Dear Editor,
I NOTE with great interest and alacrity the Attorney General’s intention to table new legislation to repeal and replace the current Insurance Act of 1998. This is a welcome piece of legislation for which initial consultations commenced during the last administration and is now being introduced by the current Attorney General. This Bill had the benefit of widespread consultations within the insurance industry. This Bill is intended to strengthen some deficiencies in the current Act and require some more rigorous compliance requirements from the industry in keeping with international standards. It is also intended to enhance significant aspects of consumer protection. A Canadian consultant guided the industry during the consultative process. Even though we welcome the Bill, we wish to implore our legislators to ensure that there are no loopholes within this important piece of legislation and to ensure that it is corrected prior to its passage. There are some glaring deficiencies in Sections 161 and 162 of the new proposed legislation regarding consumer protection. These two clauses deal with the purpose and function of the Arbitration Board regarding individuals and small businesses not registered under the Companies Act. These clauses allow the Arbitration Board to deliberate upon claims regarding quantum ranging from $200,000 and a maximum of $5,000,000.
Firstly, it is our considered opinion that there should be no differentiation between the classes of insureds that can reach out to the Arbitration Board regarding the subject to quantum disputes. Individuals and small businesses as well as incorporated entities can all have quantum disputes, so why exclude one class of insureds from consumer protection laws? They are all consumers. My contention is that all classes of insureds should be allowed to revert to the Arbitration Board for quantum disputes. The way the Bill is currently drafted compels a corporation with a quantum dispute claim under $5m to approach the courts directly if they are dissatisfied with the decision of a carrier. Why should a corporation have to revert to our court system to have a small or any quantum dispute resolved? Our legal system has been known to be very lethargic in its efficiency, which can only redound to the ultimate detriment of our insureds. The courts should only have to be utilised when there is a dispute regarding legal liability.
Secondly, there should be no maximum cap for quantum disputes. It is a known fact that several individuals and small businesses possess huge amounts of assets that are insured that can become the subject of quantum disputes. This situation is similar for incorporated entities. We propose that this maximum cap be removed altogether. In fact, the minimum cap should be raised to at least $500,000 or even $1,000,000, since the Arbitration Board may be overwhelmed with a huge amount of quantum disputes regarding motor insurance claims. Surely, that was not the intention of these sections of the new Bill and has the ability to continuously frustrate consumers with valid claims. I urge that this matter be corrected prior to the passage of this important piece of legislation.
Yours faithfully
Raj Singh
CEO- Raj Singh Insurance Brokers