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[Link to Table of Legislative Changes which shows
currency of each section of the Act.]
INSURANCE ACT — Continued
[RSBC 1996] CHAPTER 226
29 In this Part:
"application" means an application for insurance or for the reinstatement of insurance;
"beneficiary" means a person, other than the insured or the insured's personal representative, to whom or for whose benefit insurance money is made payable in a contract or by a declaration;
"contract" means a contract of life insurance;
"court" means the Supreme Court;
"creditor's group insurance" means insurance effected by a creditor in respect of the lives of the creditor's debtors by which the lives of the debtors are insured severally under a single contract;
"declaration" means an instrument signed by the insured
(a) with respect to which an endorsement is made on the policy,
(b) that identifies the contract, or
(c) that describes the insurance or insurance fund or a part of it,
in which the insured designates, or alters or revokes the designation of, the insured's personal representative or a beneficiary as one to whom or for whose benefit insurance money is to be payable;
"family insurance" means insurance by which the lives of the insured and one or more persons related to the insured by blood or marriage or adoption are insured under a single contract between an insurer and the insured;
"fraternal society" means a society, order or association incorporated for the purpose of making with its members only, and not for profit, contracts of life, personal accident and sickness insurance in accordance with its constitution, bylaws and rules and this Act;
"group insurance" means insurance, other than creditor's group insurance and family insurance, by which the lives of a number of persons are insured severally under a single contract between an insurer and an employer or other person;
"group life insured" means a person whose life is insured by a contract of group insurance, but does not include a person whose life is insured under the contract as a person dependent on, or related to, him or her;
"instrument" includes a will;
"insurance" means life insurance;
"insured"
(a) in the case of group insurance means, in the provisions of this Part relating to the designation of beneficiaries and the rights and status of beneficiaries, the group life insured, and
(b) in all other cases means the person who makes a contract with an insurer;
"will" includes a codicil.
30 (1) Despite any agreement, condition or stipulation to the contrary, this Part applies to a contract made in British Columbia on or after July 1, 1962, and, subject to subsections (2) and (3), applies to a contract made in British Columbia before that day.
(2) The rights and interests of a beneficiary for value under a contract that was in force immediately before to July 1, 1962 are those provided in Part IV of the Insurance Act then in force.
(3) If the person who would have been entitled to the payment of insurance money if the money had become payable immediately before to July 1, 1962 was a preferred beneficiary within the meaning of Part IV of the Insurance Act then in force, the insured may not, except in accordance with that Part,
(a) alter or revoke the designation of a beneficiary, or
(b) assign, exercise rights under or in respect of, surrender or otherwise deal with the contract,
but this subsection does not apply after a time at which the insurance money, if it were then payable, would be payable wholly to a person other than a preferred beneficiary within the meaning of that Part.
31 In the case of a contract of group insurance made with an insurer authorized to transact insurance in British Columbia at the time the contract was made, this Part applies in determining
(a) the rights and status of beneficiaries if the group life insured was resident in British Columbia at the time he or she became insured, and
(b) the rights and obligations of the group life insured if he or she was resident in British Columbia at the time he or she became insured.
32 (1) An insurer entering into a contract must issue a policy.
(2) Subject to subsection (3), the provisions in
(a) the application,
(b) the policy,
(c) any document attached to the policy when issued, and
(d) any amendment to the contract agreed on in writing after the policy is issued
constitute the entire contract.
(3) In the case of a contract made by a fraternal society, the policy, the Act or instrument of incorporation of the society, its constitution, bylaws and rules, and the amendments made to any of them, the application for the contract and the medical statement of the applicant constitute the entire contract.
(4) An insurer must, on request, furnish to the insured or to a claimant under the contract a copy of the application.
33 (1) This section does not apply to a contract
(a) of group insurance,
(b) of creditor's group insurance, or
(c) made by a fraternal society.
