Non-admitted insurance: Non-admitted insurance is permitted in Canada. However, under the Excise Tax Act, all Canadian corporations that place insurance with a non-licensed insurer or through a broker outside Canada must pay a federal tax.
Premium tax paid by insured: The Federal Excise Tax requires an insured to pay a 10% tax when coverage is placed with a non-admitted insurer. Additionally, provincial tax, which varies by province, can be added on top. Otherwise, on admitted policies, the taxes are payable by the insurer and included in the premium.
Regulator: Insurers in Canada can be licensed at a national and/or provincial level. Federal companies are registered under the Insurance Companies Act of Canada and are regulated by the office of the Superintendent of Financial Institutions of Canada.
Overall risk rating: very low
