Insurable Interest Canadian Insurance Blog

Jordan Press, The Canadian Press | August 20, 2020 The federal Liberals are rolling out a $37-billion income support plan for workers whose earnings have crashed during the pandemic. The details released Thursday outline what will happen to some four million workers receiving the $500-a-week Canada Emergency Response Benefit, which is set to wind down starting next month. The CERB will be extended another four weeks and a new benefit that pays $400 a week for up to 26 weeks will replace it for those ineligible for employment insurance. Anyone eligible for EI will receive the same minimum for at least 26 weeks and will be required to have worked 120 hours to qualify, well below current EI requirements, since many Canadians have been unable to work due to the pandemic. There will also be a $500-a-week sickness benefit and caregiving benefit for anyone who has to stay home because they’re ill or because school or daycare is closed. Read: Canada sets temporary minimum unemployment rate for EI Changes are also coming in to allow workers to keep more of their benefits even while they’re working, eliminating the earnings cliff created under CERB that acted as a disincentive to work. The three new benefits...

Staff | August 20, 2020 Alberta’s Local Authorities Pension Plan is introducing a new secure section of its website where plan members can log in, access their personal account and learn about their pension. The features of Your Pension Profile include mobile-friendly access to pension information, self-serve options and useful tools to help plan for retirement or manage the plan. It also allows members to request information and send pension documents directly to LAPP’s member services centre. Read: Alberta pension plan wins communications award for approachable, original website Through the portal, plan members will also be able to view and save important documents, such as annual pension statements and tax slips; receive notifications when pension documents are available or when information is required by the LAPP; and make updates to personal information, such as addresses and contact information, beneficiaries and banking information. Read the full article at BenefitsCanada.com

Staff  | August 20, 2020 Four types of new habits and perspectives are expected to define the post-coronavirus era and could impact investment portfolios, according to new analysis by Thinking Ahead, the thought leadership lab at the Canada Pension Plan Investment Board. The research, co-authored by Caitlin Walsh, senior portfolio manager, and Ruby Grewal, portfolio manager, analyzed the breadth of change expected following the global pandemic. Read: How are Canadian pension plans responding to coronavirus? It found four areas with the potential to impact investments: Permanent changes to consumer behaviour, such as greater e-commerce adoption among older consumers; Long-term impact on health care and privacy policy, including the shift toward telehealth and increased concerns over the sharing of personal data; Impact on cities and infrastructure, resulting from a potential shift of populations away from the largest urban centres and changing mobility trends; and Shifts in global supply chains, benefitting providers of supply chain software and automation. “As COVID-19 impacts consumers, businesses and governments we continue to monitor and assess the changing landscape as part of our ongoing risk management efforts and to identify new investment opportunities,” said Leon Pedersen, managing director and head of thematic investing at the CPPIB, in a press release. Read: Canadian public pension heads call on employers to...

Greg Lindberg Insurance magnate and billionaire Greg Lindberg was sentenced to more than seven years in prison Wednesday for orchestrating a bribery scheme involving independent expenditure accounts and improper campaign contributions. Lindberg, 50, of Durham, N.C., the founder and chairman of Eli Global and the owner of Global Bankers Insurance Group, was sentenced to 87 months in prison and three years of supervised release. Lindberg has told media outlets that he will appeal. Lindberg’s consultant, John D. Gray, 70, of Chapel Hill, North Carolina, was ordered to serve 30 months in prison, followed by two years of supervised release. Lindberg and Gray were also ordered to pay forfeiture in the amount approximately $1.45 million held in accounts established by the defendants for the purpose of funneling the bribe payments. On March 5, 2020, a federal jury convicted Lindberg and Gray of conspiracy to commit honest services wire fraud and bribery concerning programs receiving federal funds following an approximately three-week trial. U.S. District Judge Max O. Cogburn Jr. presided over the trial and today’s sentencing hearings. Co-defendant, Robert Cannon Hayes, 74, of Concord, North Carolina, was also sentenced today to a one-year probationary term. Hayes previously pleaded guilty to making false...

Kelsey Rolfe | August 20, 2020 The Public Sector Alliance of Canada is asking the federal government to change the way it reports the unfunded liabilities of public sector pension plans, arguing the current practice makes the cost of the plans appear more volatile. The federal government implemented a new discount rate methodology in 2017/18 for pre-2000 pension liabilities. It moved from using a 20-year average of long-term Government of Canada bonds to using a 10-year government bond rate, which is a better method for taking current low interest rates into account. The change, which came following a request from Canada’s auditor general, impacted how the liabilities were measured and led to substantial increases in the federal deficit in the government’s fall economic updates, of about $20 billion in 2018 and $25 billion in 2019. Read: Feds to review discount rates for pension, benefits obligations In its 2019 update, the government said it would consult on a proposal to improve the presentation of pension and benefit expenses in its financial statements by separately reporting the impact of remeasuring its pension obligations. Consultation took place from March 6 to June 12, 2020. In its consultation submission, the PSAC said it agreed with separating out the cost of pre-2000 pension obligations. “The PSAC believes...

