Insurable Interest Canadian Insurance Blog

Staff | September 21, 2020 The Office of the Superintendent of Financial Institutions is launching a three-month consultation on risks and other considerations regarding technological advancements impacting Canada’s financial sector. Along with a discussion paper, the consultation’s objective is to ensure federally regulated financial institutions and pension plans have solid strategies to manage non-financial risks. According to the agency, while rapidly advancing technology and digitization have been helpful to Canadian financial institutions, their swift adoption can be risky if not properly managed and understood. The paper focuses on the key technological areas of cyber security, advanced analytics and the use of third-party services like cloud computing. Read: Balancing the risks and opportunities of AI “Digital technology continues to transform the financial sector,” said Ben Gully, assistant superintendent for the regulation sector at the OSFI, in a press release. “The pace of change has only increased since the pandemic began. This consultation will help OSFI to refine its regulatory and supervisory framework in a complex, rapidly changing digital world. The contributions received and the discussions that will occur will support effective risk management and enhance resilience in the Canadian financial sector.” The OSFI is welcoming comments and submissions on the discussion paper from industry stakeholders, academics and...

In the current COVID-19 reality, insurers who have been able to conduct business digitally, rather than through the traditional face-to-face, paper-based, and wet-signature methods are generally seen as ahead of the pack. But according to one industry veteran, companies must tread carefully when it comes to the underwriting process. In a commentary published in Contingencies, a publication by the American Academy of Actuaries, seasoned life insurance underwriter Hank George said that life insurers may want to favour slow, careful underwriting to ensure they’re protected from the impact of the pandemic, reported ThinkAdvisor. To expand the base of consumers who can quickly buy life insurance coverage online using automated underwriting, many members of the academy are working with life insurers to help minimize the traditional dependence on blood tests, urine tests, and attending physician statements. In an apparent effort to underscore this industry posture, the academy included a disclaimer under George’s article, which said the views it expresses “do not necessarily represent the official views of the American Academy of Actuaries.” Maintaining that “accelerated underwriting” or “simplified underwriting” may be an ill fit for the post-COVID-19 world, he said that high unemployment rates could give rise to or exacerbate mood disorders....

Staff | September 18, 2020 Presenteeism is the No. 1 issue for employers in terms of its negative impact on the workforce and the extent to which is can be improved with counselling through an employee assistance program, according to a new survey by Morneau Shepell Ltd. The survey, which covered insights from more than 35,000 employees gathered between 2010 and 2019, found 56 per cent of respondents had an issue in their lives that made it difficult to concentrate on their work; however, this fell to 28 per cent after counselling. More than a third (37 per cent) reported dissatisfaction with life overall, indicating a level of clinical distress, which fell to 16 per cent after counselling. Further, 32 per cent said they weren’t engaged in their work, falling to 23 per cent after counselling. And just under a quarter (22 per cent) reported feelings of dread when going to work, which fell to 13 per cent after counselling. Read: Head to head: Which is more disruptive: absenteeism or presenteeism? The survey’s findings were largely consistent across employee age, sex, region, industry, the issue causing presenteeism or absenteeism, the number of counselling sessions used and for how long. They were also similar regardless of whether...

Staff  | September 18, 2020 Over the past four years, total drug costs adjudicated by HBM+ have risen from about $1.2 billion to $1.5 billion, while the number of claimants has increased from 1.7 million to more than two million. The inaugural drug trends and strategic insights report by the health benefits manager, a division of Green Shield Canada, examined drug claims and utilization data for six partner insurers and third-party administrators. Aside from 2018 — the year the Ontario government introduced the OHIP+ program, which provided drug coverage for all Ontarians aged 25 or younger — overall drug costs have risen each year, with the trend ranging from four per cent to more than 14 per cent per year. Read: How will OHIP+ rollback affect plan sponsors? The report noted the OHIP+ program resulted in a substantial reduction in costs for private plans with a large component of plan members in the province. However, in 2019, Ontario reversed the program for those who had private coverage, effectively eliminating the previously gained savings. Between 2018 and 2019, the number of claimants younger than age 25 soared by 84 per cent, contributing to a more than seven per cent rise in the total number of claimants...

Staff  | September 18, 2020 The Canadian Institute of Actuaries has selected FTSE Russell to represent the provincial and investment-grade corporate bond spread to be used for the CIA’s new market-based commuted-value calculation. The calculation is used to determine how much to pay a member of a registered defined benefit pension who leaves the plan and elects to receive their pension entitlement as a lump-sum payment. Historically based on the yields of long-term Government of Canada bonds, it will now also reflect blended spreads of provincial and investment-grade corporate bond yields. “We gave it a great deal of thought and sought feedback from across the Canada actuarial and pension community when we decided to modernize our approach to commuted-value computation,” said Michel St-Germain, president of the Canadian Institute of Actuaries, in a press release. “And when we decided to go to a more market-based approach to the determination of commuted-value interest rates, FTSE Russell Canada was the natural choice. . . . We also appreciate that FTSE Russell Canada is making the relevant index values accessible on their website to all those who need this information.” Read: Changes coming for pension plan commuted-value standards The changes to the commuted-value standard, published by the CIA’s...