(2) An insurer must set out in the policy the following:
(a) the name or a sufficient description of the insured and of the person whose life is insured;
(b) the amount, or the method of determining the amount, of the insurance money payable, and the conditions under which it becomes payable;
(c) the amount, or the method of determining the amount, of the premium and the period of grace, if any, within which it may be paid;
(d) whether the contract provides for participation in a distribution of surplus or profits that may be declared by the insurer;
(e) the circumstances in which the contract lapses and the conditions on which the contract may be reinstated if it lapses;
(f) the options, if any,
(i) of surrendering the contract for cash,
(ii) of obtaining a loan or an advance payment of the insurance money, and
(iii) of obtaining paid up or extended insurance.
34 In the case of a contract of group insurance or of creditor's group insurance, an insurer must set out in the policy the following:
(a) the name or a sufficient description of the insured;
(b) the method of determining the persons whose lives are insured;
(c) the amount, or the method of determining the amount, of the insurance money payable, and the conditions under which it becomes payable;
(d) the period of grace, if any, within which the premium may be paid;
(e) whether the contract provides for participation in a distribution of surplus or profits that may be declared by the insurer.
35 In the case of a contract of group insurance, an insurer must issue, for delivery by the insured to each group life insured, a certificate or other document in which are set out the following:
(a) the name of the insurer and an identification of the contract;
(b) the amount, or the method of determining the amount, of insurance on the group life insured and on any person whose life is insured under the contract as a person dependent on or related to him or her;
(c) the circumstances in which the insurance terminates and the rights, if any, on termination, of the group life insured and of any person whose life is insured under the contract as a person dependent on or related to him or her.
36 (1) Subject to subsection (2), if at the time a contract would otherwise take effect the insured has no insurable interest, the contract is void.
(2) A contract is not void for lack of insurable interest
(a) if it is a contract of group insurance, or
(b) if the person whose life is insured has consented in writing to the insurance being placed on his or her life.
(3) If the person whose life is insured is under the age of 16 years, consent to insurance being placed on his or her life may be given by one of his or her parents or by a person standing in the place of a parent.
37 Without restricting the meaning of the expression "insurable interest", a person has an insurable interest in his or her own life and in the life of the following:
(a) his or her child or grandchild;
(b) his or her spouse;
(c) any person on whom he or she is wholly or in part dependent for, or from whom he or she is receiving, support or education;
(d) his or her employee;
(e) any person in the duration of whose life he or she has a pecuniary interest.
38 (1) Subject to a provision to the contrary in the application or the policy, a contract does not take effect unless
(a) the policy is delivered to an insured, the insured's assign or agent, or to a beneficiary,
(b) payment of the first premium is made to the insurer or its authorized agent, and
(c) no change has taken place in the insurability of the life to be insured between the time the application was completed and the time the policy was delivered.
(2) If a policy is issued on the terms applied for and is delivered to an agent of the insurer for unconditional delivery to a person referred to in subsection (1) (a), it is deemed, but not to the prejudice of the insured, to have been delivered to the insured.
39 (1) If a cheque or other bill of exchange, or a promissory note or other written promise to pay, is given for the whole or part of a premium and payment is not made according to its tenor, the premium or part of it is deemed not to have been paid.
(2) If a remittance for or on account of a premium is sent in a registered letter to an insurer and is received by it, the remittance is deemed to have been received at the time of the registration of the letter.
40 (1) Except in the case of group insurance, an assignee of a contract, a beneficiary or a person acting on behalf of one of them or of the insured may pay any premium that the insured is entitled to pay.
(2) If a premium, other than the initial premium, is not paid at the time it is due, the premium may be paid within a period of grace of
(a) 30 days, or in the case of an industrial contract 28 days, from and excluding the day on which the premium is due, or
(b) the number of days, if any, specified in the contract for payment of an overdue premium,
whichever is the longer period.
(3) If the happening of the event on which the insurance money becomes payable occurs during the period of grace and before the overdue premium is paid, the contract is deemed to be in effect as if the premium had been paid at the time it was due, but the amount of the premium, together with interest at the rate specified in the contract, but not exceeding 6% per year, and the balance, if any, of the premium for the current policy year, may be deducted from the insurance money.
41 (1) An applicant for insurance and a person whose life is to be insured must each disclose to the insurer in the application, on a medical examination, if any, and in any written statements or answers furnished as evidence of insurability, every fact in his or her knowledge that is material to the insurance and is not so disclosed by the other.
