guarantee insurance

insurance fund

insurer

marine insurance

paid in

(b) a record of all securities deposited by each insurer with the Minister of Finance and Municipal Affairs, naming them in detail, their par value, their date of maturity and value at which they are received as deposit;

(c) a record of all claims of which notice of dispute is filed pursuant to this Act; and

(d) a record of agents licensed or authorized under this Act.

Inspection of books and records

List of insurers, suspensions etc. published annually

Evidence of being licensed, certificate of Superintendent

9. (1) A certificate under the hand and seal of office of the Superintendent that on a stated day an insurer mentioned therein was or was not licensed under this Act, or that any insurer was originally admitted to license or that the license of any insurer was renewed, suspended, revived, revoked or cancelled on a stated day, is evidence of the facts stated in the certificate, without proof of the signature of the Superintendent or official signing the same.

Evidence of filing documents

Determination of right to be licensed

11. (1) Every decision of the Superintendent upon an application for a license shall be in writing and notice thereof shall be forthwith given to the insurer.

Certified copy of decision

(2) The insurer, or any person interested is entitled, upon payment of the prescribed fee, to a certified copy of the decision.

Reporting evidence by stenographer

Appeal to Lt. Gov. in C.

Inquiries re contracts or financial affairs of an insurer

Access to books, securities and documents of an insurer

Information to be provided

Annual visit to head office or chief agency of each licensed insurer & report thereon to Minister

16. (1) The Superintendent shall visit personally, or cause to be visited at least annually, the head office or chief agency in the province of every licensed insurer, other than a mutual benefit society having less than three hundred members, or any insurer as to which he adopts the inspection of some other government, and he shall verify the statement of the condition and affairs of each such insurer filed under this Act, and make such inquiries as are necessary to ascertain its ability to provide for the payment of its contracts as they mature, and whether or not it has complied with all the provisions of this Act applicable to its transactions; and the Superintendent shall report thereon to the Minister as to all matters requiring his attention and decisions.

Visit head office located outside province

(2) Where the head office of any such insurer is not in the province the Minister may, in his discretion, instruct the Superintendent to visit the head office to inspect and examine its affairs and to make such inquiries as the Minister requires.

Assist Superintendent in investigation

(3) The officers or agents of the insurer shall produce its books and records for the inspection of the Superintendent or other person making the inspection, and shall otherwise facilitate the examination so far as is in their power.

Production of books and records at head office or chief agency of insurer

(4) In order to facilitate such inspection the Superintendent, with the approval of the Minister, may require the insurer to produce the books and records at the head office or chief agency of the insurer in the province or at such other place as the Superintendent directs; any officer of the insurer who has custody of the books and records so attending is entitled to be paid by the insurer the actual expenses of the attendance.

Abstracts of books & vouchers, valuation of assets & liabilities of insurer

(5) The Superintendent, with the approval of the Minister, may cause abstracts to be prepared of the books and vouchers and a valuation to be made of the assets and liabilities of any such insurer and the cost thereof upon the certificate of the Superintendent, approved by the Minister, shall be paid by the insurer.

Payment of account by insurer if out of province

(6) Where the office of an insurer at which an examination is made is out of the province, the insurer shall pay the account of the Superintendent in connection with such examination upon the certificate of the Superintendent approved by the Minister.

Inspection report by another government, adoption by P.E.I.

Head office of insurer outside province, service

17. (1) Where the head office of a licensed insurer is outside the province, notice or process in any action or proceeding in the province may be effectually served upon the insurer by leaving three copies of such notice or process with the Superintendent, or in his office with the person there in charge, or by forwarding such copies to the Superintendent by registered mail.

Notice of post office address, filed, to be

(2) Every licensed insurer shall file in the office of the Superintendent notice of a post office address to which any such notice or process may be forwarded by the Superintendent and shall notify the Superintendent of any change in the address.

Copy of notice returned by post to insurer

(3) The Superintendent shall forthwith after the receipt of such notice or process in triplicate, forward one copy thereof to the insurer by registered mail, postage prepaid, addressed in the manner last notified, to him for this purpose by the insurer.

Record of all service of process

(4) The Superintendent shall keep a record of all such proceedings, showing the day and hour of such service of process.

Judgment not to be entered against insurer until

Annual report to Minister, contents & publication

18. (1) The Superintendent shall prepare for the Minister, from the statements filed by the insurers and from any inspection or inquiries made, an annual report showing particulars of the business of each insurer as ascertained from such statements, inspection and inquiries; and such report may at the discretion of the Minister be printed and published.

Assets permitted to be shown for insurers

(2) In his report the Superintendent shall allow as assets only such of the investments of any insurer as are authorized by this Act, its charter or any other Act applicable to such investments.

Corrections in annual statements

(3) In his report the Superintendent shall make the necessary corrections in the annual statement of any insurer and may increase or diminish the liabilities of such insurer to the true and correct amounts thereof as ascertained from any examination of its affairs.

Value of real estate, appraisal

(4) If it appears to the Superintendent, or if he has any reason to suppose, from the annual statement that the value placed by an insurer, incorporated and licensed under the laws of the province, upon any of its real estate is too great, he may either require the insurer to secure an appraisement of the real estate by one or more competent valuators, or may himself procure the appraisement at the expense of the insurer, and the appraised value, if it varies materially from the statement made by the insurer, may be substituted in the annual report of the Superintendent.

Land used as security for loans, appraisal, amending, reporting

(5) In like manner the Superintendent may procure an appraisement of any parcel of land which constitutes the security for any loan, and if from the appraisal it appears that the parcel is not adequate security for the loan and accrued interest, he may reduce the value to such an amount as is fairly realizable from such security, in no case to exceed the appraised value, and may insert the reduced value in his report.

Appraisal of securities of an insurer

(6) In like manner the Superintendent may make or cause to be made an appraisal of the security taken for any investment of the insurer, and if it appears that the value of the securities as shown on the books of the insurer is greater than its true value as shown by the appraisal, he may reduce the book value of the same to such amount as is fairly realizable therefrom, and in no case to exceed such appraised value, and may insert the reduced amount in his annual report.

Disposal & realization of investments by insurer upon order of Superintendent

(7) The Superintendent may require any insurer incorporated and licensed under the law of the province to dispose of and realize any of its investments acquired after October 1, 1933, and not allowed in his report, and the insurer shall, within sixty days after receiving such request, absolutely dispose thereof and, if the amount realized therefrom falls below the amount paid by the insurer therefor, the directors of the insurer are jointly and severally liable for the payment to the insurer of the amount of the deficiency.

Protest by director to exonerate himself from liability

(8) Notwithstanding subsection (7) if any director present when such an investment was authorized did forthwith, or if any director then absent, did, within eight days after he becomes aware of such investment, protest and give notice thereof by registered letter to the Superintendent, such director may thereby, and not otherwise, exonerate himself from such liability.

Appeal to Lieutenant Governor in Council

Request for Superintendent's decision in writing & time for filing appeal

19. (1) Where by this Act an appeal to the Lieutenant Governor in Council is given to any person, the Superintendent shall, at the request of such person, give a certificate in writing, setting forth the ruling complained of and his reasons therefor, and the ruling shall be binding upon such person, unless within ten days after giving thereof such person serves upon the Superintendent notice of his intention to appeal therefrom, setting forth the grounds of appeal, and within ten days thereafter files his appeal with the Lieutenant Governor in Council and with due diligence prosecutes the same, in which case action on such ruling shall be suspended until the Lieutenant Governor in Council renders judgment thereon.

Decision to be certified and filed with Clerk of Executive Council

PART II

Undertaking insurance in province, when deemed

20. (1) Any insurer undertaking a contract of insurance which, under this Act, is deemed to be made in the province, whether the contract is original or a renewal, except the renewal of life insurance policies, is deemed to be undertaking insurance in the province within the meaning of this Part.

(a) undertakes or offers to undertake insurance;

(b) sets up or causes to be set up any sign containing the name of the insurer;

(c) maintains or operates either in its own name or in the name of an agent or other representative, any office for the transaction of the business of insurance either within or outside the province;

(d) distributes or publishes or causes to be distributed or published any proposal, circular, card, advertisement, printed form, or a like document;

(e) makes or causes to be made any written or oral solicitation for insurance;

(f) issues or delivers any policy of insurance of interim receipt or collects or receives or negotiates for or causes to be collected or received or negotiated for any premium for a contract of insurance or inspects any risk or adjusts any loss under a contract of insurance; or

(g) prosecutes or maintains any action or proceeding in respect of a contract of insurance,

is deemed to be an insurer carrying on business in the province within the meaning of this Act.

Subscribership and membership, certain required

(3) Every insurance company licensed to issue a motor vehicle liability policy shall:

(a) subscribe to the facility or any automobile insurance pool as approved by the Superintendent and shall be bound by any and all provisions governing such subscribers and members;

Plan for automobile insurance coverage, including uninsured motorists

21. (1) Without prejudice to subsection 20(3), every insurer carrying on the business of automobile insurance in the province shall be a participant in, and subject to the terms and conditions of, a government approved plan to ensure a market for automobile insurance to all owners and licensed operators of motor vehicles and to provide, in accordance with section 245.1 to 245.993, payment with respect to claims for damages made by persons who are not insured under a contract within the meaning of section 245 and who have no other insurance, or who have other insurance that is inadequate, with respect to the damages claimed and shall, in accordance with those articles of association or bylaws and this Act, establish and implement the Plan of Operation and carry out its obligations in the province with respect to that Plan.

Association

(2) A plan under subsection (1) may be administered by an association of insurers.

Approval

(3) A copy of the constitution and bylaws of an association and the rules of a proposed plan shall be submitted to the Superintendent for approval and no association or plan shall become effective until such documents are filed with the Superintendent and he gives approval thereto.

Changes

(4) No change shall be made in the documents referred to in subsection (3) and no termination of a plan shall be effective unless notice thereof is given to the Superintendent at least thirty days before the proposed effective date and the change or termination is approved by the Superintendent.

Rates

Agents

LICENSES

Insurers must be licensed

22. (1) Every insurer carrying on business in the province shall obtain from the Superintendent and hold a license under this Act.

Offence for not being licensed

(2) Every insurer carrying on business in the province without having obtained a license as required by this section is guilty of an offence.

(3) Any person who, within the province, does or causes to be done any act or thing mentioned in section 20 on behalf of, or as agent of, an insurer not licensed under this Act, or who receives, directly or indirectly, any remuneration for so doing, is guilty of an offence.

Exception to requirement for license 

(4) The following shall not be deemed insurers within the meaning of this Act or required or entitled to be licensed as such:

(b) a trade union which, under the authority of its charter, has an assurance or benefit fund for the benefit of its own members exclusively;

(c) such other organizations as the Lieutenant Governor in Council determines.

Insurer carrying on business outside province

Reinsuring risk outside province

Licenses, issuance of to certain classes

24. (1) Upon due application and upon proof of compliance with this Act, the Superintendent may issue a license to undertake contracts of insurance and carry on business in the province to any insurer coming within one of the following classes:

(a) joint stock insurance companies;

(b) mutual insurance companies;

(d) mutual benefit societies;

(e) companies duly incorporated to undertake insurance contracts and not within any of the foregoing classes;

(f) underwriters or syndicates of underwriters operating on the plan known as Lloyd's;

(g) underwriting members of the Canadian Insurance Exchange.

