The Participants

• Author: Denis Boivin
• Pages: 3-24

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