Canada’s federal government has taken a major step to strengthen the protection of insurance policyholders by approving the Property and Casualty Insurance Compensation Corporation (PACICC) to establish a ‘bridge insurer,’ officially named PACICC-SIMA General Insurance Company (PGIC). This move is designed to help PACICC manage potential insolvencies of insurance companies and safeguard consumers from financial loss.
The bridge insurer will function as a dormant entity, ready to be activated only if a qualifying insurance company faces financial distress. Any decision to bring PGIC into action will require agreement from PACICC’s board, the Office of the Superintendent of Financial Institutions (OSFI), and the relevant provincial regulators. Activation will follow strict threshold criteria to ensure a coordinated and effective response.
PACICC’s initiative mirrors a model already in place in Canada’s life insurance sector, where Assuris maintains a similar ‘shell’ bridge insurer to support policyholders in times of insolvency. Experts note that having a bridge insurer is considered an international best practice by the International Association of Insurance Supervisors (IAIS) and forms a key part of a robust insurance solvency resolution framework.
This development gives Canadians greater confidence in the stability of the insurance market, ensuring that policyholders remain protected even in rare cases of insurance company failure.
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