B.C. seeks to mitigate rising cost of strata insurance

B.C. seeks to mitigate rising cost of strata insurance

The Government of British Columbia says it is taking action to help stratas better mitigate the rising costs of insurance.

Actions include bringing more transparency to the strata insurance industry, closing loopholes related to depreciation reports, ending referral fees paid to property managers and giving strata owners and corporations the tools they need to do their part, a Ministry of Municipal Affairs and Housing media release stated.

“The rising cost of strata insurance is a major financial pressure facing thousands of British Columbians during an already challenging time,” said Carole James, Minister of Finance. “This is an extremely complex issue playing out in the private insurance industry, but that doesn’t lessen our government’s commitment to doing what we can to make the situation better. Everyone has a role to play in returning the market to balance and today our government is taking a first step, with the understanding that we will take further action as needed.”

Through amendments to the Strata Property Act and Financial Institutions Act, as well as associated regulatory changes, the government will:

* end the practice of referral fees between insurers or insurance brokers and property managers or other third parties;

* set out clear guidelines for what strata corporations are required to insure to help strata councils make informed decisions on their insurance policies;

* require strata corporations to inform owners about insurance coverage, provide notice of any policy changes, including increasing deductibles, and allow stratas to use their contingency reserve fund when necessary to pay for unexpected premium increases; and

* protect strata unit owners against large lawsuits from strata corporations if the owner was legally responsible for a loss or damage, but through no fault of their own.

The legislation also paves the way for the government to make further regulatory changes to:

* identify when stratas are not required to get full insurance coverage;

* strengthen depreciation reporting requirements, including limiting the ability to use existing loopholes in the legislation to avoid completing depreciation reports;

* change the minimum required contributions made by strata unit owners and developers to a strata corporation’s contingency reserve fund;

* require brokers to disclose the amount of their commission, which has been reported to be at times in excess of 20%; and

* strengthen notification requirements to strata corporations of changes to insurance coverage and costs, or an intent not to renew.

These regulatory changes will be made after further consultation with strata community stakeholders.

“We understand the difficulty people living in stratas face when they experience a large increase in insurance costs or have challenges finding insurance at all,” said Selina Robinson, Minister of Municipal Affairs and Housing. “This legislation is a first step to help strata corporations now as we continue to work on this complex issue. I look forward to the BC Financial Services Authority’s final report in the fall, which will help identify further actions government can take to support people living in strata properties.”

Government’s actions were guided in part by input from key stakeholders, including Condominium Home Owners Association of BC; Vancouver Island Strata Owners Association; Insurance Brokers Association of BC; Insurance Bureau of Canada; Insurance Council of BC; Office of the Superintendent of Real Estate; Real Estate Council of BC; Mortgage Brokers Association of BC; BC Real Estate Association; and the interim report of the BC Financial Services Authority.

The Ministry of Municipal Affairs and Housing and the Ministry of Finance will also review the final report from BC Financial Services Authority in the fall to determine what further changes the government can make to help lower strata insurance costs for people.

Over 1.5 million people live in strata housing in B.C.

At the direction of the minister of Finance, the BC Financial Services Authority released its interim report on the rising cost of strata insurance in British Columbia on June 16, with a final report expected in fall 2020.

The report found that premiums have risen by approximately 40% throughout the province on a year-over-year basis, with deductibles experiencing up to triple-digit increases over the same period.

The BCFSA is the regulator responsible for the private sector insurance industry in British Columbia.

Source: e-KNOW

Edited for ILSTV

Calgary residents cope with financial costs of hail storm not covered by insurance

The excerpted article was written by CALGARY

The hail storm came up fast, with a sound like someone was throwing rocks at their walls and roof.

Then Mona Kadri saw a white pellet fall and bounce inside her house. A loud crash followed as the skylight gave way, shattered by the force of the hail, sending glass and ceiling pieces crashing down. She and her husband sheltered in the living room away from the golf ball-sized hail that pounded her spiral staircase, while the family cat, Brie, cowered in the basement.

