Insurable Interest Canadian Insurance Blog

State insurance regulators sided with an industry trade group Thursday in choosing language designed to tamp down wayward indexed universal life illustrations. But not before a rift further widened between industry factions. Life Actuarial Task Force members voted 15-2 in a “straw poll” to proceed with language put forth by the American Council of Life Insurers. The language is designed to shore up Actuarial Guideline 49 and bring IUL illustrations more in line with actual returns. The task force plans to present a proposal for adoption by its parent A Committee during the committee’s July 10 call. California and New York voted no. The task force accepted the ACLI language over an “independent proposal” signed by a group of 13 executives, analysts and academics. Advertisement Some regulators agreed that the ACLI changes might end up being just a short-term fix. But the IP proposal goes beyond the charge of the task force, said Fred Anderson, deputy commissioner of insurance for Minnesota. “I don’t think making all IUL illustrations substantially more conservative was ever on the table with respect to the current charge,” he said. “If we happen to see further abuses or aggressive behavior on the illustrations side, those proposals...

Martha Porado | May 29, 2020 In the group benefits world, the first rumblings of the effects of the coronavirus pandemic came when plan sponsors started asking, as early as January, about their travel insurance provisions. “Clients were worried about their business travellers and expatriate employees, in China mostly, and afterwards for their employees travelling for their winter vacations,” said Daniel Drolet, partner in group benefits at Normandin Beaudry, in a webinar hosted by the firm on Thursday. But it wasn’t long before other areas of the market had to spring into action, he noted. “When [the coronavirus] started emerging in March here in North America, the questions started to shift toward disability benefits. Carriers were really quick to respond with a simplified process. They removed the waiting period to be able to receive short-term disability claims for employees. . . . They also added a simplified form to be able to claim for disability benefits without having the need to see a doctor in person.” Read: How will the coronavirus impact long-term disability claims? As the situation worsened, many employers had to quickly implement temporary layoffs. Drolet observed that the vast majority of employers he worked with made every effort to maintain all benefits provisions...

Staff | May 29, 2020 The Association of Canadian Pension Management’s Alberta regional council is highlighting the need for “made-in-Alberta” measures focused on pension plan sponsors, administrators and members due to the financial impact of the coronavirus pandemic. In a submission to the provincial government, the council listed recommendations around pension contributions and funding, commuted values, plan administration, defined contribution plans and the Canadian Association of Pension Supervisory Authorities’ agreement on multi-jurisdictional pension plans. “Currently, Alberta employers critically need to conserve cash in order to survive the current economic crisis,” said the letter. “However, we expect a number of pension plan sponsors and employers will not survive and become insolvent in the short term, which raises heightened concern among our members for the security of pension benefits accrued under the affected pension plans.” Read: An overview of Canadian DB pension relief measures during coronavirus For the funding of pension plans, its recommendations in the short term included: the continuation of ongoing contributions, covering current service and going-concern special payments, to promote liquidity and benefit security; the deferral of special payments on a solvency basis, at the option of the plan sponsor, based on certain conditions; allowing plan sponsors that are committed to filing a valuation to immediately...

LIMRA has partnered with the Society of Actuaries (SOA) and TAI have joined forces to conduct groundbreaking research on the effects of the COVID-19 pandemic on individual life mortality. According to Marianne Purushotham, corporate vice president and head of LIMRA Data Sciences and Center of Excellence in Analytics, the study will help LIMRA’s members understand the effect of the novel coronavirus on mortality, and determine which market segments will be most likely to see the greatest impact. “This data may also help our industry predict potential outcomes from future pandemics, enabling life insurers to conduct more effective scenario planning and preparations,” Purushotham added. The joint mortality experience study, which aims to look at data now and into the near future, will draw from individual life insurance data stored in the TAI Reinsurance Administration system. With over 90% of North America’s top 50 life insurers included, the system will help provide a faster and more consistent data collection process. LIMRA, the SOA, and TAI are in the process of creating their inaugural report on the study, which is expected to be released later this summer. “This joint research project will provide a deeper understanding of the current state of mortality in...

Sun Life and RBC Insurance maintained their spots as the top two companies by market share spots in 2019, but the competition is heating up, the report noted. Brookfield Annuity overtook the Bank of Montreal to claim third place, with 13 per cent of the market. And the total share of the top three insurers fell from 72 per cent in 2018 to 64 per cent in 2019. iA Financial Group, notably, went from five per cent to 12 per cent of the market in 2019, while Canada Life’s share dipped slightly, from 13 per cent to 11 per cent. Looking ahead to the rest of 2020, the report noted it remains unclear how the coronavirus pandemic will impact the risk-transfer market. “For many plan sponsors, the impact of COVID-19 will be a significant adverse effect on plan funded ratios,” it said. “In fact, the Office of the Superintendent of Financial Institutions has issued a directive imposing a temporary hold on all commuted-value transfers and buyout annuity purchases without regulatory consent. Broadly speaking, annuity purchases may have been placed on hold due to deteriorated funded status, market uncertainty and volatility, and lack of market liquidity.” Read the full article at BenefitsCanada.com