License, authority for certain powers

License for one or more classes of insurance

25. (1) Subject to Parts of this Act particularly relating to classes of insurers mentioned in section 24, a license may be granted to an insurer to carry on any one or more of the classes of insurance defined in section 1 and such other classes as may be prescribed by the regulations.

Limitation, imposed on license

(2) A license may be issued subject to such limitation and conditions as the Minister may prescribe.

Conditions imposed on licenses to carry on automobile insurance

(3) A license to carry on automobile insurance in the province is subject to the following conditions:

(b) in any action in another province or territory of Canada against the licensed insurer, or its insured, arising out of an automobile accident in that province or territory, the insurer shall appear and shall not set up any defence to a claim under a contract evidenced by a motor vehicle liability policy issued in this province or territory that might not be set up if the contract were evidenced by a motor vehicle liability policy in the other province or territory.

Cancellation of license if breach of conditions

(4) The license to an insurer who commits a breach of either of the conditions of license set out in subsection (3) may be cancelled.

(5) Every insurer licensed for the transaction of life insurance may, under the authority of its license, unless the license expressly provides otherwise, issue annuities and endowments of all kinds and also include in any policy of life insurance, in respect of the same life or lives insured thereby, disability insurance and accidental death insurance.

Fire insurance license, authorizes insurance or reinsurance

(6) Every insurer licensed to carry on fire insurance may, subject to its act of incorporation, and subject to the restrictions prescribed by the license, insure or reinsure any property in which the insured has an insurable interest against loss or damage by fire, lightning or explosion and may insure or reinsure the same property against loss or damage from falling aircraft, earthquake, windstorm, tornado, hail, sprinkler leakage, riot, malicious damage, weather, water damage, smoke damage, civil commotion and impact by vehicles and any one or more perils falling within such other classes of insurance as are prescribed by the regulations.

Fire insurance, license, authorizes insurance against loss or damage under Part IV policy

(7) An insurer licensed to carry on fire insurance may insure an automobile against loss or damage under a policy falling within Part IV of this Act, but in the case of a purely mutual fire insurance corporation, incorporated or licensed in Prince Edward Island and carrying on business on the premium note plan, the automobile shall be specifically insured under a policy separate from that insuring other property.

Determination of class of insurance into which a contract falls

Capital requirements

26. (1) A license shall not be granted to a joint stock insurance company not licensed before January 1, 1989, unless the company furnishes to the Superintendent satisfactory evidence that

(a) if the company is applying for a license to transact the business of life insurance, the company has paid up capital and surplus of not less than $5,000,000 of which at least $2,500,000 is paid up capital and at least $1,250,000 is unimpaired surplus;

(b) if the company is applying for a license to transact any class of business other than life insurance, the company has paid up capital and surplus of not less than $3,000,000 of which at least $1,500,000 is paid up capital and at least $750,000 is unimpaired surplus.

License for underwriters

(2) A license shall not be granted an insurance company mentioned in clause 24(1)(e), or to an underwriter or syndicate of underwriters operating on the plan known as Lloyd's or to an underwriting member of the Canadian Insurance Exchange except upon proof that

(a) its, or his, net surplus of assets over all liabilities exceeds the paid up capital stock required in the case of a joint stock company under the preceding subsection, carrying on the same class of insurance; and

(b) its net surplus together with the contingent liability of members, if any, exceeds the subscribed and allotted capital stock required in the case of such a joint stock insurance company.

License for mutual insurance company

(3) A license shall not be granted to a mutual insurance company, except upon proof that

(a) the total amount insured under the contracts of the company in force at the expiration of one year from the date of the issue of the initial license amounts to at least $100,000;

(b) thereafter the total amount insured under contracts at all times equals at least $100,000.

Proof of compliance with Act

(4) A license shall not be granted to any insurer except upon proof that the insurer has complied with the Part of this Act and regulations applicable thereto.

Head office of insurer outside province, license issued upon proof of certain facts

Publication of notice of application for license

Insurer must file certain documents and information before issuance of license

28. (1) Before the issue of a license to an insurer, the insurer shall file in the office of the Superintendent

(a) a certified copy of its Act or charter of incorporation, which shall include its regulations verified in manner satisfactory to the Superintendent;

(b) an affidavit or statutory declaration that the insurer is still in existence and legally authorized to transact business under its charter;

(c) a certified copy of its last balance sheet and auditor's report thereon;

(d) notice of the place where the head office of the insurer is situated, if outside the province;

(e) notice of the place where the chief agency or head office of the insurer in the province is to be situated;

(f) a statement showing the amount of the capital of the insurer and the number of shares into which it is divided, the number of shares subscribed and the amount paid up thereon;

(g) a certified copy of the power of attorney to the Canadian chief agent, if any;

(h) notice of appointment of chief agent or resident manager for the province;

(i) a statement in such form as is required by the Superintendent of the condition and affairs of the insurer on December 31 then last preceding or up to usual balancing day of the insurer or as the Superintendent requires; and

(j) such other evidence as the Superintendent requires.

Change in charter or head office, notification of Superintendent

Costs of incorporation & list of unpaid liabilities, statement to accompany application for license

29. (1) Upon application being made for a license by an insurer incorporated under the laws of the province after October 1, 1933, there shall be submitted to the Superintendent a sworn statement setting forth the several sums of money paid in connection with its incorporation and organization, and therein a list of all unpaid liabilities, if any, arising out of such incorporation and organization.

Limitation on payment of expenses before license issued

(2) Until the license is granted, no payment on account of such expenses, shall be made out of the moneys paid in by shareholders except reasonable sums for the payment of clerical assistance, legal services, office rental, advertising, stationery, postage and expense of travel, if any.

License not to be issued if certain procedures not followed

License issued if security deposited

30. (1) When an insurer has deposited the security required by this Act and has otherwise complied with the requirements thereof and of any other Act of the province, the Superintendent may issue a license to it.

Form of license

(2) The license shall be in such form as the Superintendent may determine and shall

(a) specify the business to be carried on by the insurer;

(b) remain in force for a period not exceeding two years;

(c) expire on such date as may be specified therein,

CANCELLATION OF LICENSE

Where Superintendent to cancel license

31. (1) Upon written notice to the Superintendent and upon proof of an undisputed claim arising from loss insured against in the province remaining unpaid for the space of sixty days after becoming due, or of a disputed claim, after final judgment and tender of a valid discharge, being unpaid, the Superintendent shall cancel the license of the insurer; but the Superintendent shall first by registered letter mailed to the insurer at its chief agency or head office within the province allow and require the insurer within ten days to show adequate cause why its license should not be cancelled.

Deposit not maintained, where

Assets of insurer insufficient or insurer failed to comply with law, Superintendent to report to Minister

33. (1) If the Superintendent, upon examination, or from annual statements, or upon other evidence, finds that the assets of any insurer are insufficient to justify the continuance of the insurer in business or to provide proper security to persons effecting insurance with the insurer in the province or that the insurer has failed to comply with any provision of law, or its charter, he shall so report to the Minister.

When assets deemed to be insufficient

(2) In the case of an insurer undertaking contracts of life insurance, if its policy reserves, and, in the case of any other insurer, if its unearned premiums, in both cases, respecting outstanding contracts made or deemed to be made in the province, together with any other liabilities in the province, exceed its assets in the province, including the deposit in the hands of the Minister of Finance and Municipal Affairs, the assets of the insurer shall be deemed insufficient to justify its continuance in business within the meaning of subsection (1).

Suspension or cancellation of license by Lt. Gov. in C.

(3) If the Minister, after consideration of the report and after hearing or giving notice of a hearing to the insurer, and upon any further investigation he thinks proper, reports to the Lieutenant Governor in Council that he concurs in the report of the Superintendent, the Lieutenant Governor in Council may suspend or cancel the license of the insurer.

Transacting business after suspension etc., an offence

(4) Upon the publication of notice of the suspension or cancellation of license in the Gazette, any person transacting business on behalf of the insurer, except for winding-up purposes, is guilty of an offence.

Limited or conditional license, issuance to protect insureds

Suspension etc. in another province or by Canada

Reviving a suspended or cancelled license

Violation of Act by insurer, report to Minister, powers of Minister

DEPOSITS

Sections 37 to 60 are repealed by 1994,c.27,s.4.

INVESTMENTS

Permitted investments for surplus funds & reserve

61. (1) An insurer, incorporated and licensed under the laws of the province, may invest its surplus funds and reserve in the following securities and no others:

(a) securities in which trustees are by law permitted to invest trust funds, but the total amount of investments in first mortgages on land shall not exceed twenty per cent of the total amount of the insurer's investment;

(b) the stock, funds or government securities issued or guaranteed by the United States;

(c) the bonds or debentures of any municipality or school district in Canada, or bonds or debentures secured by rates of taxes levied under the authority of the government of any province of Canada on property situated in such province, and collectable by the municipalities in which such property is situated;

(d) terminating debentures of incorporated companies which have, in Canada, for the last preceding five consecutive years, been actually supplying gas, water, heat, light, power or electricity to the public or to any municipal corporation; or of steam, electric or street railway or telegraph or telephone companies in actual operation in Canada but loans on the security of, or the investment in debentures of any of the companies mentioned in this clause shall not in the aggregate exceed one-fifth of the paid up capital of the insurer;

(e) in the case of a life insurer, life or endowment contracts issued by the insurer, but not in excess of the loan value of such contract.

Uninvested funds, on deposit

BOOKS OF INSURERS

Stock register open to examination

RECORDS AND RETURNS

Fire insurance insurers, record of premium income

64. (1) Every licensed insurer that carries on the business of fire insurance shall keep a record of its premium income derived from risks located in the province and of claims paid in respect of such risks so as to show its experience according to the classification of occupancy hazards of the National Board of Fire Underwriters, with such modifications as the Superintendent prescribes.

(2) If it appears to the Minister on the report of the Superintendent that such records are not kept in such a manner as to show correctly the experience of the insurer, the Minister may nominate an accountant to proceed under his direction to audit the books and records of the insurer and to give such instructions as will enable the insurer to keep the records correctly thereafter.

Expense of audit

(3) The expense of such an audit shall not exceed $15 per day and necessary travelling expenses and the account shall, when certified and approved by the Superintendent, be paid forthwith by the insurer.

Fire insurance insurer, statement of premium income & loss

(4) Every licensed insurer undertaking the business of fire insurance shall, if required by the Superintendent, prepare and file annually with the Superintendent on or before May 1 in each year, on a printed form to be supplied by the Superintendent, a sworn statement of the premium income and losses experienced within the province for the year last preceding the date of the return according to the records required to be kept by this section.

Offence for contravening section

Automobile insurance

65. (1) Every licensed insurer that carries automobile insurance shall prepare and file with the Superintendent, or with such statistical agency as he may designate,

(a) a record of its automobile insurance claims, including information on identifiable individuals respecting specific automobile insurance claims; and

(b) a record of its automobile insurance premiums, and of its loss and expense costs in the province, in such form and manner and according to such system of classification, as he approves.

Disclosure of claims information to insurers

(1.1) The Superintendent may make available to automobile insurers information collected pursuant to subsection (1) either directly or through an agency.

Compilation of data at expense of insurers

(2) The Superintendent may require any agency so designated to compile the data so filed, and the expense of making such compilation shall be apportioned among the insurers, whose data are compiled by such agency, by the Superintendent, who shall certify in writing the amount due from each insurer and the amount shall be payable by the insurer to the agency forthwith.

(a) "base rate per vehicle" has the meaning prescribed by the regulations;

(b) "earned vehicle" has the meaning prescribed by the regulations;

(c) "levy year" means a calendar year in which premiums are receivable in respect of automobile insurance business transacted in the province.