(2) Subject to section 42, a failure to disclose, or a misrepresentation of, such a fact renders the contract voidable by the insurer.
42 (1) This section does not apply to a misstatement of age or to disability insurance.
(2) Subject to subsection (3), if a contract has been in effect for 2 years during the lifetime of the person whose life is insured, a failure to disclose, or a misrepresentation of, a fact required to be disclosed by section 41 does not, in the absence of fraud, render the contract voidable.
(3) In the case of a contract of group insurance, a failure to disclose, or a misrepresentation of, such a fact in respect of a person whose life is insured under the contract does not render the contract voidable, but if evidence of insurability is specifically requested by the insurer, the insurance in respect of that person is voidable by the insurer unless it has been in effect for 2 years during the lifetime of that person, in which event it is not, in the absence of fraud, voidable.
43 If an insurer fails to disclose or misrepresents a fact material to the insurance, the contract is voidable by the insured, but in the absence of fraud the contract is not by reason of such failure or misrepresentation voidable after the contract has been in effect for 2 years.
44 (1) This section does not apply to a contract of group insurance or of creditor's group insurance.
(2) Subject to subsection (3), if the age of a person whose life is insured is misstated to the insurer, the insurance money provided by the contract must be increased or decreased to the amount that would have been provided for the same premium at the correct age.
(3) If a contract limits the insurable age, and the correct age of the person whose life is insured at the date of the application exceeds the age so limited, the contract is, during the lifetime of that person but not later than 5 years from the date the contract takes effect, voidable by the insurer within 60 days after it discovers the error.
45 In the case of a contract of group insurance or of creditor's group insurance, a misstatement to the insurer of the age of a person whose life is insured does not of itself render the contract voidable, and the provisions, if any, of the contract with respect to age or misstatement of age apply.
46 (1) If a contract contains an undertaking, express or implied, that insurance money will be paid if a person whose life is insured commits suicide, the undertaking is lawful and enforceable.
(2) If a contract provides that in case a person whose life is insured commits suicide within a certain period of time the contract is void or the amount payable under it is reduced, if the contract lapses and is subsequently reinstated on one or more occasions, the period of time begins to run from the date of the latest reinstatement.
47 (1) This section does not apply to a contract of group insurance or to a contract made by a fraternal society.
(2) If a contract lapses and the insured within 2 years applies for reinstatement of the contract, if in that time the insured
(a) pays the overdue premiums and other indebtedness under the contract to the insurer, together with interest at the rate specified in the contract, but not exceeding 6% per year, compounded annually, and
(b) produces
(i) evidence satisfactory to the insurer of the good health, and
(ii) other evidence satisfactory to the insurer of the insurability
of the person whose life was insured,
the insurer must reinstate the contract.
(3) Subsection (2) does not apply if the cash surrender value has been paid or an option of taking paid up or extended insurance has been exercised.
(4) Sections 41 and 42 apply, so far as applicable and with the necessary changes, to reinstatement of a contract.
48 (1) An insured may in a contract or by a declaration designate the insured, the insured's personal representative or a beneficiary to receive insurance money.
(2) Subject to section 49, the insured may alter or revoke the designation by a declaration.
(3) A designation in favour of the "heirs", "next of kin" or "estate" of a person, or the use of words of like import in a designation, is deemed to be a designation of the personal representative of the person.
49 (1) An insured may in a contract or by a declaration, other than a declaration that is part of a will, filed with the insurer at its head or principal office in Canada during the lifetime of the person whose life is insured, designate a beneficiary irrevocably, and in that event the insured, while the beneficiary is living, may not alter or revoke the designation without the consent of the beneficiary, and the insurance money is not subject to the control of the insured or of the insured's creditors and does not form part of the insured's estate.
(2) If the insured purports to designate a beneficiary irrevocably in a will or in a declaration that is not filed as provided in subsection (1), the designation has the same effect as if the insured had not purported to make it irrevocable.
50 (1) A designation in an instrument purporting to be a will is not ineffective by reason only of the fact that the instrument is invalid as a will, or that the designation is invalid as a bequest under the will.
(2) Despite the Wills Act, a designation in a will is of no effect against a designation made later than the making of the will.
