To:           All Property & Casualty Insurance Companies Writing Automobile Insurance

From:      Chlora Lindley-myers, Supervisor, Property & Casualty Section

Re:          Canadian PAU Filings

Date:       August 26, 1997

The Missouri Department of Insurance has recently been notified by the Superintendent of Financial Institutions for the Province of British Columbia that some insurers who are incorporated in the United States and who have insureds who drive in Canada may be in violation of Canadian minimum financial responsibility laws.

In order to protect the citizens of Missouri traveling in their private passenger automobiles in Canada, every insurer is required to file a Canada Non-Resident Inter-Province Motor Vehicle Liability Insurance Power of Attorney and Undertaking (PAU) (PDF). By executing and filing a PAU with the Superintendent in British Columbia-Canada's repository for such forms-an insurer issuing policies of automobile liability insurance undertakes:

1. To file an appearance in the province or territory of Canada in which a civil action has been commenced against it or its insured as a result of its insured's involvement in a motor vehicle accident;
2. To decline to pursue any defense to the action which cannot be pursued by the insurer in the jurisdiction in which the action has been commenced; and
3. To satisfy the judgment resulting from a civil action against it or its insured to at least the minimum level of liability insurance that is required in the Canadian jurisdiction in which the action arose.

An insurer from the United States who files a PAU with the Superintendent's office will be given a supply of Canada Non-Resident Inter-Province Motor Vehicle Liability Insurance Card. These cards are issued only to those automobile insurers who have filed a PAU with the Superintendent's office. Insurers then distribute these card to their insureds.

If a police officer in Canada determines that a Missouri resident does not have this non-resident insurance card, the Missouri resident runs the risk of being fined for driving in Canada without adequate insurance or having his or her vehicle impounded until the appropriate amount of liability insurance is purchased. Additionally, because the minimum automobile liability insurance requirement in the majority of Canadian jurisdictions is $200,000, an insured whose insurer has not filed a PAU may face the risk of personally having to satisfy a civil judgment for an amount that significantly exceeds the coverage that the insured has under his or her automobile liability insurance policy.

It is very important that every insurance company file a PAU form to protect Missouri citizens driving in Canada; please refer to the sample PAU form attached and marked Exhibit A. If your company has not complied with this requirement we are asking that you do so immediately. To obtain a PAU application package, please contact Ms. Terri Robertson at (604) 660-0134. If you require more detailed information, please contact Ms. Linda Roggeveen, Senior Manager of Insurance, at (604) 660-0116.