Levy

(2) Every licensed insurer that carries on the business of automobile insurance shall, in respect of each levy year, pay to the Superintendent a levy equal to the base rate per vehicle multiplied by the number of earned vehicles.

Quarterly payment of levy

(3) Every licensed insurer liable to pay a levy under subsection (2) shall, on or before the last day of the months of March, June, September and December in each levy year, pay an amount equal to one-quarter of the levy it estimates will be payable in respect of that levy year, calculated by reference to the number of earned vehicles for the preceding levy year and the base rate per vehicle.

Return and adjustment

(4) Every licensed insurer liable to pay a levy under subsection (2) shall, on or before March 31 of the year following the levy year, file a return, in such form as the Superintendent may require, showing the amount of the levy payable by it in respect of the levy year and shall remit to the Superintendent the amount of the levy, if any, payable by it after taking into account payments made under subsection (3).

Refund

(5) Where the payments made under subsection (3) exceed the amount of the levy payable, the Superintendent shall refund the excess amount within thirty days following receipt of the return.

Interest

(6) Where any levy is not paid in full on the date on which payment is due, the licensed insurer shall pay to the Superintendent the amount due, together with interest on the unpaid portion at the rate of 6% from the due date to the date of payment.

Bylaws, delivery to Superintendent

Balance sheet, financial statements, & auditor's report, delivery to Superintendent

Auditor to report to shareholders certain matters

68. Each auditor of an insurer in the report to be made to shareholders shall state

(b) in the case of insurers transacting other than life insurance, that he has checked the reserve of unearned premiums and that it is calculated as required by this Act;

(c) that he has examined the reserve for unpaid claims and in his opinion it is adequate;

(d) that he has verified the balances owing by agents and other insurers;

(e) that the balance sheet does not include as assets, items prohibited by this Act from being shown in the annual statements required to be filed thereunder;

(f) that, after due consideration, he has formed an independent opinion as to the position of the company and that, with his independent opinion so formed, and according to the best of his information, and the explanation given him, the balance sheet sets forth fairly and truly the state of affairs of the insurer; and

Insurer's statement of condition of affairs for preceding year, contents

69. (1) Every licensed insurer shall prepare annually and deliver to the Superintendent on or before the last day of February of each year, a statement of the condition of affairs of the insurer as at December 31 last preceding, which statement shall be in such form as is prescribed by the Superintendent and shall exhibit the assets, liabilities, receipts and expenditures of the insurer for the year ended on that date, and it shall exhibit particulars of the business done in the province during such year and such other information as is required by the Minister or Superintendent.

Statement of corporation, verification by directors

(2) In the case of a corporation the statement shall be verified by the president, vice-president or managing director, or other director appointed for the purpose by the board of directors, and by the secretary or manager of the corporation.

Explanation of statement

Certain classes of insurance to show actual portions of unearned premiums as liabilities

(4) In the case of all classes of insurance other than life insurance, and insurance on the premium note plan, the statement shall show as a liability of the insurer, eighty per cent of the actual portions of unearned premiums on all business in force on December 31 then last past, or eighty per cent of fifty per cent of the premiums written in its policies and received in respect of contracts having one year or less to run, and in proportion on those for longer periods.

Valuation of outstanding contracts of insurance, liability in life insurance

(5) In the case of insurers transacting life insurance the statements shall show as a liability the valuation of outstanding contracts of insurance according to the standard for valuation of policies of life insurance prescribed by this Act, or such higher standards as the insurer, with the approval of the Superintendent, adopts.

Unpaid balances on business written prior to Oct. 1 not to be shown as assets

(6) The statement shall not show as assets the unpaid balances owing by agents or other insurers in respect of business written prior to October 1 in the preceding year, or bills receivable on account thereof, or unpaid capital or premium on subscribed shares of capital stock, or investment in office furnishings or equipment, nor shall such statements include as assets any investments not authorized by any Act to which the insurer is subject.

Valuation of securities by insurer

(7) Every licensed insurer may, in its annual statement or in any valuation of its securities, value all of its securities, having a fixed term and rate and not in default as to principal or interest, according to the following rules,

(a) if purchased at par, at the par value;

(b) if purchased above or below par, on the basis of the purchase price adjusted so as to bring the value to par at maturity and so as to yield meantime the effective rate of interest at which the purchase was made,

Offence for insurer to publish financial statement differing from one filed

LIFE INSURANCE RESERVES

Valuation of contracts of life insurance, method

72. (1) The valuation of contracts of life insurance issued by insurers incorporated and licensed under the law of the province, except contracts of fraternal societies licensed under this Act, shall be based on the British Officers' Life Tables, 1893, Om (5), and on a rate of interest of three and one-half per cent per year, but any such insurer may, with the approval of the Superintendent, adopt the American Men Ultimate Table of Mortality Am (5), with interest at three and one-half per cent per year, for the valuation of contracts issued on and after January 1, 1929.

Deduction permitted from valuation

(2) In computing the valuation a deduction may be allowed from the value of a policy in the first policy year of an amount ascertained in the following manner, namely: in the case of a twenty payment life policy or any other form of policy, except a term policy, the net annual premium upon which is less than the corresponding net annual premium of a twenty payment life policy, the difference between the net annual premium for which such policy and the corresponding net premium for a one year term insurance, and in the case of a policy with a net annual premium greater than that of a twenty payment life policy, an amount equal to the deduction allowed in respect of a twenty payment life policy.

Deduction diminished in succeeding years

(3) After the first policy year the deduction allowed by subsection (1) shall be diminished each year by an amount not less than one ninth of the deduction in the first policy year so that in the tenth year from the date of issue, the value of the policy shall not be less than that ascertained in accordance with subsection (1).

Policies subject to less than ten annual premiums, deductions for

(4) In case of policies subject to less than ten annual premiums the deduction ascertained as provided in subsection (2) shall, in each year after the first policy year, be reduced by an amount not less than the equal parts thereof required to provide that the value of the policy at the end of the premium paying period shall be not less than that ascertained in accordance with subsection (1).

Contracts of life insurance to be self supporting

(5) No insurer shall issue any contract of life insurance that does not appear to be self-supporting upon reasonable assumption as to interest, mortality and expenses.

(6) Where a contract of life insurance provides for accident or sickness insurance benefits, the Superintendent may prescribe by regulations the basis for valuing such benefits, but no deduction shall be allowed from the basis so fixed under subsection (2), and in the valuation of the life insurance benefits under such contracts, the amount of the net annual premium upon which the deduction provided for in the preceding subsections is to be based, shall be the net annual premium exclusive of the premium for such accident or sickness benefits.

Annuity contracts, valuation of, method

INSURANCE WITH UNLICENSED INSURERS

Prohibition from contracting with unlicensed insurer

73. (1) No person in the province shall enter into a contract of insurance with an insurer not licensed under this Act, except through a special broker duly licensed.

UNDERWRITERS' AGENCIES

Permit required to issue insurance through an underwriters' agency

74. (1) An insurer shall not issue a policy of insurance through an underwriters' agency unless the insurer is licensed to carry on business in the province and has obtained from the Superintendent a permit to issue contracts of insurance through the agency.

Form of policy issued through underwriters' agency

(2) Every policy of insurance issued through an underwriters' agency shall be in a form approved by the Superintendent, and shall bear upon its face the name and address of the insurer in a prominent and conspicuous manner, and the name of the underwriters' agency shall not appear on the face of the policy.

Underwriters' agency name, location on policy

(3) On no other part of the policy shall the name of the underwriters' agency appear, except that for identification purposes the words "issued through the ……………………Underwriters' Agency" may be inscribed on the filing back of the policy, following the name of the insurer in a manner approved by the Superintendent.

Proof of form of policy to be provided with application for permit

(4) Upon an application for a permit under this section the insurer shall furnish to the Superintendent evidence of its approval and adoption of the form of policy to be issued through the underwriters' agency and of the authority of the agency to bind the insurer.

Form of permit & expiry of

(5) The permit shall be in a form prescribed by the Superintendent, and shall expire on December 31 of the year of its issue, but shall be renewable from year to year.

Annual return of business transacted

FORFEITURE FOR NON-USER OR DISCONTINUANCE

Incorporated insurer does not go into business within two years, discontinues business or has license suspended, corporate powers cease

75. (1) If an insurer incorporated under the law of the province does not go into actual operation within two years after incorporation, or if, after an insurer has undertaken contracts, it discontinues business for one year, or if its license remains suspended for one year, or is terminated otherwise than by effluxion of time and is not renewed within the period of sixty days, the insurer's corporate powers shall thereupon cease and determine, except for the sole purpose of winding-up its affairs; and the court upon the application of the Attorney General, or of any person interested, may limit the time within which the insurer shall settle and close its accounts, and may, for that purpose or for the purpose of liquidation generally, appoint a receiver.

Creditors' rights not affected prejudicially

(2) No such forfeiture affects prejudicially the rights of creditors as they exist at the date of the forfeiture.

Onus of proof of user on insurer

WINDING-UP

Notice of intent to voluntarily liquidate

76. (1) When an insurer incorporated under or subject to the law of the province proposes to go into voluntary liquidation, at least one month's notice thereof shall be given to the Superintendent.

Contents of notice

(2) The notice shall state the date at which contracts are to cease to be taken by the insurer, and the name and address of the liquidator, or the intention of the insurer to apply on a stated date for the appointment of a liquidator.

Persons on cash plan, entitlement to refund

Reinsurance of contracts by liquidator without consent of policyholders

78. (1) Upon a winding-up, the liquidator may, without the consent of the policyholders, arrange for the reinsurance of contracts in some other licensed insurer, and for the purpose of securing the reinsurance, the entire assets of the insurer in the province are available, except the amount required to pay the claims of the preferred creditors, the costs of liquidation, and the claims accrued under contracts, of which the insurer has received notice prior to the date of the reinsurance; all of the payments are a first charge upon the assets of the insurer, and its other creditors are entitled to a dividend on their claims only if the assets are more than sufficient to provide for such payments and the reinsurance.

Reinsurance of some only of the contracts

(2) If the assets of the insurer are insufficient to provide for the payments, and the reinsurance in full, the liquidator may effect reinsurance of such a percentage of the several contracts as the available assets provide.

Liquidation proceeds applied to

(3) If the liquidator fails to secure reinsurance, the assets shall, subject to the payment of the costs of liquidation and the preferred claims, be available to pay the claims of the policyholders, calculated as at the date of winding-up, in the manner provided in the case of the administration of a deposit.

Certain priorities not affected

Insurance business severable from other businesses of a company

80. (1) Where a fraternal society transacts endowment or expectancy insurance and has an endowment fund separate and distinct from its life insurance fund, the society may, by resolution passed at a general meeting after at least one months notice of such intended resolution, determine that the endowment or expectancy be discontinued, and that the endowment or expectancy fund be distributed in proportion among the members then in good standing who are contributing to the fund, to each member according to his total contribution.

Distribution of funds among persons entitled, discharge of liability

(2) After the resolution is assented to by the Superintendent and filed by him, the executive officers may proceed to ascertain the persons entitled to rank upon the fund and may distribute the fund among those entitled, and the distribution discharges the society and all executive officers thereof from all liability in respect of the fund and of the endowment or expectancy contracts undertaken by the society.

