Source: Alberta Insurance Council
Since 2001, the Alberta Insurance Council (“AIC”) has issued restricted insurance agent licenses to prescribed businesses that authorize them to sell certain types of insurance. From time to time the Government of Alberta, through regulation, has expanded the list of businesses that are eligible to apply for this restricted form of license.
While the Government determines the types of businesses that are entitled to apply for these licenses, the General Insurance Council (“GIC”) and Life Insurance Council (“LIC”) have the delegated authority to determine the types of insurance that can be sold under the restricted license and the conditions under which these products are marketed and sold.
In 2015, industry stakeholders sought the GIC’s approval to sell GAP insurance through vehicle dealerships and equipment dealers.
GAP insurance means property insurance that covers all or a portion of the difference between the recovery received on primary automobile insurance in the event of a total loss and the MSRP of a current year replacement vehicle or the difference between the recovery on a primary automobile insurance policy and an outstanding loan or lease obligation in the event of total loss.
After considering the proposals in depth, the GIC has approved the issuance of a restricted certificate of authority authorizing both vehicle and equipment dealerships to sell GAP insurance. This will require motor vehicle dealerships and equipment dealerships wishing to become engaged in the sale of GAP insurance, to obtain a certificate of authority authorizing the sale of the product. In addition to the terms and conditions found in the Insurance Act and regulations, the GIC prescribed certain licensing conditions that will appear on the licenses. These can be viewed here.
Eligible businesses can apply for restricted certificates to transact GAP insurance commencing August 2, 2016. For information on the application process and forms, please follow the links provided.
The certificate term will mirror that of other restricted certificates of authority and the license fee will be the same.