AM Best Upgrades Credit Ratings of SSQ, Life Insurance Company Inc.

AM Best has upgraded the Financial Strength Rating to A (Excellent) from A- (Excellent) and the Long-Term Issuer Credit Rating to “a” from “a-” of SSQ, Life Insurance Company Inc. (SSQ) (Quebec, Canada). The outlook of these Credit Ratings (ratings) has been revised to stable from positive.

The ratings reflect SSQ’s balance sheet strength, which AM Best categorizes as very strong, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management.

SSQ is primarily involved in group insurance and holds significant market share within the Quebec province. As the sixth-largest life insurer in Canada by premium volume, SSQ also offers a variety of products including group and individual insurance, property/casualty insurance, and investment and retirement products. The company’s majority shareholder, Fonds de solidarité FTQ, is the largest developmental capital network within Quebec and assisted SSQ with the acquisition of AXA Life of Canada in 2012. SSQ continues to prioritize expanding outside of Quebec, with some success over the long term.

The rating upgrades reflect SSQ’s improved risk-adjusted capitalization, decreasing financial leverage, and growth of absolute capital over the previous several years. In addition to a favorable Best’s Capital Adequacy Ratio (BCAR), the company also reported a robust regulatory solvency ratio through 2018 under Autorite Des Marches Financiers’s new capital regime, CARLI (capital adequacy requirements for life insurers), which took effect in Quebec on Jan. 1, 2018.

SSQ also continues to produce strong and consistent operating performance year-over-year, often posting low double-digit returns on equity. Despite some volatility in earnings by line, SSQ’s core group insurance business continues to generate favorable earnings on growing business volume, which is expected to accelerate in 2020, as the company takes on group business from the nearly 40,000 employees and retirees of HydroQuebec.

AM Best believes that SSQ will continue to support its very strong balance sheet strength over time, backed by favorable earnings and manage its concentration in Quebec, as it attempts to compete against larger more established entities throughout Canada.

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media – Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.

AM Best is a global credit rating agency and information provider with an exclusive focus on the insurance industry. Visit www.ambest.com for more information.

Cyber Insurance And D&O Liability

Last Updated: September 19 2019

Article by Deepshikha Dutt

Introduction

In the past decade, there have been several reports of cybersecurity attacks and data breaches to large corporations.1 In many cases, those affected by the breach want to hold the directors and officers accountable, as they feel the corporation failed to implement the proper security measures to prevent a breach from happening or did not effectively handle the aftermath of the breach. However, directors and officers generally enjoy limited personal liability subject to a few exceptions.2 Nevertheless, as more specific guidance emerges for directors and officers handling cybersecurity issues, the scope of this liability may widen.3 Thus, directors and officers should not take comfort in the substantial barriers that prevent them from being held liable for issues relating to the organization.4 In fact, despite these substantial barriers, shareholders continue to pursue derivative actions against directors and officers.

This article will discuss the scope of personal liability directors and officers face relating to cybersecurity breaches, and recent actions pursued against directors and officers in Canada and the US. Following the article, key takeaways will be provided.

Scope of liability

Cybersecurity poses a significant threat to directors and officers as cyber threats continue to emerge, and the rules and regulations that guide cybersecurity continue to evolve. Directors and officers may be held liable in the event of a cybersecurity attack if they are found to have breached their duty of care or have failed to comply with any disclosure requirements. Moreover, directors and officers can be personally liable where a company fails to comply with Canada’s Anti-Spam Legislation (CASL).5

Directors and officers have a duty to exercise reasonable care and diligence, both at common law6 and under corporate statutes.7 Failure to oversee the company’s cybersecurity measures adequately, before and after a breach occurs, could be considered a breach of this duty.8 Moreover, failure to comply with federal and provincial disclosure requirements after a breach could lead to liability for secondary market misrepresentation.9

Therefore, having an appropriate response or compliance plan, and effective security measures to protect the company against future cyber threats is essential. This will help support any claim by a director or officer that all requisite care and diligence was met, and all regulations were complied with.10

Lastly, directors and officers can be held personally liable and receive fines where the company has violated CASL. Penalties for non-compliance with CASL carries a maximum fine of CA$1 million for individuals and CA$10 million for organizations.11 Moreover, directors and officers can be vicariously liable for non-compliance of an organization even where the regulator, Canadian Radio-television and Telecommunications Commission (CRTC), does not pursue the organization. In fact, the CRTC has made a public statement that directors and officers cannot hide behind their company’s structure or online entities to avoid liability.

