• The B.C. Ministry of Finance confirmed to IBABC that the November 1 start date contemplates December 15, 2020 strata building policy renewals (and forward) are the first to be subject to the new insurer 45-day notice requirements.

• The B.C. Ministry of Finance confirmed to IBABC that strata corporation policies of all types are included in the new requirements including any commercial occupancy stratas.

• Brokers and insurers with any strata corporation policies (as defined by the Strata Property Act), for any size strata including 2 or more units, are required to comply with the new regulations.

• Brokers are strongly encouraged to contact all their markets including insurers, MGA’s etc. to determine steps their markets are taking to meet compliance.

• Insurers are subject to administrative penalties for non-compliance of the insurer notice provisions, and this extends to all insurers participating on any strata corporation subscription policy.

• Insurers who cannot provide intended renewal terms or conditions to the broker at or before 45 days before the policy expiry may also comply by providing notice of the reason why they have not provided terms plus an estimate of when they will advise renewal terms or conditions.

• Insurers may also, by option, choose to provide renewal terms or conditions; or confirmation of non-renewal, directly to the strata corporation with 30 days’ notice. NOTE: Insurers who choose to advise the Strata Corporation directly based on the insurer 30-day notice option are not required to advise the broker they have made this direct disclosure. This will lead to confusion and we are strongly encouraging the regulator and government to require notice to the broker.

• Brokers are currently required to provide disclosure that they receive compensation. Effective November 1, these new regulations now require the disclosure of strata corporation policy compensation or commissions to brokers in dollars, either…

1. at the time of the policy/inception or delivery if there is no material change in terms and conditions from the expiring policy or;
2. With 35-day advance notice to the strata corporation from the expiry date of the policy if the renewing policy has a material change in terms.

• If the broker disclosure of the amount of compensation or commissions, in dollars, is unknown to the broker at the time of disclosure then a reasonable estimate and information on how the commission/compensation is calculated is adequate.

• Brokers are subject to administrative penalties for non-compliance with the new regulations for disclosure of compensation or commissions, in dollars; as well as for noncompliance with the notice requirement of providing insurer renewal policy action/detail to the client with 35 days’ notice in advance of the expiry date.

• Generally, in summary, the broker should ensure they are in contact with their client to meet the 35 day notice requirement to report what is known at that time on the renewal regardless of whether the insurer and/or subscribing insurers have complied with their notice requirements. In addition brokers are reminded of the Insurance Council’s prior requirement for brokers to initiate client contact on strata corporation polices at 60 days prior to expiry (to advise that changes are coming and solicit renewal update info, etc.) and as well share what is known from insurers at the 35 day mark, as per these new regulations.

• BCFSA will collect and act on reports of insurer non-compliance from any source. The Insurance Council of B.C. will collect and act on reports of broker non-compliance from any source. Failure to disclose commission or to provide notice of non-renewal or material change may incur penalties of up to C$25,000 for an individual or C$50,000 for a corporation.

• If MGA’s and similar organizations are expected to comply at the insurer level of 45 days’ notice to the primary broker etc.

• As per the bullet point above - the possibility of a provision requiring insurer notice to the broker if the insurer chooses to communicate directly with the strata corporation.

• There are three different references in the regulations when referring to possible changes to the renewing policy e.g. “different terms and conditions” versus “substantially similar” versus “materially different terms and conditions”. We are seeking clarity on the use of these three references however, it is to be noted that any increase in premium is considered to meet the test of materiality and therefore requires the new notice. 

•  An update on the practice of subscription policy pricing negotiation? What is the current thinking regarding where this may land re strata insurance and/or all commercial use of subscription policies?

• The effect on the notice provisions of use of term extensions for the expiring policy.