Overview

To clarify the requirements of the Insurance Act (the Act) with respect to the disclosure and reporting of unlicensed insurance, the Alberta Superintendent of Insurance (the Superintendent) issued Interpretation Bulletin 02-2017 – Unlicensed Insurance (PDF, 80 KB) in October 2017.

Pursuant to sections 61 and 63 of the Act, an unlicensed insurer may enter into a contract of insurance insuring a risk in Alberta if a disclosure of the unlicensed insurance is made by the insured to the Superintendent.

Disclosure, reporting and payment

Disclosure, reporting and payment of charges for unlicensed insurance can be made:

  • directly to the Superintendent; or
  • through a Licensed Special Broker.

Disclosure - insurance placed directly with the unlicensed insurer

Section 61 of the Act applies to a contract of insurance placed directly by an insured with an unlicensed insurance company without the participation of a licensed special broker.

In this circumstance, the purchase of unlicensed insurance by an insured must be disclosed to the Superintendent by the insured no later than 30 days after the insured signs the contract of insurance.

A regulatory charge is calculated based on the amount of premium and is to be paid to the Government Alberta by the insured. The amount of the charge is equal to 50% of the premiums paid for the unlicensed insurance that covers a risk in Alberta. We will accept a reasonable allocation of premiums, where the policy covers risks in other locations in addition to Alberta. At the request of the insured, the Superintendent may consider a reduction in the charge to an amount not less than 10% of the premium paid, if the insured can provide evidence that at least 5 insurers licensed in Alberta have declined to provide coverage, commonly referred to as “declinations”, at the time of purchase.

Disclosure - insurance placed through a Special Broker

Section 63 of the Act applies to a contract of insurance placed with an unlicensed insurance company by way of a licensed special broker.

In this circumstance, the purchase of unlicensed insurance must be disclosed to the Superintendent by the special broker no later than the 10th day of the month following the effective date of the insurance.
A tax is to be paid based on the amount of premium paid or payable by the insured. The amount of the tax is the amount that would be payable if the premiums had been received by a licensed insurer and are currently what a licensed insurer would pay:

  • 3% of the premium paid with respect to life and accident and sickness insurance
  • 4% for all other classes of insurance

Pursuant to section 72 of the Act, the tax is to be paid by the special broker, on behalf of its insured client, to the Government of Alberta.

A special broker is required to obtain declinations confirming that the insurance could not be obtained from an insurer licensed in Alberta, before the insurance is effected.

Alberta accepts electronic filing only

The Superintendent requires the disclosure of unlicensed insurance be completed using the Insurance Regulatory Information System: https://insurancefilings.alberta.ca

If you require assistance, please send an email to:
tbf.unlicensedinsurance@gov.ab.ca

For full details, see Interpretation Bulletin 02-2017 – Unlicensed Insurance (PDF, 80 KB) (October 17, 2017).

Sign up for updates

Subscribe to get our insurance publications by email

Contact

If you have trouble opening fillable PDF forms

See the form instructions.

To connect with Prudential Supervision, Office of the Alberta Superintendent of Insurance

Hours: 8:15 am to 4:30 pm (open Monday to Friday, closed statutory holidays)
Phone: 780-415-6496
Toll free: 310-0000 before the phone number (in Alberta)
Fax: 780-420-0752
Email: tbf.unlicensedinsurance@gov.ab.ca

Address

Alberta Superintendent of Insurance
Alberta Treasury Board and Finance
Financial Sector Regulation and Policy
402 Terrace Building
9515 107 Street
Edmonton, Alberta  T5K 2C3