Fortuity - Canadian Insurance News and Trends - October 2025

Under B.C. law, product warranties and vehicle warranties are considered to be insurance. Subject to specific exemptions, any entity that sells product or vehicle warranty insurance is required to obtain an authorization to sell the warranty from the BC Financial Services Authority and to only sell such warranties through licenced agents or brokers.

The most commonly used exemption is the "manufacturers or retailers" exemption, whereby a business is allowed to offer a warranty incidental to the sale of a vehicle or product if they are the product manufacturers, vehicle manufacturers, retailers, including motor dealers, or their employees.

In the chain of sales of a product or vehicle, the entity that is subject to the exception may not be the precise entity that offers the product or vehicle (for example, some sales may be done by a subsidiary or commonly owned affiliate of a retailer). To clarify this issue, an amendment (with immediate effect) was made to the Insurance Exemption Regulation, BC Reg 366/2007 to provide the extension of the exemption to "a corporation that is a commonly owned affiliate of a manufacturer or retailer". The amendment went on to define "commonly owned affiliate" to include an entity where "all of the issued shares of the corporation and all of the issued shares of the manufacturer or retailer are directly or indirectly held by the same person".  In addition to the foregoing, "wholly owned subsidiary" was defined to include an entity where "all of the issued shares of the corporation are directly or indirectly held by the manufacturer or retailer".