The respondent insurance company sued the appellant insurance broker to enforce an indemnity provision in their agreement, under which the broker agreed to cover losses on insurance programs it sold.
The broker argued the provision was an illegal and unenforceable contract of reinsurance because the broker was not licensed under the Insurance Act.
The trial judge found the agreement was not for insurance and enforced it.
The Court of Appeal dismissed the appeal, holding that even if the agreement violated the Insurance Act, it remained enforceable.
The licensing requirements exist to protect the public, not to allow sophisticated industry participants to avoid their contractual obligations.
