A looming trade war with the U.S., combined with the most natural catastrophe claims losses in Canada’s history last year, may be a dark cloud with a silver lining.
Dark times are galvanizing Canada’s P&C insurance industry to make inter-Canadian adjuster mobility a regulatory priority. It’s done that before, but timing may finally be on the industry’s side.
Some impetus comes from a Jan. 11, 2025 open letter by former Canadian prime minister Jean Chretien published in the Globe & Mail urging Canadian political leaders to make the country less vulnerable to cross-border trade restrictions. He wrote: “There are more trade barriers between provinces than between Canada and the United States. Let’s launch a national project to get rid of those barriers!”
Canada’s P&C independent adjusting firms have been making the case for national reciprocal adjusting licensing for decades. But recently, a coalition of the industry’s associations ramped up lobbying efforts to move the ball forward.
The coalition includes Insurance Bureau of Canada, the Canadian Association of Mutual Insurance Companies, the Canadian Insurance Claims Managers Association, the Canadian Independent Adjusters’ Association, the Insurance Brokers Association of Canada, the Canadian Association of Direct Relationship Insurers and the Omnia Adjusters Cooperative.
How it works
Under a reciprocal licensing regime, “if an adjuster is licensed in one province, their license is recognized across the country,” the coalition wrote to Canadian insurance regulators in September 2024. “As it stands, each Canadian [provincial] jurisdiction has its own rules and requirements for adjusters. There is simply no reasonable public policy rationale justifying this type of fragmented approach to licensing.”
The industry says a national reciprocal licence regime is especially important in the face of increased climate risk, which is expected to cause more NatCat claims in the future.
“When you think about fair treatment of customers and good public policy outcomes, and having claims dealt with in a timely manner and properly, one would think that [inter-provincial adjuster mobility] would be a step in that direction,” says Marisa Coggin, a partner in the corporate and regulatory group at Dentons LLP. She spoke at the firm’s insurance conference in Toronto last November.
Canada’s P&C insurers handled 273,000 NatCat claims in 2024, far in excess of the previous record of 197,000 in 2016. Last year, more than 228,000 NatCat claims happened in less than a month.
Patchwork regulation
To date, provincial regulators have offered piecemeal solutions to allow adjusters from one area of Canada to handle Cat claims in other Canadian jurisdictions.
During the Calgary hailstorm and Jasper wildfire in 2024, for example, the Alberta Insurance Council quickly approved expedited adjuster licensing of non-resident adjusters.
In Quebec, the Autorité des marchés financiers eased its rules and allowed insurers to use supernumeraries as claims adjusters, including those from other Canadian provinces and from the U.S.
A supernumerary insurance adjuster is a person who is not certified as a claims adjuster but is temporarily allowed to act as one.
And the Financial Services Regulatory Authority of Ontario implemented temporary measures allowing insurers to use claims adjusters who held licences outside the province.
Beyond temporary
But these solutions are all temporary, sources tell CU.
“And then the crisis passes, and we’re back onto [other regulatory priorities], whatever the flavour of the day is,” Arthur Hamilton, a counsel in Dentons’ litigation dispute resolution group, observed during the firm’s insurance conference in Toronto.
Four years ago, independent adjusting firm CRU Group needed teams to deal with what was then Calgary’s largest hail claim event. Noting Cat adjusters are much like first responders, they brought U.S. adjusters into Canada to help.
Generally, Canadian employers hiring temporary foreign workers must get a labour market impact assessment showing no Canadian worker is available for the job. The United States-Mexico-Canada Agreement governing free trade includes an exception to this rule for dozens of professionals; among them, ‘disaster relief insurance claims adjuster[s].’
But faced with U.S. protectionist trade policies, IBC is sounding the alarm that bringing in U.S. adjusters to may become a restricted option.
“As noted by the Fraser Institute, this [trade] uncertainty is creating a growing imperative for Canadian policymakers to move swiftly to protect the Canadian economy from the potential impacts of protectionist policies,” Margot Whittington, senior policy advisor at IBC, wrote in a December 2024 blog post. “One step Canadian policymakers can take is to eliminate interprovincial barriers to trade, capital flows, and labour mobility.
“Specifically, should a Canadian-US trade dispute pose limitations on Canada’s ability to tap into American adjuster capacity, Canadian adjuster capacity will be tested like never before.”
This article is excerpted from one that appeared in the February-March print edition of Canadian Underwriter. Feature image by iStock/scibak
