Reinsurers and reinsurance brokers are not required to register with Canadian supervisory authorities but may choose to do so. Canada's direct insurers are subject to regulatory controls in their use of reinsurers. For direct insurers, an alternative to reinsurance is the formation of insurance pools under which direct insurers agree to share certain types of risks. Examples of insurance pools in Canada include the Canadian Industrial Risk Insurers and the Canadian Aviation Insurance Group. These public companies account for about 32 per cent of the Canadian auto insurance market.
Some firms also participate in various self-insurance arrangements.
One such mechanism is a reciprocal insurance exchange, whereby a group in a related activity agrees to share certain kinds of risk. In Canada, a number of school boards, hospitals and universities have established such reciprocal exchanges. Captive insurers are firms, typically owned by non-insurers, which undertake some or all of their owners' insurance business. Under this act, captive insurers can benefit from arrangements such as less onerous licensing requirements, which allow for lower minimum capital. Other captive insurers established by Canadian companies are domiciled in offshore centres, such as Bermuda or the Bahamas, on the condition that the captives limit themselves to providing a reinsurance function to the Canadian market.