Derivative actions in Canada and the US

Currently, there have not been any attempts at a lawsuit against directors and officers in relation to cybersecurity in Canada.12 However, given the amount of derivatives actions commenced in the US, it is possible that it could give rise to such claims in Canada. The US has seen several derivative action suits against directors and officers relating to cybersecurity over the past few years.13 All but one have been unsuccessful, largely due to technical and procedural reasons. However, in January 2019, a derivative action lawsuit settled for US$29 million, compensating the plaintiffs significantly.14 This is the first time shareholders have been awarded monetary damages for a breach-related derivative lawsuit. This settlement could spark the beginning of successful derivative action lawsuits, and inspire others to pursue civil actions against directors and officers for cybersecurity breaches. Moreover, this settlement can be used as a benchmark for future civil actions to compare to when deciding on the amount to be awarded. Effectively, this settlement may not only effect civil actions in the US, but also allow derivative actions to gain traction in Canada.

Penalties for violation of Canada’s Anti-Spam Legislation

More recently, the CTRC has held directors and officers personally liable for a company’s violation of CASL. On April 23, 2019, the CTRC found that a coupon marketing company, nCrowd, had violated CASL, and found the former CEO of the company to be personally liable.15 As a result, he received a CA$100,000 fine. Further, a different company that was also part of this scheme with nCrowd, had also violated CASL, and CRTC held this company’s CEO vicariously liable for the violation. As a result, he received a fine of CA$10,000. Ultimately, liability under CASL can extend beyond the corporation if the person authorized, acquiesced or participated in the commission of the violation.

Key takeaways

  • Directors and officers should familiarize themselves with all regulatory guidelines to protect the company from a data breach and to avoid being personally liable for the breach;
  • D&O liability insurance does not always offer protection for cyber-related incidents or threats. It is important to confirm whether this is protected and the scope of protection provided. Not having proper protection could expose directors and officers to liability and significant payouts;
  • There have been no derivative action attempts relating to cybersecurity breaches in Canada, but given the current climate in the US, it is possible this will encourage such claims to occur in Canada; and
  • Directors and officers can be held either personally or vicariously liable for a company’s violation of CASL if that individual played some role in the commission of the violation.

Conclusion

Cybersecurity attacks and data breaches are inevitable and can happen to any organization, thus remaining a significant threat to corporate governance. While a cybersecurity attack is a crime, directors and officers may still be held liable for a breach if they failed to oversee the company’s security measures prior to the breach, or failed to take the necessary course of action after the breach occurred. Ultimately, boards of organizations must recognize the current cybersecurity environment that exists, and assemble a reasonable response plan to respond to these threats when and if they occur. Our final article will provide key takeaways and best practices for both insureds and insurers in relation to cybersecurity risks.

A special thank you to Emeleigh Moulton (summer student) for her assistance with this article.

About Dentons

Dentons is the world’s first polycentric global law firm. A top 20 firm on the Acritas 2015 Global Elite Brand Index, the Firm is committed to challenging the status quo in delivering consistent and uncompromising quality and value in new and inventive ways. Driven to provide clients a competitive edge, and connected to the communities where its clients want to do business, Dentons knows that understanding local cultures is crucial to successfully completing a deal, resolving a dispute or solving a business challenge. Now the world’s largest law firm, Dentons’ global team builds agile, tailored solutions to meet the local, national and global needs of private and public clients of any size in more than 125 locations serving 50-plus countries. www.dentons.com

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances. Specific Questions relating to this article should be addressed directly to the author.

Blink’s proactive travel insurance moves to Canada

By GlobalData Financial Services

Canada Insurance Giant Manulife has turned to Irish travel insurtech Blink to help it connect to younger, digitally-savvy customers. Blink has established itself through offering proactive travel insurance to customers as it automatically rebooks cancelled flights. It has a staggered system where customers delayed for three hours gain access to an airport lounge, then a hotel room if it’s over six hours and a new flight if it is cancelled or a flight connection is missed.

This is an emerging trend within the travel insurance sector, with competitor Fizzy offering a similar product to customers flying to the USA, though that only covers rebooking flights for severe delays or cancellations.

The Canada market represents a good opportunity for Blink, as only 28% of the population currently holds an annual travel insurance policy, according to GlobalData statistics. This compares to 35% in the UK and 38% in Ireland, where Blink originates, which suggests that there is room for growth within the Canadian market.

Manulife turning to Blink shows the interest from top insurers in real-time flight insurance continues to be strong, following Axa’s launching a partnership with Fizzy in 2017. With travel insurance penetration rates low around the world (an average of 27% of consumers globally hold an annual travel insurance policy) – especially among younger customers – convenient and digital policies like these should help to engage customers. It is also a continuation on the trend of leading insurers turning to start-ups to help them with innovation, and specifically in connecting to younger customers.

