The Regulatory Framework

• Author: Denis Boivin
• Pages: 51-64

A. INTRODUCTION

Insurance law is private law. Not unlike torts and contracts, the func-

tion of this branch of law is to provide a relatively predictable frame-

work in which corrective justice can operate — that is, in which

disputes between suppliers and consumers of insurance products can

be settled. This regulatory framework has many interrelated sources,

the most obvious of which is the contract itself. When a conflict aris-

es, the first question is whether the parties have envisaged a specific

solution in their agreement. To the extent that the contract is clear, it

should arguably be enforced. As noted by the Supreme Court, the pri-

macy of private ordering is a fundamental tenet of the Canadian civil

justice system.1However, in many cases, the wording of the contract

clashes with countervailing factors or is open to conflicting interpreta-

tions. Moreover, the issue is often whether a contractual relationship

exists at all or whether the terms of the agreement adequately reflect

the expectations of both parties. In all of these instances, the so-called

“will of the parties” provides limited guidance, so the regulatory frame-

work must be found elsewhere.

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THE REGULATORY

FRAMEWORK

chapter 3

1 See, for example, BG Checo International Ltd. v. British Columbia Hydro & Power

Authority, [1993] 1 S.C.R. 12 at 37.