Section 114 of the Principal Act is amended by omitting subsection (4) and substituting the following subsections:

(3A)  If the Trust is of the opinion that there is a reasonable possibility that the person lodging the claim may recover part or all of the loss to which the claim relates, the Trust may impose terms or conditions on the acceptance of the claim.

(4)  If the Trust rejects a claim or imposes terms or conditions on the acceptance of a claim, it must notify in writing the person lodging the claim of the reasons for the rejection or the imposition of the terms or conditions.