Where members interested in endowment or expectancy fund also interested as holders of life insurance contracts

Extension of license winding-up

PENALTIES

Penalty where no other provided

82. (1) Unless a penalty is otherwise provided, every person guilty of any act or omission prohibited or required by this Act, is guilty of an offence, and every person guilty of an offence is upon summary conviction liable to a fine of not more than $2,000 or to imprisonment for a term of not more than one year, or to both.

Suspension or cancellation of license where an offence committed

(2) In addition, where an insurer violates the prohibitions or fails to comply with the requirements of or is guilty of an offence under this Act, the Lieutenant Governor in Council may, upon the report of the Superintendent, suspend or cancel the license of the insurer.

Onus of proof of license on accused

(3) In any prosecution under this Act, whenever it appears that the accused has done any act or been guilty of any omission in respect of which he would be liable to some penalty under this Act or the regulations unless he had been duly licensed, it is incumbent upon the accused to prove that he is duly licensed.

(4) In case of default in making any return required by this Act to be made within a limited return, the insurer or the person required by this Act to make the return shall, in addition to the penalty provided by subsection (1), incur a further penalty of $100 for every month or part thereof during which such insurer or person neglects to file the return.

Penalty for each day default continues

(5) Every insurer undertaking insurance or carrying on business in the province without holding a license to do so may incur a penalty of twenty dollars for each and every day during which the default continues.

Penalty payable to

FEES AND REGULATIONS

Fees payable by insurer, prescribed

83. (1) The Lieutenant Governor in Council may prescribe the fees payable to the department by an insurer or other person for services performed under this Act.

Payment of fees precondition to license

(2) The insurer shall pay any such fees payable by it before a license or the renewal of a license is issued.

Payment of levy

(a) extending the provisions of this Act or any of them to a system or class of insurance not particularly mentioned herein;

(b) providing for and for the making of reciprocal or other arrangements with any government in Canada in connection with the licensing, regulation and inspection of insurers;

(c) generally for the better administration of this Act;

(d) prescribing license fees for insurers;

(e) prescribing definitions of "base rate per vehicle" and "earned vehicle" and such other matters as are considered necessary to give effect to the levy payable under section 65.1.

Regulations to be laid before Legislative Assembly

PART III

INSURANCE CONTRACTS IN PRINCE EDWARD ISLAND

Application of Part III

Contract of insurance delivered or mailed, evidence thereof, moneys payable thereunder

86. Where the subject matter of a contract of insurance is property in the province, or an insurable interest of a person resident within the province, the contract, if signed, countersigned, issued or delivered in the province or committed to the post office or to any person to be delivered to the insured, his assign or agent in the province shall be deemed to evidence a contract made therein, and be construed according to the law thereof, and all moneys payable thereunder shall be paid at the head office or chief agency of the insurer in the province, in lawful money of Canada. R.S.P.E.I. 1974, Cap. I-5, s.85.

Terms and conditions of contract to be set out in full

87. (1) All the terms and conditions of the contract of insurance shall be set out in full in the policy or by writing securely attached to it when issued, or subsequently attached thereto, and unless so set out no term of the contract or condition, stipulation, warranty or proviso modifying or impairing its effect shall be valid or admissible in evidence to the prejudice of the insured or beneficiary.

Renewal of contract, ss (1) satisfied if

(2) Where the contract, whether or not it provides for its renewal, is renewed by a renewal receipt, it is a sufficient compliance with subsection (1) if the terms and conditions of the contract are set out in the contract and the renewal receipt refers to it by its number or date.

Application for insurance, not deemed part of contract against insured, except

(3) The application of the insured shall not, as against him, be deemed a part of or be considered with the contract of insurance, except in so far as the court determines that it contains a material misrepresentation by which the insurer was induced to enter into the contract.

Contract not voided by certain statements in application

(4) No contract of insurance shall contain or have endorsed upon it, or be made subject to, any term, condition, stipulation, warranty or proviso to the effect that the contract is to be avoided by reason of any statement in the application therefor, or inducing the insurer to enter into the contract, unless such term, condition, stipulation, warranty or proviso is and is expressed to be limited to cases in which such statement is material to the contract; and no contract shall be avoided by reason of the inaccuracy of any such statement unless it be material to the contract.

Materiality is question of fact

(5) The question of materiality in any contract shall be a question of fact; and no admission, term, condition, stipulation, warranty or proviso to the contrary, contained in the application for insurance, or in the policy, or in any agreement or document relating thereto, shall have any force or validity.

Application of section

True copy of application

Contracts not to be inconsistent with Act

89. (1) No insurer shall make a contract of insurance inconsistent with this Act.

Non-compliance by insurer, no effect re insured's contract

Policy to contain certain information

90. (1) Every policy shall contain the name of the insurer, the name of the insured, the name of the person or persons to whom the insurance money is payable, the premium for the insurance, the subject matter of the insurance, the indemnity for which the insurer may become liable, the event on the happening of which the liability is to accrue and the term of the insurance.

Application of section

Application of section

91. (1) This section applies to a contract containing a condition, statutory or otherwise, providing, in the event of difference or disagreement between the insured and the insurer, for appraisal to determine the matters specified in the condition.

Appraisal of matters contained in condition, by whom

(2) The appraisal shall be made by two disinterested appraisers, the insured and the insurer each selecting one and the two so chosen then selecting a competent and disinterested umpire.

Determination of matters, failure to, reference to umpire

(3) The appraisers shall then determine the matters specified in the condition and, if they fail to agree, they shall submit their differences to the umpire, and the finding in writing of any two determines the matters.

(4) Each party to the appraisal shall pay the appraiser selected by him and shall bear equally the expense of the appraisal and umpire.

(b) the appraisers fail to agree upon an umpire within fifteen days after their appointment; or

(c) an appraiser or umpire refuses to act or is incapable of acting or dies,

Relief from forfeiture by court

Currency of payment

Waiver of term or condition of a contract

94. (1) No term or condition of a contract shall be deemed to be waived by the insurer in whole or in part, unless the waiver is stated in writing and signed by a person authorized for that purpose by the insurer.

Certain acts not deemed a waiver

Use of red ink prohibited on policy, except

Policy delivered but premium unpaid, effect on contract

96. (1) Where the policy has been delivered, the contract is as binding on the insurer as if the premium had been paid, although it has not in fact been paid, and although delivered by an officer or agent of the insurer who had not authority to deliver it.

Collection of unpaid premium by insurer, methods

(2) The insurer may sue for the unpaid premium and may deduct the amount thereof from the amount for which he is liable under the contract of insurance.

Insurer may terminate where cheque etc. given but not honoured

Forms for proof of loss, provided by insurer upon request

97. (1) Every insurer, immediately upon receipt of a request, and in any event not later than sixty days after receipt of notice of loss, shall furnish to the insured or person to whom the insurance money is payable, forms upon which to make the proof of loss required under the contract.

Non-compliance with subsection (1), offence

(2) An insurer who neglects or refuses to comply with subsection (1) is guilty of an offence, and, in addition, section 100 shall not be available to the insurer as a defence to an action brought, after such neglect or refusal, for the recovery of money payable under the contract of insurance.

Claims void under statutory conditions, payment optional

(3) It shall be optional with the insurer to pay or allow claims, wholly or in part, that are void under any statutory condition.

Consolidation of actions by Court

98. (1) Where several actions are brought for the recovery of money payable under a contract or contracts of insurance, the court may consolidate or otherwise deal therewith so that there shall be but one action for and in respect of all claims made in such actions.

Action brought for infants, all other entitled infants to be joined

(2) Where an action is brought to recover the share of one or more infants, all the other infants entitled, or the trustees, executors, or guardians entitled to receive payment of the shares of such other infants, shall be made parties to the action, and the rights of all the infants shall be determined in one action.

Apportionment by court among persons entitled to moneys

(3) In all actions where several persons are interested in the insurance money the court or judge may apportion among the persons entitled to any sum directed to be paid, and may give all necessary directions and relief.

Payment to alien, valid in province, where

Payment into court by insurer of money for which liability admitted

99. (1) Where an insurer cannot obtain a sufficient discharge for insurance money for which it admits liability, the insurer may apply to the court without notice for an order for the payment thereof into court, and the court may order the payment into court to be made upon such terms as to costs and otherwise as the court directs, and may provide to what fund or name the amount shall be credited.

 Action for recovery of money payable, limitation period

100. No action shall be brought for the recovery of money payable under a contract of insurance until the expiration of sixty days after proof, in accordance with the provisions of the contract,

(a) of the loss; or

(b) of the happening of the event upon which the insurance money isto become payable,

NOTICES

Notice, how given

101. (1) Subject to any statutory condition, any notice given by an insurer, when the mode thereof is not otherwise expressly provided, may be given in the case of a member or person insured by mailing it to his post office address given in his original application for insurance or otherwise notified in writing to the insurer.

Delivery by written notice, how given

INSURANCE AS COLLATERAL SECURITY

Mortgagor or purchaser to insurer, term satisfied where

102. (1) When a contract of fire insurance is given as collateral security to a mortgage or vendor's lien on property, or where any such contract so given is about to expire and no specific insurer is named in the mortgage or agreement for sale, a term requiring the mortgagor or purchaser to insure is sufficiently satisfied, save as to the amount, by the production by the mortgagor or purchaser of a subsisting policy of insurance in any insurer licensed to carry on its business in the province.

Mortgagee not to receive commission or benefit for making contract under which loss payable to him

(2) A mortgagee shall not accept or be entitled to receive either directly or through his agent or employee, and no officer or employee of such mortgagee shall accept or receive any commission or other remuneration or benefit in consideration of effecting a contract of insurance or renewal thereof under which contract loss, if any, is payable to him as mortgagee.

Insurer not to receive commission for making contracts as mortgagee

(3) No insurer or agent or broker shall pay, allow or give any commission or other remuneration or benefit to a mortgagee or to any person in his employ or on his behalf, in consideration of effecting a contract of insurance or renewal thereof, under which contract loss, if any, is payable to him as mortgagee.

Offence

Assignment of refund of premiums, where notice given by assignee

103. (1) Where an insured assigns the right to refund of premiums which may accrue by reason of the cancellation or termination of a contract of insurance under the terms thereof, and notice of the assignment is given by the assignee to the insurer, the insurer shall pay the refund to the assignee notwithstanding any condition in the contract, whether prescribed under this Act or not, requiring the refund to be paid to the insured or to accompany any notice of cancellation or termination to the insured.

Refund payable with notice of cancellation to assignee, where

CONTRACTS COUNTERSIGNED BY AGENT

Fire insurance, sale of by person with certificate of authority

104. (1) No insurer shall undertake any contract of fire insurance upon property situated in the province or described in any contract as situated therein, unless the contract, completed in accordance with this Act, is signed or countersigned by an agent holding a certificate of authority under this Act, who is to receive the commission or some part thereof when the premium stipulated in the contract is paid.

Exception to signing requirements

(2) If the policy is issued upon an application procured and submitted to the insurer and signed by the agent, it need not be signed or countersigned by him.

Rolling stock of railways not included

(3) This section does not apply to insurance covering the rolling stock of railroad corporations or property in transit which is in the possession and custody of railroad corporations or other common carriers nor to moveable property of common carriers used or employed by them in their business as such.

(4) Any insurer that issues a contract of insurance save as permitted by this section is upon summary conviction liable to a fine of not less than $100 and not more than $300 for each contract so issued.

Application of section

Signing blank policy or contract

105. (1) No agent holding a certificate of authority shall sign a blank policy or contract of insurance.

