Railway Third Party Liability Insurance Coverage Regulations (SOR/96-337)

Interpretation

1 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

2 Sections 3 to 5 of these Regulations apply only to persons proposing to

• (a) construct a railway; or

• (b) operate a railway that relates to a passenger rail service.

Determination of Adequate Third Party Liability Insurance Coverage

3 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.

4 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.

Information

• 5 (1) An applicant for a certificate of fitness for the proposed operation of a railway that relates to a passenger rail service or the proposed construction of a railway must provide the Agency with the information set out in Schedule 1.

• (2) A holder of a certificate of fitness for the operation of a railway that relates to a passenger rail service or the construction of a railway must provide the Agency with the information set out in Schedule 1, accompanied by a description of any changes to the information that was most recently provided under this section,

  • (a) before the expiry of any insurance coverage and as soon as feasible after the holder has arranged for new insurance coverage to replace it; and

  • (b) in any case, at least once a year.

• 6 (1) An applicant for a certificate of fitness for the proposed operation of a railway that does not relate to a passenger rail service must provide the Agency with the information set out in Schedule 2.

• (2) A holder of a certificate of fitness for the operation of a railway that does not relate to a passenger rail service must provide the Agency with the information set out in Schedule 2, accompanied by a description of any changes to the information that was most recently provided under this section,

  • (a) before the expiry of any insurance coverage and as soon as feasible after the holder has arranged for new insurance coverage to replace it; and

  • (b) in any case, at least once a year.

• (3) Despite subsections (1) and (2), the information set out in item 13 of Schedule 2 is not required to be provided by

  • (a) an applicant for a certificate of fitness, if there will be the minimum liability insurance coverage set out in Item 4 of Schedule IV to the Act for the proposed operation; or

  • (b) a holder of a certificate of fitness, if the minimum liability insurance coverage set out in Item 4 of Schedule IV to the Act is maintained in respect of the operation.