Insurance Law
The central principle of insurance is to pool risks. The goal is to allocate the risks of a loss from the individual to a large number of people. You pay a “premium” into a pool, from which losses are paid out. It does not matter if you suffer the loss or not — you do not get the premium back. If your house burns down, the loss is spread to the people contributing to the pool.
Insurance companies are generally the safe-keepers of the premiums. They hold a lot of money. Because maintaining economic stability is important, the government and the courts use a heavy hand to ensure these companies are closely regulated and fair to you, the insured consumer.
The Financial Services Commission of Ontario (FSCO) is an agency of the Ministry of Finance that regulates, among other things, insurance. FSCO licenses and regulates insurers in Ontario to ensure they comply with the law. FSCO is an amalgamation of the former Ontario Insurance Commission, the Pension Commission of Ontario, and the Deposit Institutions Division of the Ministry of Finance.
FSCO administers the following Ontario statutes (and related regulations):
- Insurance Act
- Compulsory Automobile Insurance Act
- Prepaid Hospital and Medical Services Act
- Registered Insurance Brokers Act
- Motor Vehicle Accident Claims Act
- Co-operative Corporations Act
- Credit Unions and Caisses Populaires Act
- Loan and Trust Corporations Act
- Mortgage Brokerages, Lenders and Administrators Act, 2006
- Pension Benefits Act
The Financial Services Tribunal is an independent, decision-making body. It hears appeals from decisions and reviews proposed decisions of the Superintendent of FSCO and of the Deposit Insurance Corporation of Ontario.
In addition to the government, various players are involved in the insurance industry, including insurance companies, adjusters, brokers, and agents.
An insurance contract’s five basic elements are: (i) an undertaking of one person; (ii) to indemnify another person; (iii) to pay a sum of money or other thing of value; (iv) from loss or liability in respect of an event; (v) the happening of which is uncertain.
An insurance contract is a legally binding agreement in which the insured (you) pays a fee to the insurer, and in exchange, the insurer agrees to pay the beneficiary of the policy (which may or may not be the insured) a given amount if specific events occur.
For instance, life insurance pays a beneficiary when the insured dies, auto insurance pays the beneficiary if the insured gets into an auto accident, and disability insurance pays for lost income if the insured employee gets ill or injured and can’t work.
In an insurance contract, one party agrees to indemnify another against a predefined category of risks in exchange for a premium. Depending on the contract, the insurer may promise financially to protect the insured from the loss, damage, or liability resulting from some event. There is almost always an upper limit or cap on the amount of monetary protection.
Insurance can cover various aspects of one’s life, including property (e.g. home, auto, bank deposit), fire loss, mortgage, travel/medical, property title, critical illness, long-term disability, and cargo, and most importantly, your life.
Insurance law is complicated. Insurance law disputes usually involve interpreting wordy contracts, and navigating the complex web of insurance law statutes and regulations. Don’t get overwhelmed or discouraged. Turn over your case to our team of trusted professionals. We will explain to you the law as it applies to your case in simple language. We will advise you about the best course of action in your particular circumstances.
We at HLF cut to the chase. If your insurance company is avoiding payment, we can help. We will tenaciously represent you. Sometimes just retaining a lawyer is enough to persuade your insurer to pay. You deserve no less. Call us to schedule an appointment.
