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Letter to the Editor

Canada's Markham General to Cancel All Auto Insurance Policies

Markham General Insurance Company has told its brokers that all existing policies for auto insurance will be cancelled as of 12:01 a.m. on June 15, 2002.

Rumors had been circulating in the industry that such move might be taken, after Markham General's financial woes came to light just weeks ago. The company was suffering a capital crunch, having written large amounts of business, specifically in Ontario auto insurance, where losses have been heavy. Markham General was asked to go out of business by the Financial Service Commission of Ontario because its cash reserves fell below legal requirements.

As many as 80,000 policyholders could be affected, and the Hamilton Spectator reported that some 12,000 were Hamilton residents. Policies of Markham General Insurance Co. were sold by a number of brokers, including the much-advertised Believer Plus. Policies were also sold by Mitchell and Abbot Group of brokers, Dalton Timmis Insurance of Hamilton and Tripemco Insurance of Burlington. Brokers are now scrambling to find new carriers for their clients for the period after June 15.

Although Markham General says it still has enough money to make pro rata refunds for policies cancelled mid-term and to pay claims for accident damage and injuries, repair shops are being advised that they should consider having the customers of Markham General pay for the repairs and the customer receive compensation from the insurer. One shop has advised the CIAG office that he has had three calls in the last two days asking if he would repair a car for Markham General, indicating a reluctance in the collision repair marketplace to work for the insurer.

In other insurance news, Royal & SunAlliance Insurance Company of Canada says it will not stand by while an imposter entity advertising itself as "Royal & SunAlliance International Loans and Insurance" tries to attract business. The insurer advises that it is working with police and financial service regulatory in tracking those behind the imposter entity which is advertising their services through newspapers and over the internet. Products offered are auto and "gap" insurance.

Shops are strongly cautioned to immediately advise Royal & SunAlliance Insurance Company of Canada if a repair is requested from a customer with this similarly named group showing as an insurer.

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