Alberta Superintendent of Insurance warns P&C insurers of potential fines following broker contract termination

On June 30, 2025, the Alberta Superintendent of Insurance issued Interpretation Bulletin 03-2025 to all insurers providing private passenger vehicle automobile insurance in Alberta. The Bulletin clarifies the application of the Insurance Act’s adverse contractual action provisions in circumstances where an insurer’s contract with an insurance broker has been terminated. 

The Bulletin confirms that when an insured wishes to renew their automobile policy with the same insurer through a different broker, the insurer must treat the transaction as a renewal, not as new business. Insurers are prohibited from refusing renewal, charging a higher premium than would have applied on renewal (including any applicable “Good Driver” protections), or offering more restrictive coverage than would have been available under a renewal. Such actions are deemed to contravene sections 509(1), 555(3), and 602(1) of the Insurance Act, constituting unfair practices, adverse contractual actions, and premium overcharging, respectively.

The Superintendent notes that some insurers have, following broker contract terminations, improperly treated renewal requests through new brokers as new business, resulting in the denial of premium protections and the offering of less favourable coverage to insureds. The Bulletin directs insurers to ensure that all applicable premium protections and coverage options are maintained for renewing customers, even if the renewal is processed through a different broker. Where insurer or broker systems cannot retain the same policy number in these circumstances, a change in policy number is permitted.

Non-compliance with these requirements may result in administrative penalties of up to $25,000 per contravention. Alternatively, insurers may be prosecuted and, if convicted, face fines of up to $200,000 per offence, with each day of a continuing contravention constituting a separate offence.

Insurers who provide passenger vehicle insurance should ensure that they have systems in place to ensure that they are able to identify existing insureds that does not rely on broker submittals. The Superintendent directed in this Bulletin that insurers are expected to manually override any system constraints that would otherwise prevent compliance with these requirements.

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