Insurable Interest Canadian Insurance Blog

Staff | July 24, 2020 Canadian defined benefit pension plans recovered some of their losses from the start of 2020 in the second quarter off the back of strong public equity gains, according to the Northern Trust Canada universe. With stimulus spending to tackle the economic impacts of the coronavirus pandemic taking effect in many countries, stock markets rebounded with double-digit gains for the second quarter. “Despite the level of volatility witnessed over the last several months, Canadian pension plans are tracking in a positive direction, with the median plan in the Northern Trust Canada universe generating a solid 9.9 per cent gain for the second quarter,” said Katie Pries, president and chief executive officer of Northern Trust Canada, in a press release.  Read: Canadian DB plans return negative 7.1% in first quarter “Although there still remains a heightened level of uncertainty in the current environment as the pandemic continues to run its course, plan sponsors continue to persevere as they navigate on a path to sustainability.” The gains made during the quarter represent a quick turnaround from the dismal losses seen by DB pensions during the first quarter of the year, when Northern Trust’s universe found plans posted a negative 7.1 per cent. The...

Staff  | July 24, 2020 Among Canadian expatriates who said their future plans have been affected by the coronavirus pandemic, 53 per cent said their health and well-being is now a greater priority, while 48 per cent cited family as the biggest priority, according to a new survey by Allianz Care. The survey, which polled expats living in Canada, France, Singapore, the U.K. and the United Arab Emirates, found 73 per cent also said the health and well-being of their family is now a crucial consideration in deciding whether to stay abroad or move back home. When it comes to the reasons for originally moving abroad, nearly half (46 per cent) of respondents said they moved abroad for personal development, while 40 per cent said they did so in search of a better work-life balance. Read: 75% of global workers feel employers are looking after their well-being during coronavirus Indeed, the pursuit of a good work-life balance was a key influencing factor for 70 per cent of expats in terms of deciding whether to stay abroad or move home. Among that group, 60 per cent said they have a better work-life balance living abroad than they did at home. That figure rose to 72...

Texas-based insurer Globe Life estimates $2 million in life insurance claims per 10,000 lives lost to the COVID-19 pandemic. Frank Svoboda, chief financial officer for Globe Life, revealed the projection Thursday during the company’s second-quarter earnings call. The insurer estimates $45 million of COVID-related life claims for 2020, nearly double its first-quarter projection. These additional claims are expected to cut Globe Life’s 2020 earnings per share by $0.33, Svoboda explained. “While we do expect higher COVID-related life claim payments over the course of the year, these higher claims are expected to be largely offset by higher premium collections and lower health claim payments,” Svoboda added. Globe Life is one of the first life insurance companies to report second-quarter earnings. The quarter offers the first glimpse at how well insurers are countering the financial impacts of the worldwide pandemic. Recent indications are favorable, with many insurers lifting age restrictions on life underwriting. Insurers entered 2020 with “very strong balance sheets,” said Doug Meyer, managing director and head of life insurance at Fitch Ratings, which is helping companies withstand the weakened economy and ultra-low interest rates. Advertisement In the big picture, companies were helped by the mostly strong liquidity throughout the pandemic,...

Staff | July 24, 2020 The Canada Pension Plan Investment Board is updating its policy on sustainable investing to reflect an increased conviction in the importance of environmental, social and governance risks and opportunities. “ESG considerations are inextricably linked to our ability to successfully achieve our investment objectives,” said Richard Manley, managing director and head of sustainable investing at the CPPIB, in a press release. “Our policy reflects the growing body of evidence showing that companies that integrate consideration of ESG-related business risks and opportunities are more likely to preserve and create long-term value.” Read: BCI publishes ESG strategy The updated policy outlined the CPPIB’s specific support for companies tailoring their reporting with the sustainability accounting standards board and the task force on climate-related financial disclosures. It also highlighted the importance of asset owners engaging with companies on issues of sustainability. “We believe active ownership through constructive engagement can enhance and sustain returns over time and significantly reduce investment risks,” said Manley. “As a supplier of patient, engaged and productive capital, we are able to work with companies to bring about change, helping them deliver enduring value-building growth.” Read: What’s keeping ESG rankings so convoluted? Read the full article at BenefitsCanada.com

Staff | July 24, 2020 Quebec has published new draft regulations aimed at helping the administrators of supplemental pension plans to navigate the coronavirus pandemic. The proposed regulations would allow plan members to maintain their active membership in a supplemental plan even if they’re experiencing a temporary suspension in accruing benefits, as long as that suspension began in 2020 and doesn’t last longer than 12 months from the date accrual stopped. As well, noted the regulations, the suspension would apply only to the accrual of benefits as of July 15, 2020, when the draft regulations were published. The measure would apply to all supplemental pension plans and simplified pension plans but not to voluntary retirement savings plans. Plan administrators can apply to Retraite Quebec to take advantage of the option but must also file an actuarial valuation that reflects the amendments. Read: An overview of Canadian DB pension relief measures during coronavirus The regulations would also eliminate the need for pension plans with funding levels under 90 per cent as of Dec. 31, 2019 to file an actuarial valuation as of Dec. 31, 2020. However, these plans would have to file an actuarial valuation by Dec. 31, 2021. The draft also includes other temporary relief measures previously announced by Retraite Quebec. Supplemental and...

