Oct. 4, 2021 — ALBERTA is considering allowing the creation of captive insurance companies in the province.
The move is in response to difficulties the energy sector is facing in finding coverage due to a hard commercial market and a withdrawal of capacity due to global insurance companies’ environmental social and governance policies that are designed to reduce their carbon footprint, said David Mulyk, executive director of pension and insurance policy at the government of Alberta, during a recent virtual symposium presented by the Insurance Institute of Canada.
A captive insurer is wholly owned and controlled by its insureds. It insures the risks of its owners and the insured benefits from the captive insurer’s underwriting profits.
The government is working with industry stakeholders who are knowledgeable about captive insurance to create a proposal that would enable the creation of captive insurance legislation in the province, said Mr. Mulyk.
“Captives can provide additional insurance capacity for Alberta’s energy sector, although the legislation will be available to all companies and all sectors,” he said. “It would add to the expertise and diversity of the Alberta-based finance sector.”
He said legislation to enable the creation of captives in the province could be introduced this fall.
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