The Alberta government is introducing legislation to allow another insurance option for businesses facing high rates.
It's called captive insurance and if passed, Alberta will join British Columbia as the only two provinces to allow captive insurance in Canada. "With limited availability in the insurance market, it's very difficult for some companies to find adequate insurance at reasonable prices," he said.
Captive insurance is an alternative to traditional market insurance which is wholly owned by those it insures. The province says it could lead to cheaper insurance rates, have potential tax benefits and allow for better risk management for businesses in several sectors. “Developing another option for insuring risks, including fire damage, will support our forestry job creators by allowing them more choices and flexibility to help keep their businesses running when unforeseen events occur," Jason Kripps, the president of the Alberta Forest Products Association, said in a news release.
Alberta-based captives will be able to insure a single entity, members of an association or a client with complex insurance needs, the province says. The new legislation to allow for captive insurance won't affect the increasing personal auto insurance rates being experienced in Alberta right now, Toews says. But he did point out skyrocketing school bus insurance rates may be mitigated by setting up a captive insurance company.
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