing life insurance contracts on a retrospective basis. The Insurance Amendment Act, 2021 confirms and codifies that Court of Appeal decision.
"Life insurance providers are not banks and should not have to provide services like a bank," Justice Minister and Attorney General Gordon Wyant said. "This legislation protects both customers and life insurance providers by preventing people from taking advantage of the side accounts provided with life insurance contracts."
Limiting deposits made into side accounts provides protection to both insurers and consumers. Insurance companies are not regulated for deposit-taking and being forced to accept unlimited deposits could threaten their financial stability. If an insurer fails, consumers with policies issued by that insurer may not receive the coverage they have paid for and on which they are relying.
Saskatchewan is following several other provinces, including Alberta, New Brunswick and Nova Scotia, in including retrospective limits on side accounts in insurance legislation.
The Insurance Act is comprehensive legislation that came into force in 2020. The Act governs the general form and content of insurance contracts and regulates the activities of insurers, insurance agents, insurer's representatives, managing general agents, third party administrators and adjusters. The Act also sets out enforcement provisions and provides the Superintendent of Insurance with a full suite of governance powers to ensure compliance.
For more information, contact:Margherita Vittorelli
Justice and Attorney General