Insurable Interest Canadian Insurance Blog

Staff  | September 2, 2020 Canada Life Assurance Co. is introducing a self-directed registered education savings plan to help employers support their employees’ varying financial priorities. Employers can add the RESP to their employee benefits plan at no addition cost, while plan members can choose either the family or individual plan, where they can contribute as much or as little as they want through payroll deduction, pre-authorized debit or online banking payment. Contributions are then placed into a fund designed to automatically lower the risk of potentially decreasing in value as students get closer to starting post-secondary education. Read: Just 6% of Canadians cite retirement saving as top financial priority in 2019: survey Employees are also prompted to access any applicable grants, including the Canada Education Savings Grant, which kicks in $1 for every $5 an employee contributes, or the Canada Learning Bond, which is aimed at low-income Canadians and provides a $500 initial grant to a maximum of $2,000, just for opening an RESP account. “Tuition and student debt are only going to go up,” said Ryan Weiss, the insurer’s vice-president of product and experience for group customer, in a press release. “RESPs are without a doubt the best way to save for education, but...

As the world continues to fight through the COVID-19 crisis, various thought leaders and policymakers have suggested that recovery efforts be taken as an opportunity to “build back better.” And according to the co-founder and CEO of Breathe Life, a software-as-a-service provider catering to the North American life insurance space, carriers have the chance to do just that. “We always say life insurance is sold not bought, yet the people who are selling don’t have the tools they need to sell in 2020,” Ian Jeffrey told Life and Health Professional. “When we talk about the different offerings that we’ve launched as a platform, we have this vision of a one stop e-commerce enterprise solution.” Under the gun to go digital Ever since it raised $4.5 million from investors early last year, the venture-backed technology firm has launched several modules to support the insurance sales process. In May 2019, it launched a direct-to-consumer (D-to-C) module for insurance carriers, which also offers the ability for agents to earn commissions for sales that come through landing pages they have set up; that August, it launched an advisor experience module that enables a unified experience and data model. This past April, the company announced...

Recently, the Supreme Court of Canada upheld federal legislation that prevents third parties from demanding genetic information from individuals. Those third parties include insurance companies, which effectiveky face prospective prosecution unless they take appropriate precautionary measures. In a recent article, Bernice Karn, Katie-May O’Donnell, and Gordon Goodman of legal firm Cassels explained that under the Genetic Non-Discrimination Act, it is a crime to force an individual to get genetic testing, as well as collect, use, or disclose results of genetic testing without the individual’s written consent. As defined in the act, a “genetic test” is one that “analyzes DNA, RNA or chromosomes for purposes such as the prediction of disease or vertical transmission risk, or monitoring, diagnosis or prognosis.” A breach of the act can result in a fine of up to $1 million, prison time of up to five years, or both. The authors said that insurance legislation in each jurisdiction of Canada requires prospective insureds to fully disclose facts material to the insurance, including medical history, when they apply to life insurance companies for coverage. If they don’t disclose the information, their contract could be rendered voidable by the insurer. “Following the Decision, the courts will now need...

Courtesy of LIMRA One thing that the COVID-19 pandemic has made clear is that life is fragile and a person’s financial situation can change very quickly. Yet, despite the fact that people generally recognize the value of life insurance, LIMRA research shows 46% of Americans are uninsured and many more do not have enough coverage. Before the pandemic, nearly 1 in 3 families said they would face financial challenges within a month if the primary wage earner died. Every September, the industry — led by Life Happens — comes together to sponsor Life Insurance Awareness Month (LIAM). This campaign is designed to educate consumers about the importance of life insurance. “LIMRA is proud to support LIAM and help raise consumer awareness about the vital role life insurance plays in protecting families’ financial security,” said Gina Birchall, chief operating officer, LL Global. “Our research shows life insurance ownership has declined over the past 10 years. Campaigns like LIAM help ensure consumers understand the value of life insurance and take steps to obtain the coverage they need.” Advertisement According to LIMRA’s July consumer sentiment study, life insurance owners are more likely than non-owners to worry about having adequate coverage (64% versus 51%)...

The life/annuity industry’s net income fell by 66% in the first half of 2020, compared with the year-ago period, A.M. Best reported today, driven by a major reinsurance agreement inked between Jackson National and Athene. This financial review is detailed in a new Best’s Special Report, titled, “First Look— Six-Month 2020 Life/Annuity Financial Results.” Although some life insurers provided COVID-19-related premium refunds to policyholders, the primary reason for the steep premium decline was Jackson National’s ceded coinsurance agreement with Athene Life Re, the report concluded. The deal had the effect of moving approximately $27 billion of premium out of the U.S. statutory industry population and into Bermuda. Total expenses for the industry increased 1.1%, as a 5% decline in surrender benefits, a 13.3% decline in general and other expenses and $11.6 billion less in transfers to separate accounts offset an 11.4% increase in death benefits. Advertisement In addition, the premium decline and minimal expense increase resulted in a drop in net operating gain of 95.3% from the prior-year period, to $1.6 billion. Despite the reduction in net income and a 50% decline in unrealized gains, capital and surplus increased by 4.1% to $440.8 billion over the six-month period. The data...

