Alberta is rewriting the rules on auto insurance - and the changes hit insurers where it counts: claims, benefits, and medical assessments.
Bill 27, the Financial Statutes Amendment Act, 2026, passed its first reading on April 1 and adjourned its second reading on April 15 in the province's 31st Legislature. Sponsored by Horner and introduced by the President of Treasury Board and Minister of Finance, the bill touches several pieces of legislation, but the portion that matters most to the insurance industry is a top-to-bottom rework of the Automobile Insurance Act.
Here is what is changing, and why it matters.
The biggest shift is in how medical assessments work. Right now, an insurer can require a claimant to undergo a medical examination by a health care practitioner when and as often as the insurer reasonably requires. Under the new framework, that changes. If an insurer wants a claimant assessed, it has to apply to the Superintendent, who picks the assessor in accordance with the regulations. The assessor writes a report, and the insurer has to use it for a purpose laid out in the regulations. And there is no alternative route: subject to the regulations, the bill states that insurers cannot require any other kind of injury-related assessment or examination outside this process.
That is a notable change for carriers that have long had a hand in managing the assessment process themselves.
On the benefits side, the bill lays out a restructured no-fault compensation system under the heading "Benefits payable regardless of fault." Unless otherwise provided for in the Act or the regulations, an insurer must, under a motor vehicle liability policy, provide compensation to or in respect of a person who sustains bodily injury or death as a result of an accident, in accordance with the Act and the regulations, regardless of whether the person is at fault. The bill sets up a clear order for determining which insurer is on the hook. It starts with the insurer under whose policy the person is the named insured, their spouse or adult interdependent partner, a dependant, or a specified driver of an automobile identified in the policy. If compensation is unavailable from that insurer, responsibility shifts to the insurer of the automobile the person was in, then to the insurer of any other automobile involved, and finally to the Motor Vehicle Accident Claims Act.
There is also a new product option in the mix. Insurers can offer policies that provide "excess compensation" — amounts exceeding the maximums established under the Act for expenses and benefits. But any insurer that does so must also offer a standard policy providing compensation only in the amounts established under the Act. And excess coverage is limited to the named insured, their spouse or adult interdependent partner, and dependants of the named insured.
Several definitions that drive day-to-day claims work are being rewritten. "Accident" now refers to an event "arising from the use or operation of an automobile," replacing language that said "caused by the use or operation of an automobile." "Insured" is redefined as a person who, under section 5, is entitled to compensation in respect of their bodily injury or death sustained as a result of an accident, moving away from the older phrasing that referenced entitlement to compensation under Part 2. "Permanent impairment" is redefined to mean a bodily injury prescribed as a permanent impairment in the regulations, replacing the previous definition, which included a permanent anatomicophysiological deficit, a permanent disfigurement, or any other prescribed physical or mental impairment of a permanent nature.
A new term also enters the picture: "care recipient," defined as a person, in relation to an insured, who is under 16 years of age or regularly unable to hold employment, and to whom the insured provides care. And the definition of "non-earner" picks up an added exclusion - an insured who has not held employment in the two years immediately preceding the date of the accident and who, in an insurer's opinion, would not have held employment in the future had the accident not occurred, is no longer covered under that category.
On the other side of the ledger, insurers do pick up expanded authority when it comes to denying or reducing claims. The existing law already allowed insurers to reduce, suspend, terminate, or refuse to pay compensation in cases involving wilful causation, convictions for prescribed Criminal Code or Traffic Safety Act offences tied to the insured's use or operation of an automobile, knowingly providing false or inaccurate information material to the claim, failure to comply with prescribed requirements, and prescribed circumstances. The new version goes further. It adds situations where the insured has been charged - not just found guilty - with prescribed offences. It covers occupants found guilty of or charged with prescribed offences regardless of who caused the accident. And it brings in administrative penalties issued under prescribed provisions of the Traffic Safety Act, as well as equivalent penalties from other Canadian jurisdictions and the United States.
The Minister, meanwhile, gains new authority over treatment standards. A new provision allows the Minister to establish codes, guidelines, methods, practices, standards, or bodies of rules governing the diagnosis and treatment of particular bodily injuries and the health care services to which an insured is entitled to have paid or reimbursed. Insurers are required to comply with those standards and to pay for or reimburse any health care service that the insured is entitled to receive under them.
Income replacement benefits also see adjustments. The bill introduces new triggers for when benefits stop, including when an insured becomes able to hold a prescribed employment, when one year has elapsed from the day the insured was able to hold a prescribed employment, or when the insured holds a prescribed employment.
And for out-of-province accidents, the bill clarifies insurer subrogation rights. An insurer is subrogated to the insured's rights and can recover the amount of compensation paid from a person who is a non-resident of Alberta, was driving an automobile registered or required to be registered in another jurisdiction at the time of the accident, and was at fault for the accident under the law of the place where the accident occurred.
All of this adds up to a substantial rework of how auto insurance operates in Alberta. The bill touches claims handling, product design, benefit calculations, medical oversight, and compliance obligations. It is still working its way through the legislature, but the scope of change is already clear. Insurers operating in the province will want to start preparing now.
