Alberta Issues Guidance on Motor Vehicle Protection Products
On December 23, 2024, the Alberta Superintendent of Insurance (the “Superintendent”) in conjunction with the Alberta Insurance Council (“AIC”) issued bulletins regarding the regulation of motor vehicle protection products (collectively, the “Bulletins”). These clarifications address the treatment of various products, outlining compliance requirements for Original Equipment Manufacturers (OEMs), automobile dealerships, and third-party providers.
Key Highlights of the Bulletins
The Superintendent’s Bulletin focuses on regulatory approval requirements, specifically concerning contracts categorized as automobile insurance. These contracts must be approved by the Superintendent, with corresponding rating programs approved by the Alberta Automobile Insurance Rate Board.
The AIC’s Bulletin details the licensing requirements necessary for selling certain motor vehicle warranty products considered insurance products.
Categories of Motor Vehicle Protection Products
The Bulletins provide specific categorization of motor vehicle protection products:
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(i) Motor Vehicle Warranty Contracts: These contracts address inherent flaws in vehicle workmanship or materials. Those issued by OEMs or their wholly-owned subsidiaries, or by repair facilities covering their own workmanship, are typically not classified as insurance. However, third-party motor vehicle warranty contracts are considered insurance.
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(ii) Motor Vehicle Dealership Loyalty Programs: These programs provide discounts on future vehicle replacements if the original vehicle is damaged or lost. Because they may indemnify consumers against risks like theft or collision the Superintendent classifies these as insurance. Debt waivers backed by finance companies, are not considered insurance.
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(iii) Ancillary Motor Vehicle Protection Products: The Superintendent’s Bulletin lists several products considered as insurance, specifying the associated insurance class outlined in the AIC’s Bulletin.
Description Class of Insurance Dealership loyalty programs providing discounts on replacement vehicles due to damage or loss. Property insurance Deductible reimbursement and credits in cases of motor vehicle loss. Property insurance Non-manufacturer tire and rim warranties. Automobile insurance Glass protection products covering some or all windshield replacement costs. Automobile insurance Anti-theft products with payment promises in case of theft or non-recovery of the vehicle. Automobile insurance Key fob replacement Property insurance Rental payment provided in conjunction with a related vehicle protection product. Same class as the primary vehicle protection product
Licensing Requirements
Motor vehicle protection contracts classified as insurance need to be underwritten by insurers licensed to conduct the relevant insurance class in Alberta. These must be sold by licensed insurance agents or by employees of dealerships or equipment dealers possessing a Restricted Certificate of Authority (RCA) of the appropriate type. Available RCA types include equipment warranty insurance or dealership loyalty programs and vehicle protection products. Further details on the application procedures are available in the AIC’s Bulletin.
Service Plans: Exclusions
The Superintendent has excluded motor vehicle and roadside service plans covering minor repairs due to expected wear and tear from the insurance definition. Examples include repairs for minor scrapes, dents, chips, cuts, tears, and scratches, as well as windshield, tire and rim repairs, oil changes, and replacement of wiper blades or air filters. This aspect differentiates the Superintendent’s Bulletin from the recent Regulatory Statement by the British Columbia Financial Services Authority (BCFSA), which does not include a similar exemption.
Path Forward for Industry
OEMs, dealers, and third-party providers are advised to thoroughly review their products to guarantee that they comply with the new regulatory interpretations. Providers face the decision of whether to modify or pull non-compliant motor vehicle protection products from the market or collaborate with a licensed Alberta insurer to underwrite the contracts. This new compliance burden is placed upon an industry currently affected by the BCFSA’s April 2024 Regulatory Statement.
Disclaimer: This overview is for informational purposes only and does not constitute legal advice. Readers should seek specific legal counsel regarding their individual circumstances. This information is current as of 2025. McMillan LLP remains the copyright holder.