Counter signing authority given outside province

MISCELLANEOUS

Form of policy or application, filing

106. (1) The Superintendent may require an insurer to file with him a copy of any form of policy or of the form of application for any policy issued or used by the insurer.

Unfair, or fraudulent application, prohibition of use

(2) The Superintendent shall report to the Minister any case where the insurer issues any policy or uses any application which in the opinion of the Superintendent is unfair, fraudulent, or not in the public interest, and after hearing the insurer the Minister may order the Superintendent to prohibit the insurer from issuing or using that form of policy or application.

Continuation of use, offence

Violation of provincial law, effect on contract

Misleading statements by insurer re dividends, profits etc., offence

PART IV

FIRE INSURANCE

Application of Part

109. (1) This Part applies to insurance against loss of or damage to property arising from the peril of fire in any contract made in the province except

(a) insurance falling within the classes of aircraft, automobile, boiler and machinery, inland transportation, marine, plate glass, sprinkler leakage and theft insurance;

(b) where the subject-matter of the insurance is rents, charges or loss of profits;

(c) where the peril of fire is an incidental peril to the coverage provided; or

(d) where the subject matter of the insurance is property that is insured by an insurer or group of insurers primarily as a nuclear risk under a policy covering against loss of or damage to the property resulting from nuclear reaction or nuclear radiation and from other perils.

Application to automobiles

Fire insurance deemed to cover against certain risks

110. (1) Subject to subsection (4) and to clause 117(a), in any contract to which this Part applies, the contract shall be deemed to cover the insured property

(a) against fire (whether resulting from explosion or otherwise) not occasioned by or happening through

(i) in the case of goods, their undergoing any process involving the application of heat,

(ii) riot, civil commotion, war, invasion, act of foreign enemy, hostilities (whether war be declared or not), civil war, rebellion, revolution, insurrection or military power;

(b) against lightning, but excluding destruction or loss to electrical devices or appliances caused by lightning or other electrical currents unless fire originates outside the article itself and only for such destruction or damage as occurs from the fire; and

(c) against explosion (not occasioned by or happening through any of the perils specified in subclause (a)(ii) of natural coal or manufactured gas in a building not forming part of a gas works, whether fire ensues therefrom or not.

Loss from radioactive material

(2) Unless a contract to which this Part applies otherwise specifically provides, it does not cover the insured property against loss or damage caused by contamination by radio-active material directly or indirectly resulting from fire, lightning or explosion within the meaning of subsection (1).

Property covered by insurance removed to prevent loss

(3) Where property insured under a contract covering at a specified location is necessarily removed to prevent loss or damage or further loss or damage thereto, that part of the insurance under the contract that exceeds the amount of the insurer's liability for any loss incurred shall, for seven days only or for the unexpired term of the contract if less than seven days, cover the property removed and any property remaining in the original location in the proportions which the value of the property in each of the respective locations bears to the value of the property in them all.

Extended coverage permitted

(4) Nothing in subsection (1) precludes an insurer giving more extended insurance against the perils mentioned therein, but in that case this Part does not apply to the extended insurance.

Lightning, meaning extended in contract insuring livestock

Renewal procedure

Policy deemed in accordance with terms of application

Loss payable to third party, rights of insurer

113. (1) Where the loss, if any, under a contract has, with the consent of the insurer, been made payable to a person other than the insured, the insurer shall not cancel or alter the policy to the prejudice of that person without notice to him.

Statutory conditions: deemed included in all contracts

114. (1) The conditions set forth in this section shall be deemed to be part of every contract in force in Prince Edward Island and shall be printed on every policy with the heading "Statutory Conditions" and no variation or omission of or addition to any statutory condition shall be binding on the insured.

(2) In this section, "policy" does not include interim receipts or binders.

STATUTORY CONDITIONS

Misrepresentation

1. If any person applying for insurance falsely describes the property to the prejudice of the insurer, or misrepresents or fraudulently omits to communicate any circumstance which is material to be made known to the insurer in order to enable it to judge of the risk to be undertaken, the contract shall be void as to any property in relation to which the misrepresentation or omission is material.

Property of others

2. Unless otherwise specifically stated in the contract, the insurer is not liable for loss or damage to property owned by any person other than the insured, unless the interest of the insured therein is stated in the contract.

Change of interest

3. The insurer shall be liable for loss or damage occurring after an authorized assignment under the Bankruptcy Act (Canada) R.S.C. 1985, Chap. B-3 or change of title by succession, by operation of law, or by death.

Material change

4. Any change material to the risk and within the control and knowledge of the insured shall avoid the contract as to the part affected thereby, unless the change is promptly notified in writing to the insurer or its local agent; and the insurer when so notified may return the unearned portion, if any, of the premium paid and cancel the contract, or may notify the insured in writing that, if he desires the contract to continue in force, he must, within fifteen days of the receipt of the notice, pay to the insurer an additional premium; and in default of such payment the contract shall no longer be in force and the insurer shall return the unearned portion, if any, of the premium paid.

5. (1) This contract may be terminated

(b) by the insured at any time on request.

(b) the refund shall accompany the notice unless the premium is subject to adjustment or determination as to amount, in which case the refund shall be made as soon as practicable.

Termination by insured

(3) Where this contract is terminated by the insured, the insurer shall refund as soon as practicable the excess of premium actually paid by the insured over the short rate premium for the expired time, but, in no event shall the short rate premium for the expired time be deemed to be less than any minimum retained premium specified.

Refund, how payable

(4) The refund may be made by money, postal or express company money order, or by cheque payable at par.

Notice

(5) The fifteen days mentioned in clause (1)(a) of this condition commences to run on the day following the receipt of the registered letter at the post office to which it is addressed.

Requirement after loss

6. (1) Upon the occurrence of any loss of or damage to the insured property, the insured shall, if such loss or damage is covered by the contract, in addition to observing the requirements of Conditions 9, 10 and 11,

(a) forthwith give notice thereof in writing to the insurer;

(b) deliver as soon as practicable to the insurer a proof of loss verified by a statutory declaration

(i) giving a complete inventory of the destroyed and damaged property and showing in detail quantities, costs, actual cash value and particulars of amount of loss claimed,

(ii) stating when and how the loss occurred, and if caused by fire or explosion due to ignition, how the fire or explosion originated, so far as the insured knows or believes,

(iii) stating that the loss did not occur through any wilful act or neglect or the procurement, means or connivance of the insured,

(iv) showing the amount of other insurances and the names of other insurers,

(v) showing the interest of the insured and of all others in the property with particulars of all liens, encumbrances and other charges upon the property,

(vi) showing any change in title, use, occupation, location, possession or exposures of the property since the issue of the contract,

(vii) showing the place where the property insured was at the time of loss;

(c) if required, give a complete inventory of undamaged property and showing in detail quantities, cost, actual cash value;

(d) if required and if practicable, produce books of account, warehouse receipts and stock lists, and furnish invoices and other vouchers verified by statutory declaration, and furnish a copy of the written portion of any other contract.

(2) The evidence furnished under clauses (1)(c) and (d) of this Condition shall not be considered proofs of loss within the meaning of Conditions 12 and 13.

Fraud or wilfully false statement

7. Any fraud or wilfully false statement in a statutory declaration in relation to any of the above particulars, shall vitiate the claim of the person making the declaration.

Who may give notice and proof

8. Notice of loss may be given, and proof of loss may be made, by the agent of the insured named in the contract in case of absence or inability of the insured to give the notice or make the proof, and absence or inability being satisfactorily accounted for, or in the like case, or if the insured refuses to do so, by a person to whom any part of the insurance money is payable.

Salvage

9. (1) The insured, in the event of any loss or damage to any property insured under the contract, shall take all reasonable steps to prevent further damage to any such property so damaged and to prevent damage to other property insured hereunder including, if necessary, its removal to prevent damage or further damage thereto.

Contribution by insurer

(2) The insurer shall contribute in proportion towards any reasonable and proper expenses in connection with steps taken by the insured and required under subsection (1) of this condition according to the respective interests of the parties.

Entry, control, abandonment

10. After any loss or damage to insured property, the insurer has an immediate right of access and entry by accredited agents sufficient to enable them to survey and examine the property, and to make an estimate of the loss or damage, and after the insured has secured the property, a further right of access and entry sufficient to enable them to make appraisement or particular estimate of the loss or damage, but the insurer is not entitled to the control or possession of the insured property, and without the consent of the insurer there can be no abandonment to it of insured property.

Appraisal

11. In the event of disagreement as to the value of the property insured, the property saved or the amount of the loss, those questions shall be determined by appraisal as provided under this Act before there can be any recovery under this contract whether the right to recover on the contract is disputed or not, and independently of all other questions; there shall be no right to an appraisal until a specific demand therefor is made in writing and until after proof of loss has been delivered.

When loss payable

12. The loss shall be payable within sixty days after completion of the proof of loss, unless the contract provides for a shorter period.

Replacement

13. (1) The insurer, instead of making payment, may repair, rebuild, or replace the property damaged or lost, giving written notice of its intention so to do within thirty days after receipt of the proofs of loss.

Commencement of repair

(2) In that event, the insurer shall commence to so repair, rebuild, or replace the property within forty-five days after receipt of the proofs of loss, and shall thereafter proceed with all due diligence to the completion thereof.

Limitation of action

14. Every action or proceeding against the insurer for the recovery of any claim under or by virtue of this contract shall be absolutely barred unless commenced within one year next after the loss or damage occurs.

Notice, delivery

15. (1) Any written notice to the insurer may be delivered at, or sent by registered mail to, the chief agency or head office of the insurer in the province; written notice may be given to the insured named in this contract by letter personally delivered to him or by registered mail addressed to him at his latest known post office address as notified to the insurer.

Registered, defined

(a) a deductible clause;

(b) a co-insurance, average or similar clause; or

Payment of loss where more than one insurer

116. (1) Where, on the happening of any loss or damage to property insured, there is in force more than one contract covering the same interest, the insurers under the respective contracts are each liable to the insured for its rateable proportion of the loss unless it is otherwise expressly agreed in writing between the insurers.

Policy deemed in force

(2) For the purpose of subsection (1), a contract shall be deemed to be in force notwithstanding any term thereof that the policy shall not cover, come into force, attach, or become insurance with respect to the property until after full or partial payment of any loss under any other policy.

Provisions not affected by subsection (1)

(3) Nothing in subsection (1) affects the validity of any divisions of the sum insured into separate items, or any limits of insurance on specified property, or any clause referred to in section 115 or any contract condition limiting or prohibiting the having or placing of other insurance.

Deductible changes not affected

(4) Nothing in subsection (1) affects the operation of any deductible clause and

(a) where one contract contains a deductible, the proportion of the insurer under that contract shall be first ascertained without regard to the clause and then the clause shall be applied only to affect the amount of recovery under that contract; and

(b) where more than one contract contains a deductible, the proportion of the insurers under those contracts shall be first ascertained without regard to the deductible clauses and then the highest deductible shall be pro rated among the insurers with deductibles and these pro rated amounts shall affect the amount of recovery under those contracts.

(5) Nothing in subsection (4) shall be construed to have the effect of increasing the proportional contribution of an insurer under a contract that is not subject to a deductible clause.

