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Cannabis : The insurance industry is facing the legalization


Justine Montminy

17 October 2018 13:30

Photo : Unsplash

The legalization of cannabis in Canada has forced the insurance industry to adapt. Different actors have now finalized their preparation for the last few days.

The Journal of insurance, the insurance Bureau of Canada (IBC) has expressed that the legalisation of cannabis will not lead to real changes in the property and casualty insurance as this property is now legal.

Thus, in home insurance, such property will be treated like all the others. “If a consumer of cannabis becomes a regular smoker, however, it should notify its insurer as this may affect the assessment of the risk of fire in the same way as the cigarette. Either for cultivation or possession, it is important to comply with the provisions of the act, because the home insurance policy has an exclusion for any property deemed illegal, ” said Line Crevier, supervisor of technical affairs for the IBC in Quebec.

Impaired driving

The TRAY has however expressed his concerns regarding impaired driving. The organization believes that the provincial governments must invest sufficiently in security programs and awareness of the public in relation to the consumption of cannabis and the decision of the steering wheel.

“In motor insurance, the insurers have already established a set of rules as it relates to impaired driving. It can be assumed that they will apply in the same way as either alcohol or cannabis, which will be at the origin of impaired driving, ” adds Ms. Crevier.

No real changes in life insurance

Moreover, the legalization of cannabis as a recreational will not necessarily impact the sale of life insurance. Some insurers have concluded that the risks to the long-term health of the consumption of cannabis was lower than for cigarette smoking.

“Insured persons who consume cannabis will not be treated as smokers, however, the cannabis consumed must not contain tobacco. Smokers will consume several cigarettes in a day, the consumers of cannabis not necessarily. For the moment, the majority of insurers do not impose limits to the consumption of cannabis, ” explains Suzie Pellerin, assistant vice-president, public and government affairs for the Quebec representative of thecanadian Association of insurance companies of persons (CLHIA).

Updates to the standards and forms

The Centre for study of insurance operations (CSIO) announced that it has updated its data standards and forms to incorporate the legalization of cannabis earlier this week. These updates concern the collection of data related to the use of cannabis and the cultivation of the plant.

To do this, the CSIO has worked with several insurers, providers, members and with the TRAY so that all of the requirements of the industry are taken into account in order to subscribe to ” effectively life insurance policies “.

The canadian securities administrators (CSA) published a notice calling for more transparency with respect to the disclosure of information to the location of the issuers in the sector of the cannabis.

“Given the significant growth in the sector of the cannabis and of the considerable interest in which is worn, the investors must obtain transparent information about the financial performance of issuers and of the risks inherent in their activities,” says Louis Morisset, president of the CSA and president and ceo of the Autorité des marchés financiers. Our review [on issuers with various types of participation in the sector]reveals that there is need to enhance the quality of the information communicated in this regard, and we encourage issuers to use this publication to make improvements. “

Training for brokers of Ontario

Theinsurance brokers Association of Ontario (IBAO) has launched a training program for its brokers on the cannabis. The training course entitled ” Understanding Cannabis Legalization is available to members free of charge and key in the personal insurance and business insurance.

“As it is a novelty for all players in the sector, it is important that dealers are fully aware of every effect that the legalization of cannabis will have on the insurance,” said Colin Simpson, ceo of the IBAO.

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