(3) If a designation is contained in a will and subsequently the will is revoked by operation of law or otherwise, the designation is revoked.
(4) If a designation is contained in an instrument that purports to be a will and subsequently the instrument if valid as a will would be revoked by operation of law or otherwise, the designation is revoked.
51 (1) An insured may in a contract or by a declaration appoint a trustee for a beneficiary and may alter or revoke the appointment by a declaration.
(2) A payment made by an insurer to the trustee for a beneficiary discharges the insurer to the extent of the payment.
52 (1) If a beneficiary predeceases the person whose life is insured, and no disposition of the share of the deceased beneficiary in the insurance money is provided in the contract or by a declaration, the share is payable
(a) to the surviving beneficiary, or
(b) if there is more than one surviving beneficiary, to the surviving beneficiaries in equal shares, or
(c) if there is no surviving beneficiary, to the insured or the insured's personal representative.
(2) If 2 or more beneficiaries are designated otherwise than alternatively, but no division of the insurance money is made, the insurance money is payable to them in equal shares.
53 A beneficiary may enforce in his or her own name, and a trustee appointed under section 51 may enforce as trustee, the payment of insurance money made payable to the trustee in the contract or by a declaration and in accordance with the provisions of it, but the insurer may set up any defence that it could have set up against the insured or the insured's personal representative.
54 (1) If a beneficiary is designated, the insurance money, from the time of the happening of the event on which the insurance money becomes payable, is not part of the estate of the insured and is not subject to the claims of the creditors of the insured.
(2) While a designation in favour of a spouse, child, grandchild or parent of a person whose life is insured, or any of them, is in effect, the insurance money and the rights and interests of the insured in it and in the contract are exempt from execution or seizure.
55 If a beneficiary
(a) is not designated irrevocably, or
(b) is designated irrevocably but has attained the age of 21 years and consents,
the insured may assign, exercise rights under or in respect of, surrender or otherwise deal with the contract as provided in it or in this Part, or as may be agreed on with the insurer.
56 (1) Despite the designation of a beneficiary irrevocably, the insured is entitled while living to the dividends or bonuses declared on a contract, unless the contract otherwise provides.
(2) Unless the insured otherwise directs, the insurer may apply the dividends or bonuses declared on the contract for the purpose of keeping the contract in force.
57 (1) Despite the Wills Act, if, in a contract or in an agreement in writing between an insurer and an insured, it is provided that a person named in the contract or in the agreement has, on the death of the insured, the rights and interests of the insured in the contract,
(a) the rights and interests of the insured in the contract do not, on the death of the insured, form part of the insured's estate, and
(b) on the death of the insured, the person named in the contract or in the agreement has the rights and interests given to the insured by the contract and by this Part and is deemed to be the insured.
(2) If the contract or agreement provides that 2 or more persons named in the contract or in the agreement, on the death of the insured, have successively on the death of each of them the rights and interests of the insured in the contract, this section applies successively, so far as applicable and with the necessary changes, to each of those persons and to his or her rights and interests in the contract.
(3) Despite any nomination made under this section, the insured may, before his or her death, assign, exercise rights under or in respect of, surrender, or otherwise deal with the contract as if the nomination had not been made, and may alter or revoke the nomination by agreement in writing with the insurer.
58 (1) If an assignee of a contract gives notice in writing of the assignment to the insurer at its head or principal office in Canada, he or she has priority of interest as against
(a) any assignee other than one who gave notice earlier in like manner, and
(b) a beneficiary other than one designated irrevocably as provided in section 49 before the assignee gave notice to the insurer of the assignment in the manner prescribed in this subsection.
(2) If a contract is assigned as security, the rights of a beneficiary under the contract are affected only to the extent necessary to give effect to the rights and interests of the assignee.
(3) If a contract is assigned unconditionally and otherwise than as security, the assignee has all the rights and interests given to the insured by the contract and by this Part and is deemed to be the insured.
(4) A provision in a contract to the effect that the rights or interests of the insured, or in the case of group insurance the group life insured, are not assignable is valid.
59 A group life insured may in his or her own name enforce a right given to him or her under a contract, subject to any defence available to the insurer against him or her or against the insured.