“It was like a war zone,” said Ms. Kadri, 60, of the June 13 evening when an unusually powerful cloudburst hit Calgary’s northeast neighbourhoods.

The hail and rain storm flooded streets, shredded siding on thousands of houses, hammered cars, smashed windows, and caused hundreds of millions of dollars in damage. Even Calgary Mayor Naheed Nenshi’s house wasn’t spared.

“I’ve never seen anything like it in all of my years. It’s like the homes have been shot at, straight from the air,” said Tom Sampson, chief of the Calgary Emergency Management Agency.

For Ms. Kadri and thousands of others affected by the storm, the burning question two weeks later is how to pay insurance deductibles, and for repairs and cleanup not covered by their policies. With the losses mounting, the provincial government’s announcement Thursday that it will be providing emergency disaster funding only for uninsurable property losses – mainly overland flooding – as well as municipal cleanup costs, is unlikely to quiet the calls for help paying for property damage that was mostly caused by hail.

The storm has exacerbated what was already a difficult situation for the diverse, working-class quadrant of Calgary. The city’s unemployment rate sits above 13 per cent. Many lost work or shut down their businesses when COVID-19 hit. Ms. Kadri’s one-woman catering business has seen bookings dry up as large gatherings are cancelled because of the pandemic. Others lost their jobs when oil prices crashed in April.

“COVID has come at probably the worst time ever in Alberta’s history,” said Khalil Karbani, a spokesman for community associations and religious groups in the area.

“And over and above all that, we have this hail storm,” he said.

“It’s survival mode right now.”

Southern and central Alberta, and northeast Calgary and nearby Airdrie in particular, are well-known for the ferocity of their summertime hail storms. Over the past decade, there have been more than two dozen hail storms in Alberta with damages totalling more than $4-billion in insured losses.

The rate of severe weather events in Alberta has increased in the past decade. But it appears the damage from June 13 is much more widespread, and could be the most expensive of a run of major summer hail storm events since 2010. The mayor says the damage could hit $1-billion – and could perhaps have damaged more homes than the 2013 flood – while the province pegs it at $250-million to $500-million. The storm hit Calgary, Airdrie and Rocky View. In communities such as Saddle Ridge and Taradale, block after block is marked by houses with damaged siding, shattered windows, and vehicles that appear as if they were battered with hammers.

Given the size and velocity of the hail that came down, “my estimate is that any car parked on the road north of 64th Avenue is probably a write-off,” said George Chahal, councillor for Ward 5, the epicentre for damage.

This hail was unusually concentrated on a populous and urban area, upping the amount of property damage, according to the Insurance Bureau of Canada.

Mr. Karbani argues some insurance companies are only willing to cover a portion of damages because of depreciation and are “hiding behind the fine print” of their policies. Some people, he noted, cancelled comprehensive auto insurance, which includes hail damage, while their vehicles were parked unused during the pandemic.

He said the province should set up a special disaster relief fund lest the damage to houses, cars and psyches be left unattended for months and years. “It has broken us in pieces already.”

Premier Jason Kenney agreed during a news conference Thursday that the timing of the storm could not be worse. But he said the government is not willing to pay above and beyond the Disaster Recovery Program, which doesn’t cover hail, sewer backup and insurance deductibles.

“If the government steps in and starts making payments for insurable private property, that would create a very serious moral hazard where people would – in the future – say they have no need to insure their property.”

The Premier added that such a move would effectively “bail out” insurance companies, as they wouldn’t face the impetus to make good on their policies if they knew the government was going to step in.

As of midday Thursday, the Insurance Bureau of Canada said more than 35,000 insurance claims related to the storm had been made. More claims are coming in every hour, said Rob de Pruis, a spokesman for the industry group.

People should have been aware of the limitations of their policies when they purchased them, he said, and some made the choice to purchase a less extensive policy to keep their premiums lower.

