Insurable Interest Canadian Insurance Blog

Blake Wolfe | October 28, 2020 Alberta’s Local Authorities Pension Plan is cancelling its coordination option, citing regret and confusion from plan members who mistakenly accessed the feature without fully understanding the financial implications. According to a statement by the LAPP, coordination will be discontinued for members who start their pension on or after Jan. 1, 2021. It noted the option’s elimination will have no financial impact on the plan. Originally intended for individuals with a shortened life expectancy, coordination allows plan members to receive a temporary increase to their pension until they turn 65, after which the increase is removed and the pension is reduced permanently. Read: Downside protection strategy saves LAPP $1.9 billion Phil Rivard, vice-president of pension policy and funding at the LAPP, says the decision was made following several years of complaints and concerns by members who mistakenly took the option, in some cases out of a desire to front-load their pension. And with pension unlocking provisions now included in Alberta’s Employment Pension Plans Act, there’s little reason for the LAPP to continue offering coordination, according to a statement from the plan. “The theory of coordination makes a lot of sense, but the issue we run into is that reality isn’t...

Staff  | October 28, 2020 Stikeman Elliott LLP is appointing Mark Firman as counsel in its tax and pensions and benefits groups in Montreal. In his career, Firman has advised on all aspects of pension and executive compensation law, including pension fund investments, plan governance and administration issues, stock option and other equity-based incentive plans and corporate governance relating to executive compensation design and disclosure.  Read more People Watch news For the past four years, he was legal counsel at the Ontario Teachers’ Pension Plan. Previously, he was an associate in pensions, benefits and executive compensation at McCarthy Tétrault LLP.  “Mark is a leading Canadian pensions and executive compensation lawyer with a wealth of experience that will complement our strong pensions and benefits group,” said Warren Katz, managing partner in the law firm’s Montreal office, in a press release. “Mark brings a unique perspective that aligns with our approach of providing our clients with the highest level of expert advice.” Read the full article at BenefitsCanada.com

New SMA Blog by Mark Breading, Partner, Strategy Meets Action — When will the COVID-19 pandemic end? Will it end? P&C insurers, like all other business sectors, are faced with a time of unprecedented uncertainty. There are always multiple external factors to consider when developing strategies and adjusting ongoing plans. Now, layer into the traditional elements all the fallout from the pandemic, restrictions on economic activity, work-from-home, virtual schooling, social unrest, and political/legislative uncertainties. How are all of these developments affecting P&C insurer technology strategies and plans? SMA has been tracking changes to budgets and plans since the pandemic hit the US hard in early 2020 via Market Pulse Surveys and our ongoing work with insurers. This blog summarizes some of the big themes regarding overall tech plans and digital transformation. In the spring and moving into summer, personal lines insurers were aggressively revising tech plans. Most navigated the transition to #WFM smoothly and experienced lower claims due to changing patterns. Even with large rebates to policyholders and auto premiums down slightly, the financial picture looked positive for personal lines companies. As a result, many were accelerating their overall tech spending and digital transformation projects. Commercial lines companies were faced...

Jennifer Paterson | October 28, 2020 Highlighting a long-standing commitment to the health of its employees, SSQ Life Insurance Co. was awarded the Sanofi Canada Wellness Pioneer Award at Benefits Canada‘s 2020 Workplace Benefits Awards on Oct. 16. Its health and wellness program, which was established 15 years ago, integrates health prevention and health promotion, a lever it considers essential to workplace absence management. It covers four areas: lifestyle habits, work-life balance, working environment and management practices. In addition, over the past two years, SSQ has also added a virtual health-care platform and formed a partnership with a company offering psychological health support, including conferences, workshops and group and individual support. Read: Who are the winners of the 2020 Workplace Benefits Awards? Referring to the insurer’s merger earlier this year with La Capitale Insurance and Financial Services, Martin Robert, executive vice-president of talent, culture and communications at SSQ, notes the win says a lot about what the two companies can achieve together. “Now that we’re together and we joined forces, imagine what we can achieve. For me, for this new company, that’s very positive.” During the coronavirus pandemic, the insurer was able to react quickly to support the health of its 2,000 employees. Within a few days,...

So, you lost the stretch IRA but here are three strategies that help bridge the gap. So the SECURE Act killed the stretch IRA but instead of mourning, advisors can help clients make up the loss. In fact, there are at least three opportunities, which Tom Duncan, vice president of the Advanced Consulting Group at Nationwide Financial, told a webinar audience about during the National Association of Fixed Annuities virtual Annuity Distribution Summit on Monday. Duncan said that even though the stretch IRA was a “great efficiency tool for family wealth transfer,” advisors can help cover that loss for families and create a sales opportunity to fill the gap left after the 10-year mandatory IRA cash-out for beneficiaries. The Life Insurance Strategy “Our first one, wealth replacement with life insurance, is all about closing the gap,” Duncan said. “When you run an illustration, you just do some comparison of the wealth-building power of the stretch versus the wealth building power of the 10-year rule.” Even if the beneficiary cashed in the IRA, took the after-tax amount and grew wealth in a tax-deferred way, there would still be a wealth gap, he said. Advertisement “What can we do from an inheritance perspective...

