The Participants

AuthorDenis Boivin
Pages3-24
3
CHAPTER 1
THE PARTICIPANTS
A. INTRODUCTION
Who are the key players in the Canadian insurance industry and what
are their motives for participating in this industry? Insurance is a
product and a service; it has both providers and consumers. The for-
mer are usually in the business of making prof‌its and can collectively
be described as “insurers.” The latter are in search of peace of mind
and are willing to make considerable f‌inancial sacrif‌ices to secure it.
They are usually described as “insureds.” The relationship between
providers and consumers of insurance is facilitated by a number of
middlemen and women known as intermediaries. These include agents,
brokers, and adjusters. For intermediaries, insurance is a way of mak-
ing a living; for many, it is a self-regulated profession. In the sections
that follow, each participant is described in greater detail.
B. INSURANCE PROVIDERS
Insurance products and services cannot be provided by just anyone.
For reasons discussed in Chapter 3, the supply of insurance is heavily
regulated in Canada. Generally speaking, there are two types of insur-
ance providers operating in the Canadian industry: public and private.
INSURANCE LAW4
There are also “self-insurers.” For instance, some corporations have
large and widespread operations. In certain areas of their exposure,
they can set money aside to meet future obligations as they arise. This
money corresponds to the premiums that they would otherwise pay to
an insurer to provide them with coverage. In effect, these corporations
are insuring themselves by internalizing risks, rather than transfer-
ring them to someone else. Because self-insurers deal exclusively with
themselves, they are not subject to the regulations and principles of
law described in this book. As far as the law of insurance is concerned,
self-insurers are in the same position as people who save their money
for a “rainy day”; they personally accept the risk that their future obli-
gations may exceed the savings they have accumulated.
1) Public Insurers
Public insurers are creatures of the State. They are found at the federal,
provincial, and territorial levels of government. They assume many dif-
ferent forms, including government agencies, boards, and Crown cor-
porations. Public insurers represent the interests of the governments
that establish them, administering insurance schemes created by those
governments. They are generally funded through a mixture of tax dol-
lars, premiums, levies, and user fees. They typically have a monopoly
in their respective spheres of activity, although limited competition
may be permitted in certain circumst ances. Thus, they have a relatively
stable clientele. In fact, the procurement of public insurance is genera lly
mandatory. Consumers have little choice but to pay for the products and
services provided by public in surers. Like all government bureaucracies,
public insurers are motivated by something other than earning prof‌its.
Simply put, they are part of the Canadian social safety net. Their raison
d’être is the provision of products and services deemed essential to the
Canadian public.
a) Automobile and Health Insurance
Examples of public insurers abound in t his country. In the f‌ield of auto-
mobile insurance, for instance, there are currently four public insur-
ers in Canada. From West to East, they are the Insurance Corporation
of British Columbia, the Saskatchewan Government Insurance,the
Manitoba Public Insurance, and the Société de l’assurance automobile
du Québec.1 These government bodies offer basic automobile insurance
1 The statutes th at create these four public insu rers are Insuran ce Corpora tion
Act, RSBC 1996, c 228; The Saskatche wan Government Insurance Act, 1980, SS

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