There is a growing divergence in consumer perceptions about the economy and COVID-19 based on ideology, according to the latest results of LIMRA’s Consumer Sentiment Survey. In March, 77% of liberals and 58% of conservatives reported a high level of concern about COVID-19. Since then, perceptions regarding the gravity of the crisis have diverged significantly. In July, 78% of consumers who identify as liberals report a high level of concern about COVID-19, whereas only 44% of consumers who identify as conservatives report this level of concern — nearly doubling the gap between the two groups. Overall, just 25% of Americans had a favorable view of the economy in July. This is up 4 percentage points from March but down 31 percentage points from the all-time high of 56% (since LIMRA began tracking this in 2008) in January 2020. When it comes to the economy, consumers are similarly split along political lines. Sixty-eight percent of consumers who identify as liberal continue to be highly concerned about the economy while just 44% of conservatives show this level of concern. “Our study revealed a drastic difference in consumer perceptions about the economy and the pandemic, based on whether they are liberal or conservative,”...

Staff | August 20, 2020 Long-term engagement with companies on environmental, social and governance issues has been touted as a route to impact positive change, but a new paper from the Alternative Investment Management Association is arguing that short selling has a role to play in the realm of ESG. “Short selling can be an excellent tool for achieving two common goals of contemporary responsible investment: mitigating undesired ESG risks and, when taken in aggregate, creating an economic impact by influencing the nature of capital flows through active investing,” noted the paper. Read: Climate risk goes beyond the ‘E’ in ESG: webinar The paper demonstrated how institutional investors could use short selling to mitigate carbon risk to their portfolios, in addition to having a positive impact on the market more broadly. It noted the practice of carbon foot-printing a portfolio is becoming more common, adding that alternative investment managers have lagged somewhat in this area. “The demand for carbon data seems to be increasing and, as institutional investors come under greater pressure to disclose their carbon footprints or to set internal carbon budgets, they may well expect their external managers to report their own footprints,” said the paper. Looking specifically to this issue, an...

Staff | August 19, 2020 Quebec is applying new pension relief measures and is also extending the credit on employer contributions to the health services fund. The pension relief measures, which the federal government announced in early July, will allow registered pension plans to borrow money and extend the deadline to retroactively credit pensionable service under a defined benefit plan. In particular, the measures respond to potential cash flow difficulties faced by registered pension plans because of the coronavirus pandemic, ensuring it won’t be mandatory to terminate a deferred salary leave plan if an employee suspends their leave to return to work or if an employee decides to defer their paid leave. Read: Feds announce new temporary relief measures for pension plan sponsors The 12-week extension of the credit on employer contributions to the health services fund will be in force for the entire duration of the Canada Emergency Wage Subsidy program, which now extends until Nov. 21, 2020. “The labour market is gradually reviving, but we must continue to support businesses to keep as many people as possible at work,” said Minister of Finance Eric Girard, in a press release. “We are continuing to closely monitor the situation and will adjust our initiatives to respond as best we can to the needs...

How insurers need to shift their response beyond tweaking legacy offerings Get your copy of The Future of Mobility Insurance New York, NY (Aug. 13, 2020) – Despite many exciting innovations and advancements in mobility technology and business models, insurance remains pretty much the same. Rather than responding with new commensurate innovations, insurance solutions that have existed for decades are shoehorned with minimal adaptation to meet minimum requirements, often leaving coverage gaps. There is no doubt that mobility is changing, and insurers will need to shift their response beyond tweaking legacy offerings. In this report, Slice Labs dives into our view of the future of mobility insurance. Introduction: Preparing for Possible Futures Autonomous, shared and electric vehicles are facets of the changing mobility landscape with which we have all started to become very familiar. We are able to imagine how developments on each of these fronts, both individually and in distinct combinations, will alter our lives and in fact our lifestyle. How we move from place to place, how we interact with modes of transportation, what we value in making choices around mobility will all transform to a seamless, efficient and rewarding experience. Coupled with that is our expectation, as...

Edelweiss Tokio Life partners with Element AI to develop strategic AI roadmap and prioritize investments Montréal, QC (Aug. 18, 2020) – Element AI, a global developer of artificial intelligence-powered (AI) solutions and products, is pleased to announce the Indian insurer Edelweiss Tokio Life Insurance as its newest client. Launched in 2011, Edelweiss Tokio Life has quickly become an important player in India’s life insurance market as one of the most innovative insurers with a product offering that fits today’s customer expectations. The Element AI team will work closely with Edelweiss Tokio Life to create an actionable roadmap for strategic AI deployment for the company, which will ultimately support a detailed AI transformation plan. This work will utilize unique learnings and insights from Element AI to establish technical feasibility and identify AI use cases. Commenting on the development, Nilesh Parmar, Chief Operating Officer, Edelweiss Tokio Life Insurance said, “As an organisation, we are focused on building agility and scalability within our processes and systems. With a single-minded focus on delivering a seamless and superior customer experience, we want to empower ourselves with digital technologies like artificial intelligence that can help us better serve our customers. We are glad to have found...