Insurance on identified articles

(a) excludes any loss that would otherwise fall within the coverage prescribed by section 110; or

Indemnity incomplete, insured and insurer share difference, where

PART V

LIFE INSURANCE

INTERPRETATION

(a) "application" means an application for insurance or for the reinstatement of insurance;

beneficiary

(b) "beneficiary" means a person, other than the insured or his personal representative, to whom or for whose benefit insurance money is made payable in a contract or by a declaration;

 child

creditor's group insurance

(f) "creditor's group insurance" means insurance effected by a creditor in respect of the lives of his debtors whereby the lives of the debtors are insured severally under a single contract;

(i) with respect to which an endorsement is made on the policy,

(ii) that identifies the contract, or

(iii) that describes the insurance or insurance fund or a part thereof,

in which he designates, or alters or revokes, the designation of his personal representative or a beneficiary as one to whom or for whose benefit insurance money is to be payable;

family insurance

(h) "family insurance" means insurance whereby the lives of the insured and one or more persons related to him by blood, marriage or adoption are insured under a single contract between an insurer and the insured;

group life insured

(j) "group life insurance" means a person whose life is insured by a contract of group insurance but does not include a person whose life is insured under the contract as a person dependent upon, or related to, him;

insurance money

(m) "insurance money" includes all insurance money, benefits, surplus, profits, dividends, bonuses and annuities payable by an insurer under a contract of insurance;

(n) "insured"

(i) in the case of group insurance means, in the provisions of this Part relating to the designation of beneficiaries and the rights and status of beneficiaries, the group life insured, and

APPLICATION OF PART

Application of Part

120. (1) Notwithstanding any agreement, condition or stipulation to the contrary, this Part applies to a contract made in the province on or after July 1, 1962 and, subject to subsections (2) and (3) applies to a contract made in the province before that day.

Previous contracts

(2) The rights and interests of a beneficiary for value under a contract that was in force immediately prior to July 1, 1962 are those provided in Part V of this Act then in force.

Preferred beneficiary

(3) Where the person who would have been entitled to the payment of insurance money if the money had become payable immediately prior to the first day of July 1962 was a preferred beneficiary within the meaning of Part V of this Act then in force, the insured may not, except in accordance with that Part,

(b) assign, exercise rights under or in respect of, surrender or otherwise deal with the contract,

(a) the rights and status of beneficiaries if the group life insured was resident in the province at the time he became insured; and

ISSUANCE OF POLICY AND CONTENTS THEREOF

(b) the policy;

(c) any document attached to the policy when issued; and

(d) any amendment to the contract agreed upon in writing after the policy is issued,

constitute the entire contract.

Fraternal society contracts, what constitutes

(3) In the case of a contract made by a fraternal society, the policy, the Act or instrument of incorporation of the society, its constitution, bylaws and rules, and the amendments made from time to time to any of them, the application for the contract and the medical statement of the applicant constitute the entire contract.

Copy of application

(b) of creditor's group insurance; or

(c) made by a fraternal society.

Particulars to be set forth in policy

(2) An insurer shall set forth the following particulars in the policy:

(b) the amount, or the method of determining the amount, of the insurance money payable, and the conditions under which it becomes payable;

(c) the amount, or the method of determining the amount, of the premium and the period of grace, if any, within which it may be paid;

(d) whether the contract provides for participation in a distribution of surplus or profits that may be declared by the insurer;

(e) the conditions upon which the contract may be reinstated if it lapses;

(f) the options, if any,

(i) of surrendering the contract for cash,

(ii) of obtaining a loan or an advance payment of the insurance money, and

Particulars of group insurance policy or creditor's group insurance, to be set forth in policy

124. In the case of a contract of group insurance or of creditor's group insurance, an insurer shall set forth the following particulars in the policy:

(b) the method of determining the persons whose lives are insured;

(c) the amount, or the method of determining the amount, of the insurance money payable, and the conditions under which it becomes payable;

(d) the period of grace, if any, within which the premium may be paid;

(e) whether the contract provides for participation in a distribution of surplus or profits that may be declared by the insurer. R.S.P.E.I. 1974, Cap. I-5, s.123.

Certificate for group life insured, contains certain particulars

125. In the case of a contract of group insurance, an insurer shall issue, for delivery by the insured to each group life insured, a certificate or other document in which are set forth the following particulars:

(b) the amount, or the method of determining the amount, of insurance on the group life insured and on any person whose life is insured under the contract as a person dependent upon, or related to, him;

CONDITIONS GOVERNING FORMATION OF CONTRACT

No insurable interest, contract void

126. (1) Subject to subsection (2), where at the time a contract would otherwise take effect, the insured has no insurable interest, the contract is void.

(a) if it is a contract group insurance; or

(b) if the person whose life is insured has consented in writing to the insurance being placed on his life.

Insured under 16

Insurable interest includes

127. Without restricting the meaning of the expression "insurable interest", a person has an insurable interest in his own life and in the life of

(a) his child or grandchild;

(b) his spouse;

(c) any person upon whom he is wholly or in part dependent for, or from whom he is receiving support or education;

(d) his employee; and

(e) any person in the duration of whose life he has a pecuniary interest. R.S.P.E.I. 1974, Cap. I-5, s.126.

Contract, when to take effect

128. (1) Subject to any provision to the contrary in the application or the policy, a contract does not take effect unless

(a) the policy is delivered to an insured, his assign or agent, or to a beneficiary;

(b) payment of the first premium is made to the insurer or its authorized agent; and

(c) no change has taken place in the insurability of the life to be insured between the time the application was completed and the time the policy was delivered.

Delivery of policy

When premium paid

129. (1) Where a cheque or other bill of exchange, or a promissory note or other written promise to pay, is given for the whole or part of a premium and payment is not made according to its tenor, the premium or part thereof shall be deemed not to have been paid.

Receipt of premium

Premium, who may pay

130. (1) Except in the case of group insurance, an assignee of a contract, a beneficiary or a person acting on behalf of one of them or of the insured may pay any premium that the insured is entitled to pay.

(2) Where a premium, other than the initial premium, is not paid at the time it is due, the premium may be paid within a period of grace of

(a) thirty days, or in the case of an industrial contract twenty-eight days, from and excluding the day on which the premium is due; or

(b) the number of days, if any, specified in the contract for premium of an overdue premium,

Contracts deemed to be in force during period of grace

Disclosure and misrepresentation by insured

131. (1) An applicant for insurance and a person whose life is to be insured shall each disclose to the insurer in the application, on a medical examination, if any, and in any written statements or answers furnished as evidence of insurability, every fact within his knowledge that is material to the insurance and is not so disclosed by the other.

Failure to disclose, contract voidable

Application of section

132. (1) This section does not apply to a misstatement of age or to disability insurance.

Contract not voidable by misrepresentation, where

(2) Subject to subsection (3), where a contract has been in effect for two years during the lifetime of the person whose life is insured, a failure to disclose, or a misrepresentation of, a fact required to be disclosed by section 131 does not, in the absence of fraud, render the contract voidable.

Group insurance, effect of failure to disclose or misrepresentation

Disclosure and misrepresentation by insurer

Application of section

134. (1) This section does not apply to a contract of group insurance or of creditor's group insurance.

Misstatement of age

(2) Subject to subsection (3), where the age of a person whose life is insured is misstated to the insurer, the insurance money provided by the contract shall be increased or decreased to the amount that would have been provided for the same premium at the correct age.

Where insurable age expressly limited

Misstatement of group insurance

Suicide, effect of on contract

136. (1) Where a contract contains an undertaking, express or implied, that insurance money will be paid if a person whose life is insured commits suicide, the undertaking is lawful and enforceable.

Application of section

137. (1) This section does not apply to a contract of group insurance or o a contract made by a fraternal society.

Reinstatement of contract

(2) Where a contract lapses and the insured within two years applies for reinstatement of the contract, if within that time he

(a) pays the overdue premiums and other indebtedness under the contract to the insurer, together with interest at the rate specified in the contract, but not exceeding six per cent per year, compounded annually; and

(b) produces

(i) evidence satisfactory to the insurer of the good health, and

(ii) other evidence satisfactory to the insurer of the insurability,

Application of section

(3) Subsection (2) does not apply where the cash surrender value has been paid or an option of taking paid up or extended insurance has been exercised.

Sections apply

DESIGNATION OF BENEFICIARIES

Designation in contract

138. (1) An insured may in a contract or by a declaration designate his personal representative or a beneficiary to receive insurance money.

Irrevocable designation of beneficiary

139. (1) An insured may in a contract or by a declaration, other than a declaration that is part of a will, filed with the insurer at its head or principal office in Canada during the lifetime of the person whose life is insured, designate a beneficiary irrevocably and in that event the insured, while the beneficiary is living, may not alter or revoke the designation without the consent of the beneficiary and the insurance money is not subject to the control of the insured or of his creditors and does not form part of his estate.

Declaration not filed, effect of designation

Designation under invalid will or valid will

140. (1) A designation in an instrument purporting to be a will is not ineffective by reason only of the fact that the instrument is invalid as a will, or that the designation is invalid as a bequest under the will.

(2) Notwithstanding the Probate Act R.S.P.E.I. 1988, Cap. P-21, a designation in a will is of no effect against a designation made later than the making of the will.

Revocation of designation

141. (1) An insured may in a contract or by a declaration appoint a trustee for a beneficiary and may alter or revoke the appointment by a declaration.

Payment by insurer to trustee

Payment of share where beneficiary predeceases insured

142. (1) Where a beneficiary predeceases the person whose life is insured, and no disposition of the share of the deceased beneficiary in the insurance money is provided in the contract or by a declaration, the share is payable

(a) to the surviving beneficiary;

(b) if there is more than one surviving beneficiary, to the surviving beneficiaries in equal shares; or

(c) if there is no surviving beneficiary, to the insured or his personal representative.

Beneficiary and trustee may enforce payment of insurance money

144. (1) Where a beneficiary is designated, the insurance money, from the time of the happening of the event upon which the insurance money becomes payable, is not part of the estate of the insured and is not subject to the claims of the creditors of the insured.

Dealings with contract during lifetime of insured

Insured entitled to deal with bonuses etc.

146. (1) Notwithstanding the designation of a beneficiary irrevocably, the insured is entitled while living to the dividends or bonuses declared on a contract, unless the contract otherwise provides.

Application of dividends and bonuses to keep contract alive

When rights and interest of insured not to form part of his estate

147. (1) Notwithstanding the Probate Act, where in a contract or in an agreement in writing between an insurer and an insured it is provided that a person named in the contract or in the agreement has, upon the death of the insured, the rights and interests of the insured in the contract,

(a) the rights and interests of the insured in the contract do not, upon the death of the insured, form part of his estate; and

(b) upon the death of the insured, the person named in the contract or in the agreement has the rights and interests given to the insured by the contract and by this Part and shall be deemed to be the insured.

Application of  to successive interest

(2) Where the contract or agreement provides that two or more persons named in the contract or in the agreement shall, upon the death of the insured, have successively on the death of each of them, the rights and interests of the insured in the contract, this section applies successively, with the necessary changes, to each of such persons and to his rights and interests in the contract.

Nomination effect of

Priority of interest of assignee

148. (1) Where an assignee of a contract gives notice in writing of the assignment to the insurer at its head or principal office in Canada, he has priority of interest as against

(a) any assignee other than one who gave notice earlier in like manner; and

(b) a beneficiary other than one designated irrevocably as provided in section 139 prior to the time the assignee gave notice to the insurer of the assignment in the manner prescribed in this subsection.

Assignment as security

(2) Where a contract is assigned as security, the rights of a beneficiary under the contract are affected only to the extent necessary to give effect to the rights and interests of the assignee.

Absolute assignment

(3) Where a contract is assigned unconditionally and otherwise than as security the assignee has all the rights and interests given to the insured by the contract and by this Part and shall be deemed to be the insured.

