In 1916, an investigation was held by an Ontario government commission into matters relating to fire insurance in that province. Mr. John A. Robertson, secretary of the Canadian Fire Underwriters' Asso ciation, was asked by the commission to explain the essential difference between an ordinary combination controlling the price and output of commodities and an insurance combination.
16. Unlicensed insurance in Canada.—The amount of fire insurance carried on property in Canada by in surance companies not licensed to transact business in Canada was $235,770,000, in 1915, compared with $197,918,000 in 1912. The following table shows how the amount was divided among the various provinces : Section 139 of Canada's insurance act regulates un licensed insurance. It reads in part as follows: Notwithstanding anything in this act contained, any person may insure his property, or any property in which he has an insurable interest, situated in Canada, with any British or foreign unlicensed insurance company or under writers and may also insure with persons who reciprocally insure for protection only and not for profit ; and any prop erty insured or to be insured under the provisions of this section may be inspected and any loss incurred in respect thereof adjusted; provided such insurance is effected out side of Canada and without any solicitation whatsoever directly or indirectly on the part of such company, under writers or persons by which or whom the insurance is made; and provided further that no such company, .or underwriters
or persons shall within Canada advertise their business in any newspaper or other publication or by circular mailed in Canada or elsewhere, or maintain an office or agency therein for the receipt of application or the transaction of any act, matter or thing relating in any way to their said business.
When the act was being revised in 1910, the licensed insurance companies protested against the practice of unlicensed insurance, but the above legislation was apparently thought to be sufficiently protective.
This unlicensed insurance provides some competi tion but it also allows financially weak companies to write business in Canada. Not infrequently have fires occurred, the losses arising from which have not been paid by unlicensed companies. During an in vestigation into fire insurance matters in Ontario in 1916, the suggestion was made that the ,government put a tax on the export of premiums from that prov ince. This would act as a check upon the volume of unlicensed insurance and, so far as provincial govern ments are concerned, afford information as to the amount of such insurance carried in the respective provinces. The tendency in Canada is for greater control of unlicensed fire insurance. One or two of the Canadian provinces have imposed a 1 per cent tax upon the amounts of losses recovered from these unlicensed concerns.