Our survey data showing that 72% of Canadians travel without an annual insurance policy suggests that this is a real opportunity for Blink to expand its global reach. The start-up has already been backed by European Insurance giant, Zurich, and it looks well set to continue disrupting the travel market.

Source: Verdict

Tesla’s Model 3 earns insurance industry’s top safety rating

REUTERS

Tesla Inc’s Model 3 electric sedan has earned the top safety rating from the Insurance Institute of Highway Safety (IIHS), becoming the first Tesla to do so.

The IIHS has given the Model 3 its highest rating, top safety pick+. It said the Model 3 earned good ratings across the board for crashworthiness.

The car’s structure held up well in the driver-side small overlap front test, IIHS said.

Last month, Tesla said it was launching an insurance service designed to give drivers in California, its biggest market, lower rates because of safety features on its electric vehicles.

Tesla Chief Executive Officer Elon Musk has been one of the strongest proponents of the idea that car insurance rates should plummet as driver-assist and self-driving technology become standard.

The company’s cars generally rank among the most expensive vehicles to insure due to their high repair costs for components and sensor equipment, according to safety researchers and insurance providers. (Reporting by Debroop Roy in Bengaluru and David Shepardson in Washington; Editing by Shounak Dasgupta)

Vehicle Owner Found Liable For Crash After Household Member Took Vehicle Without Permission

Source: Erik Magraken BC Injury and ICBC Claims Blog

Reasons for judgment were published last week with an extensive discussion of the principles of registered owner vicarious liability for BC collisions.

In the recent case (Bowe v. Bowe) the Plaintiff was injured as a passenger involved in a collision.  At the time of the crash the Plaintiff took his stepfathers car keys without permission.  They lived in the same household.  The Plaintiff contacted his cousin, who lived in a separate household, and collectively they took the vehicle.  In the course of the evening  the two boys drove around for several hours before the Accident.  Both took turns driving but at the time of the crash the cousin was behind the wheel.

The Plaintiff suffered serious injuries including a moderate brain injury.  A jury found the driver negligent and the plaintiff contributorily negligent.  A question arose as to whether the registered owner bears any liability in these circumstances.

Section 86 of BC’s Motor Vehicle Act establishes vicarious liability for vehicle owners when their vehicle is being driven by a household member or by anyone who acquired the vehicle with the owners consent.  The latter test was not applicable on these facts.  The court was asked whether the household member rule was triggered in these circumstances.  The applicable provision of the MVA reads as follows:

Responsibility of owner or lessee in certain cases

86(1)    In the case of a motor vehicle that is in the possession of its owner, in an action to recover for loss or damage to persons or property arising out of the use or operation of the motor vehicle on a highway, a person driving or operating the motor vehicle who

(a)        is living with, and as a member of the family of, the owner

Mr. Justice Voith found that, even though the cousin was not a household member at the time of the crash this provision was triggered and the registered owner was vicariously liable for the collision.  In reaching this conclusion the Court provided the following reasons:

[65]         It is important in this case not to be swayed by the fact that the Plaintiff took Mr. Boltz’s car keys without his permission.  This lack of consent, on the part of Mr. Boltz, is irrelevant, on a principled basis, to the intention and operation of s. 86(1)(a).  The provision is, instead, engaged in the first instance on account of the family relationship that exists between Mr. Boltz and the Plaintiff.  The Plaintiff’s own fault and contributory negligence, in taking the keys to the vehicle and in the events that gave rise to his injuries, are addressed by the jury’s specific findings on that issue.

[66]         Furthermore, the application of s. 86(1)(a) is not influenced by whether the injured party in a motor vehicle accident is an innocent and unknown third party who is struck by a vehicle or a passenger in that vehicle.  Under s. 86(1)(a), the same result necessarily ensues whether Dale struck an innocent person crossing the street or whether he injured the Plaintiff who was sitting beside him at the time of the Accident.  If the Defendants are correct, an innocent third party would have no recourse against Mr. Boltz.  I raise these matters because the result of this application must be consonant with the language of s. 86(1)(a) and with the object of that provision in the various circumstances that I have described.

[67]         The purview of s. 86(1)(a) clearly extends beyond those cases where a family member of the owner of the vehicle is involved in a motor vehicle accident while “driving” the vehicle.  It extends to cases where the family member is “operating” the vehicle.  How the words “operate” or “operating” are interpreted is a function of the meaning of those words and, to the extent different meanings are reasonably possible, a consideration of what meaning best achieves the intended purpose of the provision.