Provision that right not assignable valid

Enforcement by group life insured

MINORS

Capacity of minors to make contract

150. Except in respect of his rights as beneficiary, a minor who has attained the age of sixteen years has the capacity of a person of the age of eighteen years

(a) to make an enforceable contract; and

PROCEEDINGS UNDER CONTRACT

(b) the age of the person whose life is insured;

(c) the right of the claimant to receive payment; and

(d) the name and age of the beneficiary, if there is a beneficiary,

Payable in province

152. (1) Subject to subsection 153(2), insurance money is payable in the province.

 Payable to person by law of domicile

In case of group life insured

Where action to be brought

Time when action to commence

155. (1) Subject to subsection (2), an action or proceeding against an insurer for the recovery of insurance money shall not be commenced more than one year after the furnishing of the evidence required by section 151, or more than six years after the happening of the event upon which the insurance money becomes payable, whichever period first expires.

Limitation of action

Payment of insurance money prior to court order

156. (1) Until an insurer receives at its head or principal office in Canada an instrument or an order of a court affecting the right to receive insurance money, or a notarial copy or a copy verified by statutory declaration, of any such instrument or order, it may make payment of the insurance money and shall be as fully discharged to the extent of the amount paid as if there were no such instrument or order.

Application of section

Application for declaration of court

Application to court of declaration as to presumption of death

Order of court respecting payment of insurance money

159. (1) Upon making a declaration under section 157 or section 158, the court may make such order respecting the payment of the insurance money and respecting costs as it considers just and, subject to section 161, a declaration or direction or order made under this subsection is binding upon the applicant and upon all persons to whom notice of the application has been given.

Discharge of insurer

Stay of pending action

Appeal

Court may order an action

Application to court by insured where adverse claimants etc.

163. Where an insurer admits liability for insurance money and it appears to the insurer that

(b) the whereabouts of a person entitled is unknown; or

(c) there is no person capable of giving and authorized to give a valid discharge therefor, who is willing to do so,

Uncertainty of survival, moneys payable beneficiary

Dealing with insurance money payable in instalments

165. (1) Subject to subsections (2) and (3), where insurance money is payable in instalments and a contract, or an instrument signed by the insured and delivered to the insurer, provides that a beneficiary has not the right to commute the instalments or to alienate or assign his interest therein, the insurer shall not, unless the insured subsequently directs otherwise in writing, commute the instalments or pay them to any person other than the beneficiary, and the instalments are not, in the hands of the insurer, subject to any legal process except an action to recover the value of necessaries supplied to the beneficiary or his infant children.

Exceptions

(2) A court may, upon the application of a beneficiary and upon at least ten days notice, declare that in view of special circumstances

(a) the insurer may, with the consent of the beneficiary, commute instalments of insurance money; or

(b) the beneficiary may alienate or assign his interest in the insurance money.

Commutation of instalments

(3) After the death of the beneficiary, his personal representative may, with the consent of the insurer, commute any instalments of insurance money payable to the beneficiary.

Instalments, defined

(a) subject to the order of an insured or a beneficiary; or

(b) upon trusts or other agreements for the benefit of the insured or the beneficiary,

as provided in the contract, by an agreement in writing to which it is a party, or by a declaration, with interest at a rate agreed upon therein or, where no rate is agreed upon, at the rate declared by the insurer in respect of insurance money so held by it.

Insurer not bound to hold moneys if not agreed

Order of court where insurer does not pay moneys when required

Costs fixed by court

Payment by insurer into court

169. (1) Where an insurer admits liability for insurance money payable to a minor and there is no person capable of giving, and authorized to give, a discharge thereof, who is willing to do so, the insurer may at any time after thirty days from the date of the happening of the event upon which the insurance money becomes payable pay the money, less the applicable costs mentioned in subsection (2), into court to the credit of the minor.

(2) The insurer may retain out of the insurance money for costs incurred upon payment into court under subsection (1) the sum of $10 where the amount does not exceed $1,000, and the sum of $15 in other cases, and payment of the remainder of the money into court discharges the insurer.

Filing affidavit with Prothonotary

Where representative may accept payment

MISCELLANEOUS PROVISIONS

No officer of insurer an agent for insured

Insurer giving or withholding information

Interpretation of Part

PART VI

ACCIDENT AND SICKNESS INSURANCE

application

(a) "application" means a written application for insurance or for the reinstatement of insurance;

beneficiary

(b) "beneficiary" means a person designated or appointed in a contract or by a declaration, other than the insured or his personal representative, to whom or for whose benefit insurance money payable in the event of death by accident is to be paid;

blanket insurance

(c) "blanket insurance" means that class of group insurance which covers loss arising from specific hazards incident to or defined by reference to a particular activity or activities;

court

(e) "court" means the Supreme Court of the Province of Prince Edward Island;

creditor's group insurance

(f) "creditor's group insurance" means insurance effected by a creditor whereby the lives or well-being, or the lives and well-being, of a number of his debtors are insured severally under a single contract;

(i) with respect to which an endorsement is made on the policy,

(ii) that identifies the contract, or

(iii) that describes the insurance or insurance fund or a partthereof,

in which he designates or alters or revokes the designation of his personal representative or a beneficiary as one to whom or for whose benefit shall be paid the insurance money which is payable in the event of death by accident;

family insurance

(h) "family insurance" means insurance whereby the lives or wellbeing, or the lives and well-being, of the insured and one or more persons related to him by blood, marriage or adoption are insured under a single contract between an insurer and the insured;

group insurance

(i) "group insurance" means insurance other than creditor's group insurance and family insurance, whereby the lives or well-being, or the lives and well-being of a number of persons are insured severally under a single contract between an insurer and an employer or other person;

group person insured

(j) "group person insured" means a person who is insured under a contract of group insurance and upon whom a right is conferred by the contract, but does not include a person who is insured thereunderas a person dependent upon or related to him;

insurance

(l) "insurance" means accident insurance, sickness insurance, or accident insurance and sickness insurance;

(m) "insured"

(i) in the case of group insurance means, in the provisions of this Part relating to the designation of beneficiaries or of personal  representatives as recipients of insurance money and their rightsand status, the group person insured, and

(ii) in all other cases means the person who makes a contract with an insurer;

person insured

(n) "person insured" means a person in respect of an accident to whom, or in respect of whose sickness, insurance money is payable under a contract, but does not include a group person insured;

Act to prevail

175. (1) Notwithstanding any agreement, condition or stipulation to the contrary, this Part applies to a contract made in the province on and after October 1, 1970 and sections 174, 175, 176, 177, 185, 188, 189, 190, 194 and sections 196 to 212 apply also to a contract made in the province before that day.

Former statutory provisions apply to certain contracts

(2) Sections 177, 178, 187, 188, 190, 197 and 200 of Part VI of the Act in force immediately prior to October 1,1970 apply to a contract made in the province before that day.

Exemptions

(3) This Part does not apply to

(a) accidental death insurance;

(b) creditor's group insurance;

(c) disability insurance; or

(d) insurance provided under section 245, 246, or 247. R.S.P.E.I. 1974, Cap. I-5, s.174.

Group insurance

176. In the case of a contract of group insurance made with an insurer authorized to transact insurance in the province at the time the contract was made, this Part applies in determining

(a) the rights and status of beneficiaries and personal representatives as recipients of insurance money, if the group person insured was resident in the province at the time he became insured; and

Policy to be issued

(b) a contract made by a fraternal society.

(2) An insurer shall set forth the following particulars in the policy:

(a) the name or a sufficient description of the insured and of the person insured;

(b) the amount or the method of determining the amount of the insurance money payable and the conditions under which it becomes payable;

(c) the amount or the method of determining the amount of the premium and the period of grace, if any, within which it may be paid;

(d) the conditions upon which the contract may be reinstated if it lapses;

Group insurance, contents of policy

179. In the case of a contract of group insurance, an insurer shall set forth the following particulars in the policy:

(a) the name or a sufficient description of the insured;

(b) the method of determining the group persons insured and persons insured;

(c) the amount or the method of determining the amount of the insurance money payable and the conditions under which it becomes payable;

(d) the period of grace, if any, within which the premium may be paid;

180. (1) In this section

(a) "original maximum benefit period" means, in relation to a contract of group insurance, the maximum period provided under that contract for the payment of any benefit payable thereunder in respect of loss of income;

(b) "prescribed time period" means, in relation to a contract of group insurance, a continuous period of six months following the termination of the contract or a benefit provision therein or such longer continuous period as may be provided in that contract instead of that six month period.

Termination of contract of group insurance, continuation of insurer's liability

(2) Where a contract of group insurance or a benefit provision therein is terminated, the insurer continues, as though the contract or benefit provision had remained in full force and effect, to be liable, to or in respect of any group person insured under the contract, to pay benefits thereunder relating to

(a) loss of income because of disability;

(b) death;

(c) dismemberment; or

(d) accidental damage to natural teeth,

arising from an accident or sickness that occurred before the termination of the contract or benefit provision, if the disability, death, dismemberment or accidental damage to natural teeth is reported to the insurer within the prescribed time period.

No liability for recurrence of disability

(3) Notwithstanding subsection (2), an insurer does not remain liable, under a contract or benefit provision described in that subsection, to pay a benefit for loss of income for the recurrence, after the termination of that contract or benefit provision, of a disability that recurs after a continuous period of six months, or such longer period as is provided in the contract, during which the group person insured was not disabled.

Period for which benefits for loss of income payable

(4) An insurer who is liable under subsection (2) to pay a benefit for loss of income on account of the disability of a group person insured is not liable to pay benefits for any period longer than the period remaining of the original maximum benefit period in respect of the disability of the group person insured.

Replacement contracts

(5) Where a contract of group insurance (in this section referred to as the "replacing contract") is entered into within thirty-one days of the termination of another contract of group insurance (in this section referred to as the "other contract") and insures the same group or a part of the group insured under the other contract

(a) the replacing contract shall provide or shall be deemed to provide that any person who was insured under the other contract at the time of its termination is insured under the replacing contract from and after the termination of the other contract if

(i) the insurance on that person under the other contract terminated solely by reason of the termination of the other contract, and

(ii) the person is a member of a class eligible for insurance under the replacing contract;

(b) every person who was insured under the other contract and who is insured under the replacing contract is entitled to receive credit form satisfaction of any deductible earned before the effective date of the replacing contract; and

(c) no person who was insured under the other contract shall be excluded from eligibility under the replacing contract solely because of not being actively at work on the effective date of the replacing contract,

Group insurance, certificate, contents

181. (1) Except as provided in subsection (2), in the case of a contract of group insurance an insurer shall issue for delivery by the insured to each group person insured, a certificate or other document in which are set forth the following particulars:

(a) the name of the insurer and a sufficient identification of the contract;

(b) the amount or the method of determining the amount of insurance on the group person insured and on any person insured;

(c) the circumstances under which the insurance terminates, and the rights, if any, upon such termination of the group person insured and of any person insured.

Application of section

Exception or reduction

182. (1) Subject to section 183 and except as otherwise provided in this section, the insurer shall set forth in the policy every exception or reduction affecting the amount payable under the contract, either in the provision affected by the exception or reduction, or under a heading such as "Exceptions" or "Reductions".

Exception etc., in one provision only, location

(2) Where the exception or reduction affects only one provision in the policy it shall be set forth in that provision.