Last week, LL Global, the parent company of LIMRA, announced the successful one-year anniversary of a shared industry solution that has helped financial-services companies contain the threat of a specific type of insurance fraud. The solution, called FraudShare, has been the subject of widespread industry interest in the United States. Since its inception, 42 companies have integrated it into their fraud prevention programs, and many others are either undertaking due diligence or well on their way toward adoption. As it stands, the application is poised to cover U.S. companies representing 75% of the in-force life insurance market, 70% of deferred annuity assets, and 30% of the defined-contribution plans market in the country. “FraudShare was designed to help combat account takeover attacks perpetrated by unknown, unrelated third-party impostors,” explained Russ Anderson, head of LL Global’s Financial Crimes Services. “These are individuals who have no relationship or connection to the policy owner or the customer who owns the account they’re attacking, and no relationship or connection to the agent or the company.” Anderson explained that the criminals behind ATO attacks are typically foreign-based individuals who obtain people’s personal information through the dark web. While it has been prevalent in the banking and...

Ellen Moore has announced her retirement from being president of Chubb Canada, which will take effect at the end of the year. Taking over the position is John Alfieri, Chubb’s current Executive Vice President, North America Major Accounts Field Operations. He is stepping into the role effective immediately, subject to the necessary regulatory approvals. As per a statement from Chubb Canada, Moore will be the company’s chair of Operations for the remainder of the year. To ensure a smooth transition, she’ll be working with Alfieri in an advisory capacity. Alfieri will report to Chris Maleno, senior vice president, Chubb Group, and division president, North America Field Operations. In his new position as president of Chubb Canada, Alfieri will take executive operating responsibility for the company’s retail property and casualty insurance business including high-net-worth personal lines, as well as accident and health offerings for Canadian-based clients served by independent brokers and agents. He’ll oversee delivery of Chubb’s solutions to agent and broker distribution partners through four Canadian branch offices, along with all facets of the business including strategy, product and business development, underwriting and service operations, and profit and loss performance. “We are fortunate to have had Ellen’s expertise in running...

PR Newswire Unum Group today reported net income of $231.1 million ($1.13 per diluted common share) for the third quarter of 2020, compared to net income of $242.0 million ($1.16 per diluted common share) for the third quarter of 2019. Included in net income for the third quarter of 2020 are after-tax costs related to an organizational design update of $18.6 million ($0.09 per diluted common share), as well as a net after-tax realized investment gain on the Company’s investment portfolio of $3.8 million ($0.01 per diluted common share).  Included in net income for the third quarter of 2019 are after-tax costs related to the early retirement of debt of $19.9 million ($0.10 per diluted common share), as well as a net after-tax realized investment loss on the Company’s investment portfolio of $20.8 million ($0.10 per diluted common share).  Excluding the items above, after-tax adjusted operating income was $245.9 million ($1.21 per diluted common share) in the third quarter of 2020, compared to $282.7 million ($1.36 per diluted common share) in the third quarter of 2019. “Financial performance remained solid in the third quarter, despite pressure from elevated mortality rates and unemployment levels,” said Richard P. McKenney, president and chief...

Staff | October 27, 2020 Canada’s defined benefit pension plans posted a 3.2 per cent return in 2020’s third quarter, a position augmented by strong global equity markets, according to Northern Trust Canada’s pension universe. “The global pandemic has undoubtedly accelerated the pace of change for many defined benefit pension plans over the course of recent months, namely in the form of financial, regulatory, as well as technology transformation,” said Katie Pries, president and chief executive officer of Northern Trust Canada, in a press release. “As pension plan sponsors embrace this evolution of change and the adaptation to a virtual work environment, they remain vigilant on preserving plan assets while generating investment results supportive of long-term sustainability and growth.” Read: Canadian DB plans post 1.6 per cent median return in third quarter: survey The third quarter saw equity markets weather the economic impact of the coronavirus pandemic with the support of government-funded stimulus, with growth further encouraged by progress in vaccine development, noted the report. Canadian equities, as measured by the S&P/TSX composite index, generated a return of 4.7 per cent. All sectors posted gains with the exception of health care and energy. U.S. equities also made gains with a new all-time high in...

Jennifer Paterson | October 27, 2020 Scotiabank secured its second win at Benefits Canada‘s 2020 Workplace Benefits Awards on Oct. 16 for adapting its existing benefits and introducing new resources to support employees in the face of the coronavirus pandemic. In the Coronavirus and Benefits category for an employer with more than 5,000 employees, the bank’s entry outlined how it transitioned 60 per cent of its global employee population to remote work when the pandemic hit and adapted existing programs to support their total well-being. “The theme of any success this year in the benefits space or otherwise is probably agility,” says Simone Reitzes, vice-president of global pension and benefits at Scotiabank. Read: TMX Group awarded for mobilizing to support staff well-being during coronavirus While the bank increased its personal day policy on Jan. 1, 2020, to provide all Canadian employees with five days annually, it raised that further, to 10 days, for 2020 only. “There were so many different reasons [for this],” she says. “School closures were obviously a big one and a hot topic in society. But also, employees were taking a personal day to line up at the grocery store, so errands that we’d taken for granted, employees were having to...