Staff | July 24, 2020 Mercer Canada is appointing Teresa Palandra as leader of its wealth business. Palandra will be in charge of investment, wealth management and retirement services and solutions for the Canadian market. She’s taking over from Jean-Philippe Provost as he moves on to lead the multinational plan sponsor client segment of the firm’s global business solutions team. A partner with Mercer, Palandra most recently headed up the firm’s Toronto office. She has more than 20 years of advisory experience with financial management, design, risk management, plan governance and pension plan administration. She’s also a fellow of the Society of Actuaries and the Canadian Institute of Actuaries, as well as the executive sponsor of the Toronto Women@Mercer chapter and its Canadian racial and ethnic diversity group. Read: Mercer appoints Canadian and U.S. heads of responsible investing “I am confident that Teresa’s outstanding leadership and deep knowledge across our business will help drive the team for sustained success in Canada,” said Jaqui Parchment, Mercer Canada’s chief executive officer, in a press release. “Teresa’s diverse and expansive consulting background will ensure we continue to create successful financial outcomes for our clients and their employees.” In other personnel news, Simon-Alexandre Lachance has taken on a role as senior consultant for group savings...

Jamar Cobb-Dennard, a business broker at Indiana Business Advisors, discusses how emotional intelligence affects racial relations in a National African American Insurance Association webinar. Confronting racial bias in the workplace is not just about policies and practices. Although they are important, something else is far more significant. It is emotional intelligence, where “80% of your success lives,” according to Jamar Cobb-Dennard, a business broker at Indiana Business Advisors, who spoke about racial bias in the workplace in a webinar, Check Yourself Before You Wreck Yourself, for the National African-American Insurance Association, which represents 750 members across all sectors of insurance. “The hippocampus part of our brain drives decision-making, and especially emotional decision-making, and 80% of our success actually comes from using our emotions to make decisions, versus 20%,” Cobb-Dennard said, citing research that Daniel Goleman explained in his 1995 book, Emotional Intelligence. “You learn science. You learn English,” Cobb-Dennard said. “But he came out and said that’s really just a small portion of what actually creates success for you personally, but also for organizations. For organizational success and for building equity, we’ve got to understand our emotions and then how to manage and understand the emotions of others.” So, what...

The Financial Services Regulatory Authority of Ontario (FSRA) has published a report detailing complaints of agent misconduct it received from its June 8, 2019 launch to the end of its fiscal year on March 31, 2020. During that period, FSRA said it received 52 life agent reporting forms (LARFs) from insurers detailing cases where they suspect an agent of being unsuitable of carrying on business as an agent, based on non-compliance with the Insurance Act, regulations, or the terms of their license. Of the 52 files generated from the LARFs, 23 resulted in Letters of Warning, 16 were escalated for further investigation and possible regulatory action, and 13 were closed with no action due to lack of jurisdiction, insufficient evidence, or no financial consumer harm caused. In eight of the 23 cases that generated a letter of warning, the agents were found to have insufficient continuing education credits, with no consumer harm identified. Six out of those 23 involved findings of forgery and fraud, including: Three where fraudulent activities were conducted in another province and reported to the regulator concerned; One finding of fraudulent activities where the agent is placed under investigation and strict supervision by the respective insurer; One...

The Canadian Press | July 23, 2020 The purchase offer for Cirque du Soleil from its secured creditors risks eliminating Quebec’s longstanding presence as a shareholder and causing losses of tens of millions of dollars to two of the province’s largest institutional investors. A US$1.2-billion takeover proposal by a group of debt holders, which was approved on Friday as the benchmark bid for a court-supervised auction of the insolvent entertainment giant, would push aside the trio of current stakeholders: Quebec’s pension fund manager, the Texan fund TPG Capital and the Chinese firm Fosun. Read: Caisse part of consortium bidding to acquire Cirque du Soleil assets The Caisse de dépôt et placement du Québec estimated in its most recent annual report that its initial 10 per cent stake, bought in 2015, was worth between $50 million and $100 million as of Dec. 31. It scooped up another 10 per cent chunk in February from co-founder Guy Laliberte, who sold off his remaining shares just before the COVID-19 pandemic hit North America. Court documents filed under the Companies’ Creditors Arrangement Act also show that the Caisse and Quebec’s Fonds de solidarité FTQ each lent Cirque US$30 million last year. The Fonds confirmed recently it doesn’t expect to...

Staff | July 23, 2020 Navacord Corp. is acquiring Ontario-based firms Selectpath Benefits and Financial Inc. and ProBenefits Consulting Inc., more than doubling its benefits revenue. With a strong presence in Ontario’s southwest, Selectpath specializes in benefits and pension solutions for the hospital and health-care sectors, as well as a wide range of industries including transportation, automotive dealerships, technology and manufacturing. “Selectpath deepens our leadership and expertise and expands on our multi-line approach with a broader scope of products and services,” said Shawn DeSantis, president and chief executive officer, in a press release. “The Selectpath team brings significant new capabilities in financial planning, human resources management, [human resources information services] and payroll — something not many other brokers can offer.” Read: Navacord acquires Edmonton-based benefits consulting firm ProBenefits, also based in Ontario, specializes in designing customized and sustainable benefits and pension plans using a proprietary audit and disciplined cost-containment strategy. The addition of ProBenefits also broadens Navacord’s benefits and pensions business in the Toronto area. “Navacord continues to attract strong, like-minded brokers who wish to partner with a national organization to scale or build out their service offerings while maintaining their unique brand, culture and autonomy,” said T. Marshall Sadd, executive chairman at Navacord, in the release. “We’re...