Hodgen Mainda is commissioner of insurance for Tennessee. Tennessee Insurance Commissioner Hodgen Mainda delivered a simple, eloquent message for his colleagues: “This is personal.” An African American, Mainda spoke passionately about what the insurance industry needs to contribute to the national movement toward a colorblind society. He addressed regulators Thursday during the initial meeting of the National Association of Insurance Commissioners’ Special Committee on Race and Insurance. “This is upholding the dignity and sanctity of human life,” said Mainda, a native of Nairobi, Kenya, who moved to Tennessee in 1997. “And that’s the way that we need to approach it. Put the politics aside. This is about human beings and being inclusive and being accepting of people for who they are.” The two-hour meeting, held virtually, established the committee’s five work streams and the co-chairs of each work group. They include: Research/analyze level of diversity and inclusion within and access to the insurance industry and insurance products. Make recommendations on action steps. Co-chairs: Hodgen Mainda and My Chi To, executive deputy superintendent of the Insurance Division, New York. Research/analyze level of diversity and inclusion within the NAIC and state insurance regulator community. Make recommendations on action steps. Co-chairs: Kentucky Insurance...

Montreal, QC (Sept. 17, 2020) – Apollo Insurance Solutions Ltd. (“Apollo Exchange”), Canada’s largest online insurance marketplace, and the Keal System Users (KSU) have partnered to offer the Keal group immediate quote, bind and policy issuance. With this partnership, both parties are able to collaborate on technology solutions and work together to provide a streamlined experience for brokers. The Apollo broker portal features hundreds of classes of business – as well as special event and tenant insurance — eligible to quote, bind, and issue policy documents online and in real time, in line with the expectations of modern consumers. “With the changing environment it is important for brokers to have access to technology which allows them to focus on the important goals of growing a business without getting distracted with menial tasks.” said Sharon Bajwa, VP Business Development – National at Apollo. “The Apollo Exchange provides a solution to that problem.” “The KSU Board is excited to work with Apollo on this partnership. This initiative will allow our members to further their digital transformation and online offering,” said Sheldon Williams, KSU President. “Apollo continues to provide the market with great solutions and our KSU members are at the forefront of...

Staff | September 18, 2020 The Canada Climate Law Initiative is calling into question whether the Canada Pension Plan Investment Board is sufficiently aligning its investments with the transition to a low-carbon economy. In a legal analysis, the organization said the pension fund’s current allocations to high-carbon assets reveal a “troubling incrementalism” within its efforts to mitigate Canadians’ exposure to material financial risks relating to climate change. “Climate change poses systemic risks, impacting supply chains, future cash flows and disrupting business models across industries,” said Nick Silver, managing director of Callund Consulting, in a press release from the CCLI. “CPP Investments would best fulfill its investment mandate and serve the best interests of Canadians by transitioning out of declining fossil fuel assets and into industries of the future which will create the jobs, infrastructure and growth today that Canada will need to become a thriving economy in the 21st century.” Read: Bâtirente sets new climate commitment for 2025 The analysis also suggested that exposure to these assets may be inconsistent with the CPPIB’s fiduciary duty. It highlighted the duty corporate directors have to clearly communicate the impacts, current and future, of climate change on the company to their investors. “Like other fiduciaries, pension fund administrators have a...

Staff | September 18, 2020 U.S. employers are planning to maintain core health benefits but are exploring other changes to preserve jobs and manage expenses, according to new a new survey by Arthur J. Gallagher & Co. The survey, which looked at data from nearly 4,000 employers over several months, found close to half have planned salary freezes for management and executives (43 per cent) and non-management personnel (42 per cent) in order to preserve jobs in 2021. Following the outbreak of the coronavirus, 83 per cent of employers said they strongly emphasized specific benefits within their total well-being package, including emotional well-being supports (65 per cent), leave policies (47 per cent), medical benefits (39 per cent) and physical well-being benefits (36 per cent). Read: Employers concerned about retaining valued staff amid salary cuts, freezes: survey However, the pandemic hasn’t forced employers to make mid-year adjustments to coverage, with 86 per cent of employers saying they hadn’t reduced health benefits and didn’t plan to during the crisis. More than two-thirds (79 per cent) said they expect to continue the same health coverage into 2021. “Over the last decade, a tightening labour market led employers to offer a robust holistic rewards strategy to win the war for talent, but the pandemic...

Jennifer Paterson | September 18, 2020 I’m about to embark on the most exciting and terrifying chapter of my life — by the time you read this, I’ll be more than six months pregnant with my first child. With a decade in the industry, writing and editing stories about work-life balance, it’s now time to face the reality myself and try to answer the question: Can I have it all? Certain realities of our new normal will definitely lower some of the barriers. While Benefits Canada and our parent company Contex Group Inc. may have a brick-and-mortar office when I return from maternity leave, at the moment, like many other companies and industries, we’re all working from home. That’s allowed me the opportunity to finally give up my tiny apartment in Toronto and move full time to my big house — and five acres — in Prince Edward County, the gorgeous wine region nestled on Lake Ontario. Read: Women in Canada’s benefits, pension industries talk gender diversity and beyond All of these changes coincide with our third annual Women’s Issue. For the Cover Story, I spoke with nine senior women in the human resources, benefits, pension and investment industries. In discussing career...