Railway Third Party Liability Insurance Coverage Regulations

SOR/96-337

CANADA TRANSPORTATION ACT

Registration 1996-07-03

Railway Third Party Liability Insurance Coverage Regulations

P.C. 1996-1063 1996-07-03

Order No. 1996-R-275

Pursuant to subsection 92(3) of the Canada Transportation ActFootnote a, the Canadian Transportation Agency hereby makes the Railway Third Party Liability Insurance Coverage Regulations in accordance with the schedule hereto.

July 2, 1996

His Excellency the Governor General in Council, on the recommendation of the Minister of Transport, pursuant to subsection 36(1) of the Canada Transportation ActFootnote a, hereby approves the annexed Railway Third Party Liability Insurance Coverage Regulations, made by the Canadian Transportation Agency.

Interpretation

 The definitions in this section apply in these Regulations.

Act

Act means the Canada Transportation Act. (Loi)

applicant

applicant means a person who makes an application to the Agency for a certificate of fitness or for the variation of a certificate. (demandeur)

deductible

deductible means the amount of risk for which an applicant retains financial responsibility under an insurance contract. (franchise)

insurer

insurer means an insurance company that provides third party liability insurance coverage to an applicant and includes an insurance company that is wholly owned by the parties it insures. (assureur)

named perils pollution

named perils pollution means risks that are set out in an insurance contract that are associated with seepage or pollution or contamination resulting from but not limited to collision, overturning, derailment, upset, hostile fire, lightning or explosion or other railway related accidents. (risques de pollution désignés)

self-insurance

self-insurance means self-insured retention and deductible. (autoassurance)

self-insured retention

self-insured retention means the amount of risk for which an applicant takes financial responsibility, outside of an insurance contract. (affectation pour autoassurance)

third party liability insurance coverage

third party liability insurance coverage means financial compensation provided for in a contract entered into between an applicant and an insurer, or in the case of self-insurance, financial compensation provided by the applicant, in respect of the following matters arising out of an applicant’s proposed construction or operation of a railway, including a proposed temporary construction or operation of a railway resulting from unforeseen or exceptional circumstances:

  • (a) third party bodily injury or death, including injury or death to passengers,

  • (b) third party property damage, excluding damage to cargo, and

  • (c) named perils pollution. (assurance responsabilité civile)

Application

 These Regulations apply to any person proposing to

  • (a) construct a railway; or

  • (b) operate a railway either over and on their own railway or over and on the railway of another railway company, including operating over and on a portion of the railway of another railway company.

Determination of Adequate Third Party Liability Insurance Coverage

 Third party liability insurance coverage is adequate if there is

  • (a) sufficient insurance, including self-insurance, to compensate for the following matters that may arise out of an applicant’s proposed construction or operation of a railway, including a proposed temporary construction or operation of a railway resulting from unforeseen or exceptional circumstances:

    • (i) third party bodily injury or death, including injury or death to passengers,

    • (ii) third party property damage, excluding damage to cargo, and

    • (iii) named perils pollution;

  • (b) a written confirmation provided to the Agency by the applicant that the applicant has fully disclosed to the insurer the nature and extent of the proposed construction or operation of the railway and any associated third party liability risks; and

  • (c) full disclosure to the Agency by the applicant of the amount of self-insured retention and of the third party liability risks that may arise from the proposed construction or operation of the railway.

 In determining whether third party liability insurance coverage is adequate, the Agency shall

  • (a) examine the risks associated with the proposed construction or operation of the railway by considering information that is provided by the applicant, including

    • (i) passenger ridership,

    • (ii) passenger and freight train miles,

    • (iii) volume of railway traffic,

    • (iv) class and volume of dangerous goods transported by rail,

    • (v) types of population areas served,

    • (vi) number of level crossings,

    • (vii) speed of trains,

    • (viii) train crew training,

    • (ix) method of train control, and

    • (x) overall safety record of the applicant; and

  • (b) in the case of self-insurance, assess the financial capability of the applicant to sustain the level of self-insurance, on the basis of the following information provided by the applicant:

    • (i) the three most recent annual financial reports that have been filed with the Agency pursuant to section 344 of the Railway Act, as that section read immediately before the coming into force of the Act, or with the Minister of Transport in accordance with any applicable regulations made pursuant to section 50 of the Act,

    • (ii) where the applicant does not file the reports referred to in subparagraph (i), audited financial statements for the three most recent complete fiscal years, or

    • (iii) where the applicant does not have the information referred to in subparagraph (i) or (ii), other financial information that establishes the applicant’s financial capability to sustain the self-insurance.

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