Alberta has taken the step of drafting guidance discussing the Superintendent of Insurance’s interpretation of adverse contractual action provisions in the province’s Insurance Act. This was done after some insurers in that province were found to have treated their clients as new customers instead of renewals in certain circumstances.

“The superintendent has noted that following the termination of a contract an insurer has with an insurance broker, some insurers refuse to renew private passenger vehicle (PPV) policies through a different, authorized broker. Instead, they treat the insured as new business rather than as a renewal. As a result, these insurers refuse to apply ‘good driver’ premium protections and/or offer coverage that is more restrictive than what would have been provided under a renewal,” the interpretation bulletin, 03-2025 states. “Accordingly, the superintendent issues this bulletin to ensure the application of appropriate premiums and to ensure consistent, fair treatment for affected customers.” 

The bulletin explicitly states that when an insurer refuses to renew an insured’s PPV insurance policy because it no longer conducts business with that client’s broker, this constitutes an adverse contractual action.

“If an insured wishes to renew their policy with their existing insurer through a different broker, the insurer must treat the policy as a renewal and not as a new policy. This requirement applies to all Alberta PPV insurance policies, regardless of whether the insured qualifies as a good driver,” the bulletin states. It goes on to say that charging premiums greater than what the renewal premium would have been, or offering more restrictive coverage than what would have been provided upon renewal, constitutes an unfair act or practice under the Act.

“If there are insurer or broker system constraints that hamper the implementation of these expectations, the insurer must manually override them. The superintendent also recognizes that some insurer broker systems are unable to retain the same policy number when renewing a policy through a different broker. In such cases, a change in policy number is acceptable,” they write.

Insurers contravening the relevant sections of the Insurance Act could be subject to administrative penalties in the amount of $25,000 per contravention or, alternatively, insurers could be prosecuted and subject to a fine of up to $200,000.