60 Except in respect of his or her rights as beneficiary, an infant who has reached the age of 16 years has the capacity of a person of the age of 19 years
(a) to make an enforceable contract, and
(b) in respect of a contract.
61 A beneficiary who has attained the age of 18 years has the capacity of a person of the age of 21 years to receive insurance money payable to him or her and to give a discharge for it.
62 If an insurer receives sufficient evidence of
(a) the happening of the event on which insurance money becomes payable,
(b) the age of the person whose life is insured,
(c) the right of the claimant to receive payment, and
(d) the name and age of the beneficiary, if there is a beneficiary,
it must, within 30 days after receiving the evidence, pay the insurance money to the person entitled to it.
63 (1) Subject to subsections (3) and (4), insurance money is payable in British Columbia.
(2) Unless a contract otherwise provides, a reference in it to dollars means Canadian dollars.
(3) If a person entitled to receive insurance money is not resident in British Columbia, the insurer may pay the insurance money to that person or to any other person who is entitled to receive it on the person's behalf by the law of the domicile of the payee.
(4) In the case of a contract of group insurance, insurance money is payable in the province or territory of Canada in which the group life insured was resident at the time he or she became insured.
64 Regardless of the place where a contract was made, an action on it may be brought in a court by a resident of British Columbia if the insurer was authorized to transact insurance in British Columbia at the time the contract was made or at the time the action is brought.
65 (1) Subject to subsection (2), proceedings against an insurer for the recovery of insurance money must not be commenced more than one year after the furnishing of the evidence required by section 62 or more than 6 years after the happening of the event on which the insurance money becomes payable, whichever period first expires.
(2) If a declaration has been made under the Survivorship and Presumption of Death Act, an action or proceeding to which reference is made in subsection (1) must not be commenced more than one year after the date of the declaration.
66 (1) Until an insurer receives at its head or principal office in Canada an instrument or an order of a court affecting the right to receive insurance money, or a notarial copy, or a copy verified by statutory declaration, of the instrument or order, it may make payment of the insurance money and is as fully discharged to the extent of the amount paid as if there were no instrument or order.
(2) Subsection (1) does not affect the rights or interests of any person other than the insurer.
67 If an insurer admits the validity of the insurance but does not admit the sufficiency of the evidence required by section 62 and there is no other question in issue except a question under section 3 of the Survivorship and Presumption of Death Act, the insurer or the claimant may, before or after action is brought and on at least 30 days' notice, apply to the court for a declaration as to the sufficiency of the evidence furnished, and the court may make the declaration or may direct what further evidence must be furnished, and on it being furnished may make the declaration or, in special circumstances, may dispense with further evidence.
68 (1) On making a declaration under section 67 or an order under the Survivorship and Presumption of Death Act, the court may make an order respecting the payment of the insurance money and respecting costs it deems just, and a declaration or direction or order made under this subsection is binding on the applicant and on all persons to whom notice of the application has been given.
(2) A payment made under an order under subsection (1) discharges the insurer to the extent of the amount paid.
69 Unless the court otherwise orders, an application made under section 67 or section 3 of the Survivorship and Presumption of Death Act operates as a stay of any pending action with respect to the insurance money.
70 If the court finds that the evidence furnished under section 62 is not sufficient or that a presumption of death is not established under the Survivorship and Presumption of Death Act, it may order that the matters in issue be decided in an action brought or to be brought, or may make such other order as it deems just respecting further evidence to be furnished by the claimant, publication of advertisements, further inquiry or any other matter or respecting costs.
71 (1) If an insurer admits liability for insurance money and it appears to the insurer that
(a) there are adverse claimants,
(b) there is no person who is capable of giving and authorized to give a valid discharge for the insurance money and who is willing to do so, or
(c) the insurance money has become unclaimed property under the Unclaimed Property Act,
the insurer may, without notice to any person but subject to subsection (2), apply to the court for an order for payment of the money into court.
(2) An application to the court under this section may not be made until
(a) in a case to which subsection (1) (a) or (b) applies, 30 days from the date of the happening of the event on which the insurance money became payable, or
(b) in a case to which subsection (1) (c) applies, 30 days after the insurance money became unclaimed property under the Unclaimed Property Act.