Exception etc., in endorsement

(3) Where the exception or reduction is contained in an endorsement, insertion or rider, the endorsement, insertion or rider shall, unless it affects all amounts payable under the contract, make reference to the provisions in the policy affected by the exemption or reduction.

Certain exception not to be set forth

(4) The exception or reduction mentioned in section 194 need not be set forth in the policy.

Application of section

Statutory conditions to be set forth in or attached to policy

183. Subject to section 184 the conditions set forth in this section shall be deemed to be part of every contract other than a contract of group insurance, and shall be printed on or attached to the policy forming part of such contract with the heading "Statutory Conditions".

STATUTORY CONDITIONS

Contract

1. (1) The application, this policy, any document attached to this policy when issued, and any amendment to the contract agreed upon in writing after the policy is issued, constitute the entire contract, and no agent has authority to change the contract or waive any of its provisions.

Waiver

(2) The insurer shall be deemed not to have waived any condition of this contract, either in whole or in part, unless the waiver is clearly expressed in writing signed by the insurer.

(3) The insurer shall, upon request, furnish to the insured or to a claimant under the contract a copy of the application.

Material facts

2. No statement made by the insured or person insured at the time of application for this contract shall be used in defence of a claim under or to avoid this contract unless it is contained in the application or any other written statements or answers furnished as evidence of insurability.

Changes in occupation

3. (1) If after the contract is issued the person insured engages for compensation in an occupation that is classified by the insurer as more hazardous than that stated in this contract, the liability under this contract is limited to the amount that the premium paid would have purchased for the more hazardous occupation according to the limits, classification of risks and premium rates in use by the insurer at the time the person insured engaged in the more hazardous occupation.

Change of occupation

(2) If the person insured changes his occupation from that stated in this contract to an occupation classified by the insurer as less hazardous and the insurer is so advised in writing, the insurer shall either

(a) reduce the premium rate; or

(b) issue a policy for the unexpired term of this contract at the lower rate of premium applicable to the less hazardous occupation, according to the limits, classification of risks, and premium rates used by the insurer at the date of receipt of advice of the change in occupation, and shall refund to the insured the amount by which the unearned premium on this contract exceeds the premium at the lower rate for the unexpired term.

Relation of earnings to insurance

4. Where the benefits for loss of time payable hereunder, either alone or together with benefits for loss of time under another contract, including a contract of group accident insurance or group sickness insurance or of both and a life insurance contract providing disability insurance, exceed the money value of the time of the person insured, the insurer is liable only for that proportion of the benefits for loss of time stated in this policy that the money value of the time of the person insured bears to the aggregate of the benefits for loss of time payable under all such contracts and the excess premium, if any, paid by the insured shall be returned to him by the insurer.

Termination by insured

5. The insured may terminate this contract at any time by giving written notice of termination to the insurer by registered mail to its head office or chief agency in the province, or by delivery thereof to an authorized agent of the insurer in the province, and the insurer shall upon surrender of this policy refund the amount of premium paid in excess of the short rate premium calculated to the date of receipt of such notice according to the table in use by the insurer at the time of termination.

Termination by insurer

6. (1) The insurer may terminate this contract at any time by giving written notice of termination to the insured and by refunding concurrently with the giving of notice the amount of premium paid in excess of the proportional premium for the expired time.

Notice of termination, delivery

(2) The notice of termination may be delivered to the insured, or it may be sent by registered mail to the latest address of the insured on the records of the insurer.

Periods of notice

(3) Where the notice of termination is delivered to the insured, five days notice of termination shall be given; where it is mailed to the insured, ten days notice of termination shall be given, and the ten days shall begin on the day following the date of mailing of notice.

(i) by delivery thereof, or by sending it by registered mail to the head office or chief agency of the insurer in the province, or

(ii) by delivery thereof to an authorized agent of the insurer in the province,

not later than thirty days from the date a claim arises under the contract on account of an accident, sickness or disability;

(b) within ninety days from the date a claim arises under the contract on account of an accident, sickness or disability furnish to the insurer such proof as is reasonably possible in the circumstances of the happening of the accident or the commencement of the sickness or disability, and the loss occasioned thereby, the right of the claimant to receive payment, his age and the age of the beneficiary if relevant; and

(c) if so required by the insurer, furnish a satisfactory certificate as to the cause or nature of the accident, sickness or disability for which claim may be made under the contract and as to the duration of such disability.

Failure to give notice of proof

(2) Failure to give notice of claim or furnish proof of claim within the time prescribed by this statutory condition does not invalidate the claim if the notice or proof is given or furnished as soon as reasonably possible, and in no event later than one year from the date of the accident or the date a claim arises under the contract on account of sickness or disability if it is shown that it was not reasonably possible to give notice or furnish proof within the time so prescribed.

Insurer to furnish forms for proof of claim

8. The insurer shall furnish forms for proof of claim within fifteen days after receiving notice of claim but where the claimant has not received the forms within that time, he may submit his proof of claim in the form of a written statement of the cause or nature of the accident, sickness or disability giving rise to the claim and of the extent of the loss.

9. As a condition precedent to recovery of insurance moneys under this contract

(b) in the case of death of the person insured, the insurer may require an autopsy subject to any law of the applicable jurisdiction relating to autopsies.

When moneys payable

10. All moneys payable under this contract, other than benefits for loss of time, shall be paid by the insurer within sixty days after it has received proof of claim.

When loss of time benefits payable

11. The initial benefits for loss of time shall be paid by the insurer within thirty days after it has received proof of claim, and payment shall be made thereafter in accordance with the terms of the contract but not less frequently than once in each succeeding sixty days while the insurer remains liable for the payments if the person insured when required to do so furnishes before payment proof of continuing disability.

Limitation of actions

Statutory conditions, omission or variation

184. (1) Where a statutory condition is not applicable to the benefits provided by the contract it may be omitted from the policy or varied so that it will be applicable.

(2) Statutory conditions 3, 4, and 9 may be omitted from the policy if the contract does not contain any provisions respecting the matters dealt with therein.

Omission of statutory conditions 5 and 6

(3) Statutory conditions 5 and 6 shall be omitted from the policy if the contract does not provide that it may be terminated by the insurer prior to the expiry of any period for which a premium has been accepted.

Variation of statutory conditions 3, 4, 5, 6 & 9

(4) Statutory conditions 3, 4, 5, 6 and 9, and subject to the restriction in subsection (5), statutory condition 7, may be varied but if by reason of the variation the contract is less favourable to the insured, a person insured or a beneficiary than it would be if the condition had not been varied, the condition shall be deemed to be included in the policy in the form in which it appears in section 183.

Benefits for loss of time

(5) Statutory conditions 7(1)(a) and (b) may not be varied in policies providing benefits for loss of time.

Shortening periods of time in statutory conditions 10 & 11

(6) Statutory conditions 10 and 11 may be varied by shortening the periods of time prescribed therein, and statutory condition 12 may be varied by lengthening the period of time prescribed therein.

Title of statutory condition, reproduced in policy

(7) The title of a statutory condition shall be reproduced in the policy along with the statutory condition, but the number of a statutory condition may be omitted.

(8) In the case of a contract made by a fraternal society

1. (1) This policy, the Act or instrument of incorporation of the society, its constitution, bylaws and rules, and the amendments made from time to time to any of them, the application for the contract and the medical statement of the applicant, constitute the entire contract, and no agent has authority to change the contract, or waive any of its provisions; and

Accident insurance policy, statutory conditions not printed where notice given

185. In the case of a policy of accident insurance of a non-renewable type issued for a term of six months or less or in relation to a ticket of travel, the statutory conditions need not be printed on or attached to the policy if the policy contains the following notice printed in conspicuous type:

Premium not fully paid but policy delivered

186. (1) Where a policy evidencing a contract or a certificate evidencing the renewal of a contract is delivered to the insured and the initial premium or in the case of a renewal certificate the renewal premium therefor has not been fully paid,

(a) the contract or the renewal thereof evidenced by the certificate is as binding on the insurer as if such premium had been paid although delivered by an officer or an agent of the insurer who did not have authority to deliver it; and

(b) the contract may be terminated for the non-payment of the premium by the insurer upon ten days notice of termination given in writing to the insured and mailed postage prepaid and registered to the latest address of the insured on the records of the insurer and the ten days shall begin on the day following the date of mailing such notice.

Application of section

(b) sue the insured for unpaid premiums.

Cheque etc. given but payment not honoured

(2) Where a cheque or other bill of exchange or a promissory note or other written promise to pay is given for the whole or part of a premium and payment is not made according to its tenor the premium or part thereof shall be deemed never to have been paid.

Insurable interest, includes

188. Without restricting the meaning of the expression "insurable interest", a person has an insurable interest in his own life and well-being and in the life and well-being of

(a) his child or grandchild;

(b) his spouse;

(c) any person upon whom he is wholly or in part dependent for, or from whom he is receiving, support or education;

(d) his officer or employee; and

No insurable interest, contract void

189. (1) Subject to subsection (2), where at the time a contract would otherwise take effect, the insured has no insurable interest, the contract is void.

(a) if it is a contract of group insurance; or

(b) if the person insured has consented in writing to the insurance.

Insured under 16, consent given by

Capacity, age of for making valid contracts

190. Except in respect of his rights as beneficiary, a minor who has attained the age of sixteen years has the capacity of a person of the age of eighteen years

(a) to make an enforceable contract; and

MISREPRESENTATION AND NON-DISCLOSURE

Disclosure by applicant

191. (1) An applicant for insurance on his own behalf and on behalf of each person to be insured shall disclose to the insurer in any application, on a medical examination, if any, and in any written statements or answers furnished as evidence of insurability, every fact within his knowledge that is material to the insurance and is not so disclosed by the other.

Voidable contract if misrepresentation

(2) Subject to sections 192 and 195, a failure to disclose, or a misrepresentation of, such a fact renders a contract voidable by the insurer.

(b) where a contract of group insurance, including renewals thereof, has been in effect continuously for two years with respect to a group person insured or a person insured, a failure to disclose or a misrepresentation of a fact with respect to that group person insured or person insured required by section 191 to be disclosed does not, except in the case of fraud, render the contract voidable with respect to that group person insured or person insured.

Application of section

Reinstatement of contract, ss. 191 & 192 apply to

General exception or reduction for pre-existing disease

194. Where a contract contains a general exception or reduction with respect to pre-existing disease or physical conditions and the person insured or group person insured suffers or has suffered from a disease or physical condition that existed before the date the contract came into force with respect to that person and the disease or physical condition is not by name or specific description excluded from the insurance respecting that person,

(a) the prior existence of the disease or physical condition is not, except in the case of fraud, available as a defence against liability in whole or in part for a loss incurred or a disability beginning after the contract, including renewals thereof, has been in force continuously for two years immediately prior to the date of loss incurred or commencement of disability with respect to that person; and

Age of insured misstated

195. (1) Subject to subsections (2) and (3), if the age of the person insured has been misstated to the insurer then, at the option of the insurer, either

(a) the benefits payable under the contract shall be increased or decreased to the amount that would have been provided for the same premium at the correct age; or

(b) the premium may be adjusted in accordance with the correct age as of the date the person insured became insured.

Group insurance, effect of misstatement of age

(2) In the case of a contract of group insurance, if there is a misstatement to the insurer of the age of a group person insured or person insured, the provisions, if any, of the contract with respect to age or mis-statement of age applies.

True age governs beginning & end of insurance

BENEFICIARIES

Designation of beneficiary by declaration

196. (1) Unless otherwise provided in the policy, an insured may in a contract or by a declaration des