Staff  | September 1, 2020 The British Columbia Investment Management Corp. is investing in an Indian telecommunications tower company alongside Brookfield Infrastructure Partners and its institutional partners. The transaction totals an equity commitment of about US$3.4 billion, with the investors buying a 100 per cent stake in the company from Reliance Industrial Investments and Holdings Ltd., a wholly-owned subsidiary of Reliance Industries Ltd. “For BCI and our clients, this investment is well-aligned with our long-term strategy of investing in high quality companies and assets that fulfill essential needs of the communities in which they operate,” said Lincoln Webb, executive vice-president and global head of the BCI’s infrastructure and renewable resources program, in a press release. Read: Caisse investing in data centre operator, telecom infrastructure “Data services are increasingly critical to societies and economies in today’s world, promoting both opportunity for individuals and potential innovation for local communities. BCI is excited by the opportunity to invest in infrastructure that will play a vital role in enabling India’s continued economic growth.” The investment includes a portfolio of about 135,000 recently constructed communication towers throughout India, with about 40,000 more in the works. In other investment news, Greystar Real Estate Partners is joining the Canada Pension Plan Investment Board and Cyrela Brazil Realty in a joint...

Life insurance sales struggled mightily during a pandemic-marred second quarter, according to new data from Wink’s Sales & Market Report. “Product repricing for 2017/PBR is definitely catching up with everyone,” said Sheryl J. Moore, president and CEO of both Moore Market Intelligence and Wink Inc. “This cyclical reduction in sales is something we see every time the mortality tables update, but this time it was definitely more severe.” Non-Variable Universal Life Non-variable universal life sales for the second quarter were $642 million, down 16.6% when compared to the previous quarter and down 27.5% as compared to the same period last year. Non-variable universal life (UL) sales include both indexed UL and fixed UL product sales.Noteworthy highlights for total non-variable universal life sales in the second quarter included Pacific Life Companies retaining the No. 11 ranking overall, for non-variable universal life sales, with a market share of 11.2%. Pacific Life Pacific Discovery Xelerator IUL 2 was the No. 1 selling product for non-variable universal life sales, for all channels combined, for the fourth consecutive quarter. Advertisement Indexed life sales for the second quarter were $494.9 million, down 6% when compared with the previous quarter, and down 14.3% as compared to the...

Philly.com Montgomery County financial adviser Dean Vagnozzi says a federal lawsuit criticizing lender Par Funding and Vagnozzi’s ties to the firm could end up hurting investors in his unrelated funds, but the court-appointed receiver in the case says Vagnozzi’s recent actions make him hard to trust. On Friday, Vagnozzi warned that a federal judge’s freeze on his bank accounts — ordered in response to the U.S. Securities and Exchange Commission’s lawsuit — threatens to halt the payment of premiums for life-settlement policies packaged as investments for hundreds of his customers. He asked U.S. District Judge Rodolfo Ruiz to unfreeze money to pay those premiums so the policies bought by investors don’t expire starting as soon as Wednesday. Brian P. Miller, a lawyer for Vagnozzi, expressed impatience with the SEC’s criticisms in a court filing Friday. “Mr. Vagnozzi is sick and tired of being falsely accused of being uncooperative,” Miller wrote. “And this has zero to do with whether life insurance premiums should be paid.” Advertisement But in his court response Monday, Gaetan Alfano, the attorney for the court-appointed receiver who has taken control of Par and Vagnozzi’s businesses, questioned whether it was clear which were the right funds to pay...

Staff | September 1, 2020 The Office of the Superintendent of Financial Institutions is lifting the temporary freeze on portability transfers for private pension plans. The move reverses the OSFI’s response in March to market volatility caused by the coronavirus pandemic, which froze portability transfers and annuity purchases from defined benefit pension plans. The restrictions are no longer needed, it noted in a release, as markets have sufficiently stabilized. Read: OSFI temporarily freezes portability transfers, annuity purchases due to coronavirus “The changes announced today result from our ongoing effort to ensure that our regulatory measures continue to be appropriate for this unprecedented situation while remaining risk-focused and forward-looking,” said Jeremy Rudin, superintendent of the OSFI, in the release. The OSFI noted private pension plans have demonstrated resilience during the tumult of the past five months, adding it remains ready to take further action if needed, given the remaining risks to the financial sector as the pandemic continues. Read the full article at BenefitsCanada.com

Tom Milne | September 1, 2020 How long is your attention span? Be honest and think back to the last time you received an email about your employee benefits and didn’t tune out just a little bit. Now think about your intended audience and where their heads are at these days. The reality is, most people now have an attention span that’s better suited to the length of a TikTok video. We’ve gone from 140 characters on Twitter to single image infographics, all in the hope of holding an eyeball for that extra second. Before you know it, we’ll be back to hieroglyphics. While the ancient Egyptians may not have had the written word, maybe they already knew a picture was worth 1,000. Better yet, maybe the most basic form of written/visual communications just yields better understanding. People in marketing get it — they’ve mastered the art of using visuals and short, direct content to drive messages home. Most video advertisements on social media no longer need sound. By distilling their content down to the most basic form of written/visual communications, they improve their chances of delivering their message in a short period of time. Read: Innovative benefits communication nets award for WSP Canada As human...