Staff | May 28, 2020 Mawer Asset Management Ltd. is appointing Crista Caughlin as lead manager of Canadian bond, global bond and Canadian money market strategies. Caughlin, who joined Mawer in May, will take over in July from the firm’s chief investment officer Paul Moroz, who’s been acting as interim co-manager of fixed income strategies. He’ll continue to act as co-manager for the firm’s global equity and global small-cap strategies. Read: Mercer appoints Canadian and U.S. heads of responsible investing Before joining the firm, Caughlin was a portfolio manager for fixed income and head of macro research and strategy at Connor, Clark & Lunn Investment Management Ltd., where she worked in various roles on the fixed income team since joining in 2001. James Redpath, the former lead manager of Mawer’s fixed income strategies, resigned in late May due to health reasons following a personal leave of absence. Read: Schroders appoints new North American CEO Read the full article at BenefitsCanada.com

Term life insurance new premium rose 8% in the first quarter, with 40% of term life writers reporting double-digit increases, according to LIMRA data. The term premium increase is the highest since the second quarter 2007, according to LIMRA’s First Quarter 2020 U.S. Individual Life Insurance Sales Survey. Sixty percent of term life writers reported positive growth. LIMRA attributed some of term’s success to online access and tools that helped with sales to homebound consumers. Other life products did not fare as well but that was not unexpected because of a late 2019 sales push before a new CSO table took effect. Term market share jumped to 24% in the first quarter 2020. Since 2011, term premium market share has been in the 21-22% range. Insurance brokers account for the largest share of term premium (38%) and reported growth of 11% over first quarter 2019, LIMRA reported. Advertisement Outside of term life sales, most of the remaining life insurance products posted sluggish first-quarter sales, LIMRA reported. The total number of individual life insurance policies sold in the first quarter fell 1%, compared with the same quarter of the prior year. Universal life new annualized premium fell 3%, driven primarily by...

Foxquilt leaders offer practical business advice amid global pandemic and lockdown Toronto, ON (May 28, 2020) – The current situation has taught many businesses, including our own Foxquilt team, how to adapt to working remotely in a new normal, a new virtual world. Usually, we host our Foxquilt Entrepreneur Summit every quarter to provide a place for business owners to learn and network with one another. However, we should all continue staying at home, practicing physical distancing and avoiding large in-person gatherings. That’s why we’ve adapted to bring the event to your home by hosting our first virtual Foxquilt Entrepreneur Summit! We will be focusing on “How to Take Advantage of Our New Virtual World: Practical Business Advice From Foxquilt’s Leaders.” On June 4th, 2020, learn how you can make the most out of your post-COVID business plan with advice and digital solutions from our Tech, Marketing, Finance and HR Chief Officers as well as our own Foxquilt CEO. Then, get a chance to virtually network with other business owners and entrepreneurs in sessions led by the Foxquilt leadership team. To learn more about the event and our speakers, visit get.foxquilt.com/virtual-fqes-june2020. There are a limited number of virtual spots, so...

PR Newswire As the coronavirus pandemic continues to impact everything from the economy to daily life, worries over personal safety have driven 83 million Americans to consider buying life insurance or increasing their life insurance coverage, according to a new survey from ValuePenguin.com by LendingTree. Key Findings: 1 in 4 Americans say COVID-19 has increased their interest in life insurance, with men more likely to agree than women.  38% of men said they want to buy life insurance or increase their life insurance coverage, compared to just 14% of women. Most people already have some life insurance, but many aren’t sure what it actually does. While 65% of all respondents said they already had life insurance in place, 40% claimed they were not very familiar with, or did not know what life insurance does. Over 30% of Americans don’t know how much life insurance they need. While the appropriate amount of coverage changes for every person based on their financial needs, most respondents came in with estimates that were too low for a typical scenario. Only 10% cited the common rule of thumb that coverage should be equal to 10 times their annual salary. How much does life insurance cost and...

Kelsey Rolfe | May 28, 2020 The union representing more than 200,000 Canadian public sector employees says the Public Sector Pension Investment Board’s investment in a for-profit, long-term care provider is inconsistent with its fiduciary and legal obligations to plan members. The Public Service Alliance of Canada is calling on the PSP to end its investment in Revera Inc., its wholly owned subsidiary, and to transfer its management and control to provincial health authorities across Canada. “We’ve raised these issues in the past on several occasions, but we’ve got nothing but lip service back,” says James Infantino, pensions and disability insurance officer at the PSAC. “We think the way they’ve managed these facilities put the [pension] plan in a situation of undue risk and that is contrary to its obligations toward plan members.” Read: Unions across job sectors crying out for increased safety measures Revera, which operates long-term care and retirement homes across the country, is the target of a $50-million class action lawsuit launched by families of coronavirus victims in the company’s Ontario facilities. The families allege the facilities lack proper sanitation and testing protocols to prevent the spread of the virus. In a May 11 letter to Neil Cunningham, president and chief executive officer at the PSP,...