April 13, 2018 11:30
The limitation of the subrogation of the insurer, as provided in bill 150, leads to a contradiction to other measures contained in the proposed text, emphasized Maxime Laflamme-Leblond, a lawyer for the firm of Papineau Lawyers, during the symposium in spring of the Grouping of the managers and owners of Québec (RGCQ).
The bill 150 adds the article 1075.1 to the civil Code of Québec, which stipulates that ” an insurer cannot be subrogated to the rights of the union against an administrator, a co-owner or of a person who is a member of the house of the latter, unless the damage is due to willful misconduct or gross negligence.”
In insurance, subrogation is a transaction in which an insured seeks damages caused by another co-owner to his own insurer and then the insurer is subrogated to the rights of the insured to claim the compensation paid to the co-owner liable for damages.
“The article equates all people living in the condominium in a great family, so if a co-owner, an admin, or a part of the family of one of them, the article comes to say that the insurer of the union may not claim the money to the person liable for damage unless the fault is intentional or gross negligence,” said mr. Laflamme-Leblond. He added, however, that the union could sue for is to recover the damages it has cost to produce.
Greater financial risk for insurers
However, the bill 150 also provides that the insurers must maintain a level of frankness reasonable, although no detail was provided to know what a franchise is reasonable, or how to calculate it. The government will specify these terms and conditions by way of regulation once the bill is passed.
In this situation, the insurers are to assume a greater financial risk, knowing that they will have to pay damages if a claim occurs without the possibility to initiate proceedings against the co-owner responsible, ” said mr. Laflamme-Leblond. “The chances that the insurer pays versus the odds that he recovers his money are unbalanced. There is much more chance that the money out of its coffers that it does. “
Impact on insurance premiums
The lawyer was also questioned to know what will be the potential impacts on the requirement of the franchise reasonable. “Is that the situation will not lead to an increase in correlative insurance premiums ? “
“Although the article 1075.1 “codifies” something of a use that had the insurers not to pursue them, the impact will be variable depending on the disaster, said mr. Laflamme-Leblond in interview to the Newspaper of insurance. It is one thing that insurers do not continue between them for water damage of $ 5,000, $ 10,000 or even $ 15,000, for example in the case of a disaster on several levels, insurers could find themselves with a financial burden very heavy, without being able to sue the officers to recover at least a part of what they have paid to their insured. “
Mandatory appointment of a trustee
Bill 150 also makes mandatory the appointment of a trustee in case of a loss considered significant according to criteria which will be determined by government regulation. By contrast, the draft law does not specify who can be determined as trustee. The only description available states that it must be a natural person able to fully exercise their rights and to be a legal person authorized by the law.
“You need to understand that the law has not thought good to determine who has the qualifications to be a trustee. It can be either determined by the board of directors or the declaration of co-ownership “, he explained.
Mr. Laflamme-Leblond suggested that the trustee be impartial and independent, has subscribed a civil liability insurance, or be a member of a professional order, has specific skills and has knowledge of the right and the middle of the building.