“An insurance policy is not a maintenance policy,” he added.

Mr. Kenney pledged his government will push insurance companies to honour policies, and “do so generously, erring on the side of the claimants.”

Source: The Globe and Mail

Known fraudsters targeting CERB for wrongful benefits

By Jordan Press

THE CANADIAN PRESS

OTTAWA _ Harsh penalties for defrauding the Canada Emergency Response Benefit are needed because organized crime and identity thieves are trying to scam the program, a House of Commons committee was told Thursday

A Canada Revenue Agency official said federal systems have already flagged a number of potential fraudulent applications for the $2,000-a-month CERB, including people involved in criminal activity that have now targeted the pandemic-aid program.

Ted Gallivan, the agency’s assistant commissioner in charge of compliance, said about five people already under a joint police-CRA investigation for other reasons are now being looked at for CERB fraud as well.

The agency is receiving leads on possible fraud and has “a number” of joint operations with local police, but Gallivan told the finance committee that it wants the power to go after fraudsters.

Earlier this week, the Liberals were unable to get unanimous agreement from the opposition parties to swiftly pass a bill that included fines and possible jail time for CERB fraud. NDP Leader Jagmeet has argued that the penalties will hit Canadians who mistakenly applied for the benefit, despite government assurances that they’re intended to deal only with those who knowingly and deliberately defraud the program.

Gallivan said the measures being sought would target people who have filed hundreds of fraudulent claims, such as those who have reportedly gone into retirement homes to have seniors sign up for the benefit.

“We do think it’s important to have a criminal sanction at the end of that,” Gallivan said during an Thursday evening committee video conference.

“Criminal sanctions being sought are really to deter people operating at scale because merely asking them to pay the money back won’t have the deterrent effect we need.”

Gallivan said the system that doles out the CERB was set up to flag possible fraud, such as someone changing their direct deposit information a day before applying for the benefit, or someone filing thousands of claims on behalf of clients.

Figures released last week by the agency showed that 190,000 benefit payments had been repaid online as of June 3.

NDP finance critic Peter Julian said new powers aren’t needed because criminal penalties already exist for fraud or people misusing social insurance numbers. He noted that criminal investigations are already under way without the additional powers.

Demand for the CERB has surpassed federal expectations, pushing its budget to $60 billion from $35 billion.

The most recent figures show that $43.51 billion in benefits have been paid out as of June 4 to 8.41 million unique applicants. But those numbers include $20.56 billion from the employment insurance account to 3.96 million EI-eligible workers who exhausted their benefits and couldn’t find work due to the pandemic.

In a recent interview, Conservative employment critic Dan Albas said the spending raises questions about whether EI premiums will have to go up in the future.

“There’s a lot of different things in play here,” Albas said. “There’s the overall spending trajectory of the government, there’s the current state of finances, particularly with the EI fund and because there’s been no budget, we just don’t know its status.”

Finance Minister Bill Morneau was pressed anew during his appearance Thursday at the finance committee about when the government would provide a budget or fiscal update. But he again said that won’t be possible until there is greater economic certainty.

The total spending package on pandemic-related aid now tops $153.6 billion, not including tens of billions more in loan programs, as detailed by the Finance Department in its latest report to MPs.

A commercial rent relief program has doled out $39 million in loans to landlords as of June 8, representing help to more than 5,000 tenants. Delivered jointly with provinces, the federal government provides almost $3 billion to the program.

Morneau said application numbers have gone up in recent days after provinces announced eviction bans.

“That is starting to change the activity between tenants and landlords,” Morneau said, adding a moment later: “There are very encouraging signs that this program can have a big impact on commercial tenants.”

 

Canada’s Film & TV Industry Presents Unique Insurance Solution with Government Support

The excerpted article was written by Manori Ravindran | Variety

Canada’s production community is working towards a bespoke insurance solution as the country looks to jumpstart production after it ground to a halt in March amid the coronavirus outbreak.

