Bill 76: The Captive Insurance Companies Act, 2021 Written By: Andrew Kim, Articling Student I. Introduction On October 27, 2021, the Alberta Government introduced their plans to pass Bill 76, the Captive Insurance Companies Act (the “Act”). The regulatory regime is expected to be finalized in the coming spring of next year, Spring 2022. This article outlines what the Act is about, considers how the Act may impact different industries, and highlights how other jurisdictions have dealt with similar legislation. If passed, Alberta would become only the second province, after British Columbia, to permit captive insurance. II. The Act The Act seeks to introduce a regime of captive insurance to Alberta. Broadly speaking, captive insurance permits an entity or organization to insure itself against risk through its own subsidiary insurance company, rather than obtaining insurance from a third-party commercial insurance provider. According to Finance Minister, Travis Toews, the purpose of the Act is to provide alternative insurance coverage for industries where insurance coverage is too costly or coverage is difficult to obtain. III. Impacted Sectors Finance Minister Toews stated the following industries were struggling to find insurance in the current market and that this is impacting the ability of these industries to create jobs and invest in projects across the province: a) energy, b) agriculture, c) forestry, and d) and manufacturing. Accordingly, the Act could have impacts in these business sectors. Further, the Act could be utilized in other public sectors, such as school boards, where facility insurance can be challenging or expensive to obtain the appropriate coverage. Captive companies often then seek to further transfer or reinsure the risks to other traditional reinsurance companies, so there could be opportunities for the reinsurance market. IV. Other Jurisdictions with Similar Legislation The Act is seemingly inspired by similar legislation in British Columbia known as the Insurance (Captive Company) Act, RSBC 1996, c. 227, under which over a dozen companies were created including the BC Veterinary Captive Insurance Company. The BC Veterinary Captive Insurance Company provides the members of the College of Veterinarians of BC with individual coverage of up to $2 million per claim and $2 million per policy period. Captive insurance also exists in other foreign jurisdictions, such as the States of Delaware and Vermont in the United States, along with other off-shore jurisdictions such as Bermuda and Barbados. If you have any questions or concerns regarding the above amendments, feel free to contact Adrian or our Insurance Law Practice Group. Disclaimer: This article is to be used for educational and non-commercial purposes only. Parlee McLaws LLP does not intend for this article to be a source of legal advice. Please seek the advice of a lawyer before choosing to act on any of the information contained in this article.