What does the Insurance Companies Act primarily regulate?

The Insurance Companies Act is primarily focused on the federal licensing and supervision of insurance companies. This Act outlines the framework within which insurance companies must operate in Canada, ensuring that they are properly licensed to offer insurance products and that they adhere to regulations that safeguard the financial stability of the insurance sector.

By regulating the licensing process, the Act helps maintain consumer confidence in the insurance industry, as only companies that meet specific standards and requirements can legally conduct business. This includes ensuring that companies have sufficient capital reserves and that they follow statutory requirements related to solvency and consumer protection.

The other options refer to aspects that, while important in the context of insurance, are not the primary focus of the Insurance Companies Act. Taxation policies and claims processing are governed by different sets of regulations, and although insurance sales practices are essential for consumer interaction, they fall outside the scope of the Act's main purposes. Therefore, the emphasis on federal licensing and supervision is what makes option B the correct answer.