Variety can reveal that producers’ trade body, the Canadian Media Producers Association (CMPA), is developing a proposal for a “market-based solution” that asks the federal government to serve as a backstop for coronavirus insurance claims.

An update from the CMPA sent to producers on Monday and seen by Variety details a plan in which producers would pay premiums to access COVID-19 coverage, which would then go into “a dedicated pot to pay for potential claims.”

“The government would only contribute financially if the funds generated [through] the sale of the policies was insufficient to cover the claims made,” reads the memo.

In Canada, like most other countries, insurers are refusing COVID-19 coverage for the production sector. “Left unaddressed, this would mean the financial consequences associated with another industry-wide shutdown, or an on-set COVID-19 incident, would fall primarily to the producer,” said the CMPA, warning that the repercussions of these scenarios would be “potentially devastating” to the sector and threaten its prospects of a smooth restart.

The org has now raised the insurance issue with the government and is to submit a “detailed proposal” in the coming days, outlining what it calls an “industry-wide solution.”

A CMPA spokesperson told Variety: “Without the availability of insurance policies to cover future COVID-19 risks, most production in Canada will not resume. A government-backstopped insurance program will provide confidence to the marketplace, encouraging insurers to offer COVID-19 coverage, allowing producers to purchase policies, and ultimately allowing Canada’s production sector to re-open, once it is safe to do so.”

In recent weeks, the CMPA has hinted at plans to develop a “made-in-Canada solution” to cover productions post-shutdown. The group has been examining international insurance solutions, such as France’s indemnity fund — a $54 million fund that will cover up to 20% of a project’s budget and work on a case-by-case basis — as well as programs being proposed in the U.K. and other territories.

The CMPA said previously that it was also looking at tax credits, shared risk pools and government liability protections.

As revealed by Variety last week, the U.K. recently submitted a proposal to the government for a guarantee around coverage of suspension or abandonment costs relating to COVID-19. This could manifest in the form a government-backed fund that may amount to hundreds of millions of pounds.

The CMPA estimated in April that Canada’s production shutdown put around 172,000 jobs at risk, and could ultimately cost the Canadian film and TV sector — whose service industry supports myriad Hollywood shoots in provinces such as British Columbia and Ontario — around CAD$2.5 billion ($1.8 billion) in both domestic and foreign production dollars if it continues until the end of June.

There is, however, finally some light at the end of the tunnel, with the first signs of production resuming post-shutdown. Manitoba became the first province to allow its production sector to restart as of Monday, with local soundstages opening back up for business.

The first wave of renewed production in Canada is expected to focus on domestic projects due to the limitations posed by mandatory quarantine periods for inbound travel, making it tricky for any international projects, particularly U.S. studios, looking to shoot up north.

Source: Read more articles like this at Variety

BC Issues New Orders And Guidance To Employers For Phase 2 Of Its Restart Plan

The excerpted article was written
McCarthy Tétrault LLP

As BC begins Phase 2 of its Restart Plan, the Provincial Health Officer and WorkSafeBC (“WSBC”) have published the following orders, guidance and resources relevant to employers.

Orders by the Provincial Health Officer

On May 14, 2020, Dr. Henry issued an order cancelling her earlier April 16, 2020 order that operators close all personal service establishments and stop providing personal services in any location. Personal service establishments may open effective May 19, 2020.

On May 14, 2020, Dr. Henry enacted an order regarding workplace safety plans (the “COVID-19  Safety  Plans“). Under the order, an employer must post a copy of its COVID-19 Safety Plan on its website, if it has one, and at all of its workplaces so that it may be reviewed by workers, individuals who attend the workplace and members of the public. On request, an employer must also provide a copy of its COVID-19 Safety Plan to a health officer or a WSBC officer.

