The statutory provisions of Alberta’s amended Insurance Act are typical of the legislative terms used to define “accident and sickness” policies in Canada’s provinces and territories. This legislation still recognizes the difference between “disability” policies, which offer wage loss protection as part of a life insurance policy. The statutory terms deal only with “accident and sickness” policies.

The more significant statutory protections include the following mandated inclusions in the policy:

1. The conditions under which the policy may be reinstated, should it lapse;
2. Any action must be commenced within the time limits as set by the Insurance Act;
3. In the event of termination of a group policy, there is liability for a recurrence of a prior disability within at least 6 months following termination;
4. Continuity of coverage under a replacement group policy to allow for coverage to continue for persons “not actively at work” on the effective date of the new replacement policy;
5. In an individual policy, all exceptions or reductions in the sum payable must be clearly set out;

The “statutory conditions” are deemed to be included in every individual “accident and sickness” policy, the significant features of which are as follows:

1. The application, the policy and any attachment to the policy constitute the entire agreement and no agent can change or modify the contract;
2. All material facts relied upon by the insurer to defend a claim must be in writing;
3. If the insured changes occupations to a more hazardous occupation, liability on the insurer remains, but the coverage is reduced to the benefit sum that the premium would have paid for the more dangerous occupation;
4. Should the reverse occur and the insured advises in writing that he is in a less hazardous occupation, the insurer must reduce the premium or refund the differences in premiums;
5. Termination by the insurer must be on 15 days’ notice and be accompanied by appropriate premium refund;
6. Notice of a claim must be given no later than 30 days after the date of the event and proof must follow within 90 days from the same date;
7. Failure to comply with the above will not invalidate the claim provided that notice of proof is made “as soon as reasonably possible” and in no event later than one year, with appropriate explanations for the delay being given;
8. The insurer is given the right to examine the claimant as a condition precedent to making payment and “as often as it reasonably requires while a claim is pending”.

Other statutory protections ¹ given to individual and group accident and sickness policies include:

1. A two year limit on the right of the insurer to assert a failure to disclose or misrepresentation, absent fraud;
2. A misstatement of age with respect to an individual policy will allow the insurer to either adjust the benefits payable to reflect the correct age or adjust the premium;
3. A misstatement as to age in group policy, the policy terms will dictate the options available to the insurer;
4. And if the commencement or termination of the policy is consequential on age, the correct age governs.

Quebec has not followed these provisions although its “Insurance of Persons” statute provides similar terms and conditions as above.

The Alberta Insurance Act does not contain any other statutory protections for life insurance by which “disability” insurance is also provided. The one statutory provision which does apply relates to waiver and estoppel which is an insurer protective term. It requires that waiver and/or estoppel be subject to writing from the insurer or proof that the insurer’s conduct has caused the insured to believe that compliance with given requirement is excused completely or in part, and that there has been prejudicial reliance on same by the insured. In essence, these rules are the same for all provinces and territories.

Ontario’s legislation is unique in that the new January 2004 limitation period does not apply to policies which pre-dated the legislation. As statutory conditions which then existed will still apply to such policies, even if later repealed, regard should be had to the prevailing conditions.

The following is a summary of the legislative differences between the Part V and Part VII sections of the Ontario Insurance Act relating to limitation issues for pre-January 1 2004 policies.

In addition to the statutory terms, regard must also be had to the terms of the individual policy terms. The general principles of interpretation are also important.