(3) On application under this section, the court may, on notice, if any, as it thinks necessary, make an order for payment of the insurance money into court.
(4) On payment into court of insurance money referred to in subsection (1) (c), Part 3 of the Unclaimed Property Act ceases to apply to that money.
(5) A payment made under an order under this section discharges the insurer to the extent of the payment.
72 Unless a contract or a declaration otherwise provides, if the person whose life is insured and a beneficiary die at the same time or in circumstances rendering it uncertain which of them survive the other, the insurance money is payable in accordance with section 52 (1) as if the beneficiary had predeceased the person whose life is insured.
73 (1) In this section, "installments" includes insurance money held by the insurer under section 74.
(2) Subject to subsections (3) and (4), if insurance money is payable in installments and a contract, or an instrument signed by the insured and delivered to the insurer, provides that a beneficiary does not have the right to commute the installments or to alienate or assign his or her interests in them, the insurer must not, unless the insured subsequently directs otherwise in writing, commute the installments or pay them to any person other than the beneficiary, and the installments are not, in the hands of the insurer, subject to any legal process, except an action to recover the value of necessaries supplied to the beneficiary or the beneficiary's infant children.
(3) A court may, on the application of a beneficiary and on at least 10 days' notice, declare that in view of special circumstances
(a) the insurer may, with the consent of the beneficiary, commute installments of insurance money, or
(b) the beneficiary may alienate or assign his or her interest in the insurance money.
(4) After the death of the beneficiary, his or her personal representative may, with the consent of the insurer, commute any installments of insurance money payable to the beneficiary.
74 (1) An insurer may hold insurance money
(a) subject to the order of an insured or a beneficiary, or
(b) on trusts or other agreements for the benefit of the insured or the beneficiary,
as provided in the contract, by an agreement in writing to which it is a party, or by a declaration, with interest at a rate agreed on in it or, if no rate is agreed on, at the rate declared by the insurer in respect of insurance money held by it.
(2) The insurer is not bound to hold insurance money as provided in subsection (1) under the terms of a declaration to which it has not agreed in writing.
75 If an insurer does not, within 30 days after receipt of the evidence required by section 62, pay the insurance money to some person competent to receive it or into court, the court may, on application of any person, order that the insurance money or any part of it be paid into court, or may make such other order as to the distribution of the money as it deems just, and payment made in accordance with the order discharges the insurer to the extent of the amount paid.
76 The court may fix without taxation the costs incurred in connection with an application or order made under section 71 or 75, and may order them to be paid out of the insurance money or by the insurer or the applicant, or otherwise as it deems just.
77 (1) If an insurer admits liability for insurance money payable to a minor or for insurance money payable to a trustee for a beneficiary who is a minor, the insurer must, within 30 days after receiving the evidence referred to in section 62,
(a) in the case of money payable to a minor other than a minor referred to in paragraph (b), pay the money to the Public Guardian and Trustee in trust for the minor,
(b) in the case of money payable to a minor who has attained the age of 18 years and who is capable and willing to give a discharge for the money, pay the money to the minor, or
(c) in the case of money payable to a trustee for a beneficiary who is a minor, pay the money to the trustee.
(2) An insurer who makes a payment under subsection (1) (c) must, within 30 days after the date of payment, give written notice to the Public Guardian and Trustee stating the name and address of the minor, the name and address of the trustee and the amount of the payment.
(3) Payment of the insurance money referred to in subsection (1) discharges the insurer if the payment is made in accordance with subsection (1).
78 If it appears that a representative of a beneficiary who is under disability may under the law of the domicile of the beneficiary accept payments on behalf of the beneficiary, the insurer may make payment to the representative, and any such payment discharges the insurer to the extent of the amount paid.
79 An officer, agent or employee of an insurer and a person soliciting insurance, whether or not he or she is an agent of the insurer, must not, to the prejudice of the insured, be deemed to be the agent of the insured in respect of any question arising out of a contract.
80 An insurer does not incur any liability for any default, error or omission in giving or withholding information as to any notice or instrument that it has received and that affects the insurance money.
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