On May 15, 2020, Dr. Henry issued an order allowing restaurants and bars to open subject to conditions, including implementing physical distancing measures. Patrons must be able to maintain a distance of two metres from staff as well as one another, unless they are in the same party. Further, establishments cannot exceed 50 percent of their usual capacity of patrons present at one time, and they cannot hold events that include more than 50 people. If practicable, establishments must retain contact information for one member of every party of patrons for thirty days in the event that the medical health officer needs it for contact tracing. Finally, nightclubs must remain closed. The order came into effect on May 19, 2020.

The Provincial Health Officer may take enforcement action against any party that violates these orders under Part 4, Division 6 of the Public Health Act.

Recent Guidance

The BC Ministry of Health and the BC Centre for Disease Control recently published guidance for employers and workers in various sectors, including natural resources, farming and hotels.

The guidance for natural resource sector work camps includes conducting a COVID-19 workplace risk assessment for field operations, worker education, increased hygiene and cleaning practices, physical distancing, transportation for workers, guidance for workers while working, guidance for workers during breaks or while in communal spaces, guidance for situations where maintaining physical distance of two metres is difficult, guidance on handling tools and equipment, guidance on COVID-19 and worker accommodation, information regarding First Nations and First Nations Health Centres, physical distancing and local communities, information about face masks, and what employers must do to monitor worker health.

The guidance for farms and farm workers includes conducting a COVID-19 workplace risk assessment for the farm operation, worker education, guidance for training workers and employers on hygiene, guidance for increased hygiene, guidance for increased cleaning, physical distancing, transportation for workers, guidance for workers while working, guidance for workers during breaks or while in communal spaces, guidance for situations where maintaining physical distance of two metres is difficult, guidance on handling tools and equipment, guidance on COVID-19 hygiene and worker accommodation, information regarding First Nations and First Nations Health Centres, physical distancing and local communities, information about face masks, and what employers must do to monitor worker health. The guidance acknowledges that physical distancing between farm workers may be difficult in certain situations. Where workers are required to work together in close proximity to complete tasks, employers should form work pods (of six or fewer workers, if possible) to limit close contact within a small group. Similarly, where workers are required to travel together in vehicles to the work site, workers must travel in designated vehicles with their work pod and frequently clean and disinfect vehicles.

Guidance for the hotel sector covers general cleaning, housekeeping and laundry, waste management, food and beverage services, spas and salons, pools, fitness centres and playgrounds, staff health, and communication, signage and posters.

WSBC Guidance and Resources

WSBC has recently issued guidance relevant to Phase 2, including about COVID-19 Safety Plans, controlling exposure of the virus to workers, and new communication and training requirements.

COVID-19 Safety Plans

Employers must involve frontline workers, joint health and safety committees and supervisors when creating protocols for their workplace. WSBC has published a six-step process to help employers create their COVID-19 Safety Plan. The WSBC template is a fillable PDF that employers can use to develop their policies, guidelines and procedures. Employers are not required to have a formal plan in place prior to beginning operations, but are expected to develop their COVID-19 Safety Plan while taking steps to protect their workers’ safety. WSBC will consider enforcement measures if employers fail to take measures to protect workers from COVID-19.

Controlling Exposure

Employers should develop policies on who can be at the workplace, including policies on sick workers and recent travel. Employers do not have to implement health monitoring, such as temperatures checks or medical questionnaires, and should be aware of privacy issues if they choose to collect potentially sensitive medical information. WSBC notes that wearing masks is not mandatory for workers outside healthcare workplaces, and that masks and other personal protective equipment (“PPE”) should not be used as the only control measure. Instead, employers should offer the following types of protection, listed in order of greatest efficacy: i) eliminate risks (i.e. by limiting the number of workers at any one time, and enforce physical distancing), ii) implement engineering controls (i.e. installing barriers such as Plexiglas to separate people), iii) establish administrative controls (i.e. cleaning protocols) and iv) supply PPE such as non-medical masks.