[68]         “Operate” in the MVA is, in other provisions, defined as having “the care or control” of a motor vehicle.  A somewhat extended definition of “operate”, found in the IVR, has earlier been considered in the context of s. 86.  That definition “includes” instances where an individual is in the “care, custody or control” of the vehicle.  The word “includes” in the IVR contemplates an even broader definition.  Furthermore, the specific words “care, custody or control” operate disjunctively.

[69]         In Hudson, the Court considered that the common sense meaning of “operate” extended to the “use” of the vehicle: see also Grey at paras. 9 and 10 and Barsaloux at para. 26.

[70]         In Morrison, providing access to the keys to a vehicle, albeit in the context of s. 86(1)(b), was associated with providing “the required degree of exclusivity of control”.

[71]         In this case, over the course of the evening, the Plaintiff and Dale drove Mr. Boltz’s vehicle and were passengers at different times.  When they changed roles, one would “drive” and the other would not.  This narrow set of activities only addresses the question of who was “driving” at different times.

[72]         When the Plaintiff obtained Mr. Boltz’s car keys, he initially sat in the driver seat and he held the car keys in his hand.  At that point, though he was not “driving”, the vehicle was in his “care, custody or control”.  I do not consider that that would change when he gave the keys to Dale.

[73]         To be specific, if the Plaintiff no longer held the keys he would likely no longer overtly have “control” of the vehicle.  He would, however, still have “care or custody” of the vehicle.  It would be open to him to ask for the return of the keys.  It would be open to him to require that they return to the Plaintiff’s home and that they return Mr. Boltz’s vehicle.

[74]         I posit an example that arises in a slightly different context but one that mirrors, on a principled basis, the circumstances of this case.  If a father gives his son his vehicle keys and his son, while on a trip, allows a friend to drive, while he sits in the passenger seat, can it be said that the son no longer has “care” or “custody” of his father’s vehicle?  Can it be said that he is not “using” the vehicle?  Based on the common sense meaning of these words, and on the authorities I have referred to, I do not consider that this is so.  To determine otherwise would be to make the words “drive” or “operate” virtually synonymous in circumstances where it is clear that the two words are both intended to, and do, have different meanings.

[75]         These conclusions are further informed by the intended remedial purpose of s. 86(1).  It is to be recalled that the “only policy reasons underlying s. 86(1) to be considered are those in favour of protecting innocent third parties seeking compensation for injuries suffered at the hands of negligent automobile drivers and, vicariously, owners”: Barreiro at para. 28.

[76]         Having regard to the foregoing considerations, I am satisfied the Plaintiff was, at the time of the Accident, “operating” Mr. Boltz’s vehicle notwithstanding the fact that he was a passenger in the vehicle.

[77]         This conclusion recognizes and gives effect to each of the words “drive” and “operate”.  It is consistent with the meaning of the word “operate” in the MVA and the IVR––a related enactment.  It is consistent with the object and remedial purposes of s. 86(1).  Still further it is consistent with the relevant authorities.

[78]         Based on this conclusion, and on the deeming provision in s. 86(1), Mr. Boltz is vicariously liable for the Accident.  There is no need to consider whether the circumstances of this case would establish vicarious liability at common law: Morrison at para. 23.

[79]         The Plaintiff is to have the cost of this application.

bc injury law, Bowe v. Bowe, Mr. Justice Voith, section 86 BC Motor VEhicle Act, section 86(1) motor vehicle act, section 86(1)(a) motor vehicle act, vicarious liability

RCMP: Truck driver who crashed on Malahat did not have insurance

By Adam Chan, CTV Vancouver Island

A commercial truck driver who crashed through a concrete median and into a BC Hydro pole off the Malahat on Monday did not have insurance, according to West Shore RCMP.

The crash, which occurred at approximately 2:30 p.m. on the Trans-Canada Highway near Aspen Road, knocked out electricity to more than 250 BC Hydro customers and caused lengthy traffic delays in both directions as RCMP officers and BC Hydro repair crews attended the scene.

According to the RCMP, the 27-year-old man driving the commercial semi-truck is being charged with having no insurance and driving without due care and attention.

The driver was taken to hospital for treatment of minor injuries.

On Tuesday morning, crews began to remove the semi-truck from the bottom of an embankment that it slid down on Monday.

Northbound traffic along Aspen Road was brought down to one lane during the removal process.

While the vehicle was being moved onto the road, diesel fuel could be seen spilling onto the road with crews placing absorment material on top of the liquid to soak up its spread.

By approximately 1:00 p.m. Tuesday, both northbound lanes along Aspen Road had reopened.

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