Communication and Training

Employers should provide information to workers describing how they are managing COVID-19, including COVID-19 symptoms and a reminder not to go to work if workers have them, occupancy limits in common areas and other physical distancing measures, how specific tasks have been changed to prevent the potential spread of the virus, and instructions about hygiene. Employers are also responsible for training workers in tasks that they have changed as part of their COVID-19 Safety Plan, such as limits on the number of people in certain areas of the workplace and cleaning expectations for common areas and equipment. Where workplaces interface with customers, employers should consider adding signage, floor markings and other directions to ensure customers are maintaining physical distance from workers.

Source: Mondaq

CMPA proposes ‘industry-wide solution’ to insurance conundrum

The excerpted article was written by

Source: Realscreeen

The Canadian Media Producers Association (CMPA) is in the process of developing a proposal that, if accepted, would see the federal government serve as a backstop for COVID-19 insurance claims.

Under the proposed solution – a detailed version of which will be submitted to the federal government in the coming days – producers would pay premiums for COVID-19 insurance coverage, which would go toward a funding pot designated for potential claims. The government would only be called upon to contribute financially if the funds generated through the sale of the COVID-19 policies was insufficient to cover the claims made, said the CMPA.

Since the production shutdown in mid-March, insurance companies have changed their coverage options so that claims related to COVID-19 (and communicable diseases more generally) are not covered. Across North America, the insurance industry as a whole is counting billions in losses and pending claims stemming from the onset of the COVID-19 pandemic.

“The CMPA is acutely aware that insurance companies are not offering COVID-19 coverage for the production sector at this time. Left unaddressed, this would mean the financial consequences associated with another industry-wide shutdown, or an on-set COVID-19 incident, would fall primarily to the producer. This would be potentially devastating to our sector and a significant barrier to the start up or resumption of production for many of our members,” read a statement from the CMPA. The association said it will also be reaching out to a “wide range of industry stakeholders to confirm broad support for this initiative.”

What remains unclear is how much producers would pay for the proposed premiums for COVID-19 coverage, and how much money would be in the pot. It is also likely that the government would need projections on how much a future production shutdown would cost before it committed to backstopping insurance claims related to COVID-19. (It should be noted that outside of exclusions for COVID-19 and/or communicable diseases, Canadian film and TV projects are still able to obtain insurance for production.)

While the implementation of on-set safety protocols and guidelines has dominated much of the discussion for the past two and a half months, the issue of how to resume production in the absence of insurance for COVID-19 has largely been viewed as the film and TV industry’s biggest obstacle, especially for higher-budgeted series, such as scripted dramas, that typically require larger casts and crews.

It is not simply a production issue, as bank loans, interim financing and financing contracts are typically contingent on the presence of insurance, making it all but impossible for independent Canadian projects TV projects to resume until a resolution has been found. It is supposed that unscripted projects and documentaries (which typically have smaller budgets and can be shot with smaller crews) will be able to navigate insurance issues more easily, however a clear route back to production has not been outlined for the unscripted or doc sectors in Canada either.

Other jurisdictions have proposed similar measures that would see the government acting as a backstop for COVID-19 insurance claims. Last week, the UK industry put forth a proposal that would see the government help cover the costs of shutdowns related to COVID-19. Other proposals have been put forth in Australia, France and elsewhere to help jumpstart the local production sectors, which are grappling with the same issues as Canada. In the state of New York, a proposal was floated last month that would also see the government backstopping insurance claims.

The unveiling of CMPA’s insurance proposal comes as Canadian provinces begin to release the guidelines for on-set processes in the age of COVID-19. Manitoba was the first province to release full details of its protocols, while Quebec also released its own guidelines yesterday. Other provinces, including Ontario, are expected to follow suit in the next week or two.

Previously the CMPA said it expects the production shutdown will mean at least a $2.5-billion shortfall in production spending ($773-million for Canadian content, $1.76 billion for the service economy) if film sets remain closed until June 31.

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