Insurable Interest Canadian Insurance Blog

The Supreme Court of Canada has ruled in favour of a federal law that prohibits third parties, including insurance companies, from requiring individuals to submit genetic information. The law, Bill S-201, was introduced in 2017 as a private member’s bill by the retired Liberal senator James Cowan, and sponsored in the House of Commons by Liberal MP Rob Oliphant. It aims to offer valuable protections to Canadians’ genetic information, including a prohibition on life insurance companies’ use of genetic tests as a condition of coverage. It also includes exceptions for medical, pharmaceutical, and scientific purposes. Aside from amending the Canadian Labour Code and the Canadian Human Rights Act, the legislation introduced the first nationwide penalties against genetic discrimination, including a fine of up to $ 1 million or imprisonment for five years, reported CBC News. According the news outlet, Cowan and Oliphant were encouraged to push the legislation after being told by geneticists at a Toronto hospital that parents were choosing not to get genetic tests done out of fear that it would have impact their future prospects for employment and insurance eligibility. “It’s the key to precision medicine, personalized medicine,” Cowan told CBC News. As the bill was being...

The Life Insurance and Annuities Committee voted unanimously over vociferous objections to adopt language proposed by the American Council of Life Insurers to shore up Actuarial Guideline 49. Regulators conceded that the changes might not be ideal, but expressed a desire to do something to bring IUL illustrations more in line with actual returns. “This is something that is going on in the marketplace now,” said Doug Ommen, Iowa insurance commissioner. “Our work as regulators, to be frank, is never done. I would support the idea of continuing to work through the life illustration group to address the all of these concerns.” The changes are expected to rein in the illustration of policy crediting rates, said Minnesota regulator Fred Anderson, through a series of changes to the calculation methods. A second big change to add “more conservatism” to the illustration of policy loans, he added. “A general concept behind these issues is selecting a point on the spectrum of, on one side, allowing innovation and on the opposite side, preventing loopholes,” Anderson explained. “If there were 40 people active at (Life and Actuarial Task Force) meetings, and calls on this topic, there are probably 40 different opinions.” Advertisement The background: AG...

Staff  | July 10, 2020 RBC Insurance is offering additional mental-health resources for plan sponsors and their members. The free resources include therapist-assisted online cognitive behavioural therapy through AbilitiCBT, as well as a series of manager mental-health training webinars to help employers support their workforce. These will cover a wide variety of topics, such as navigating the new normal, leading a mentally healthy workplace and how to keep employees engaged. Read: RBC Insurance introduces online wellness program for plan sponsors “In our experience, it’s important to manage employee well-being — particularly when it comes to mental health — with an approach that ranges from preventative through to more acute solutions,” said Julie Gaudry, senior director of group insurance, at RBC Insurance, in a press release. “Especially now with high stress levels related to the pandemic, the ability to quickly triage employees to the right solution helps them get the help they need based on their unique situation.” Read the full article at BenefitsCanada.com

Staff | July 10, 2020 The Canada Pension Plan Investment Board is leading a new tranche of financing for animal-free dairy maker Perfect Day Inc. The financing marks an expansion of Perfect Day’s series C financing to $300 million, to which the CPPIB’s thematic investing group is set to contribute $50 million. The California-based company uses fermentation in microflora to create proprietary protein that can be used to add texture to foods like non-dairy ice cream and butter. Read: OMERS investing in agri-food venture capital fund “This marks the first investment into thematic investing’s new climate change opportunities strategy, which will focus on innovative companies that are well-positioned to respond to the challenges posed by climate change,” said Leon Pedersen, managing director and head of thematic investing at the CPPIB, in a press release. “Sustainable technologies like Perfect Day are poised to capture structural shifts in industrial practices, physical resources and consumer preferences for environmentally conscious options, which are well-suited to our long-term investing approach. We look forward to building our partnership with the company and its management team.” Read: CPPIB posts 2.3% return in Q2, reaching $409.5 billion in assets Read the full article at BenefitsCanada.com

Staff | July 10, 2020 Canada’s 11 largest pension funds should be able to maintain their current credit ratings through ongoing market turmoil, according to Fitch Ratings Inc. Nevertheless, return expectations are under significant pressure from the economic fallout of the coronavirus pandemic, said the ratings agency in a new report. “Fund performance will depend on asset mix, which is largely influenced by a plan’s maturity and risk appetite.” The Caisse de dépôt et placement du Québec and the Ontario Municipal Employees Retirement System are both maintaining their AAA rating, reflecting their structural strength. Read: Vestcor Corp. returns 11.76% in 2019, updates pension admin system “Canadian pension plans generally increased their exposure to private assets in recent years, including private credit, private equity, real estate and infrastructure investments, to capitalize on the illiquidity premium,” noted the report. “Real estate and infrastructure investments can also provide an inflation hedge and, potentially, recurring income. While the illiquidity of these investments can lead to higher returns, they can also yield more concentrated exposures to individual companies or sub-sectors if not carefully managed.” In terms of asset mix, the country’s largest pension funds vary significantly. The Healthcare of Ontario Pension Plan holds the largest percentage of fixed income (61 per...

Two-thirds (67%) of Americans say that the pandemic has been a wake-up call for them to reevaluate their finances, according to a new study by Life Happens, a nonprofit dedicated to educating consumers about the importance of life insurance and other related products for sound financial planning. The survey, “Tough Talks During COVID-19,” asked 2,000 Americans aged 18–56+ how they feel about their finances in light of COVID-19, how it has impacted family conversation, and if they’ve adjusted their behaviors as a result. The study also draws comparisons to a similar survey Life Happens conducted in January 2020 that uncovered a delay in Americans’ life milestones and a greater focus on their finances. Normalizing Family FinancesThe COVID-19 pandemic has sparked open conversations about end-of-life and future emergency plans. Americans say they are now less likely to avoid talking about financial matters at the dinner table than they were before COVID-19—40% compared with 45% avoiding these topics in the survey fielded in January 2020. The top five topics that have dominated dinner table discussions are: 1. Wills and inheritance – 33%2. Current health issues and concerns – 32%3. Life insurance coverage – 30%4. Current financial status – 29%5. Emergency savings – 27% Other, less dominant...

Staff | July 10, 2020 The coronavirus pandemic has prompted a spike in the use of prescription medication for mental-health concerns, according to an analysis by Express Scripts Canada. The analysis found an 11 per cent increase in plan members making claims for antidepressants between January and June 2020, compared to the same period in 2019. As well, 61 per cent of 2019’s total claims volume had already been reached by June 30, 2020. The health benefits manager said its data indicates an increase of new users for medications that treat depressions and these claims continue to climb. “The pandemic has taken a psychological toll on Canadians across the country,” said Dorian Lo, president of Express Scripts Canada, in a press release. “Our research shows that Canadians are increasingly turning to mental-health medications to find some relief.” Read: Mental-health conditions, specialty meds driving drug plan cost increases in 2019: report Medications for asthma and chronic obstructive pulmonary disease saw the largest change in claims volume during the pandemic, noted the analysis, while claims for drugs used to prevent infections saw a steep decline, given that places where people typically transmit infections — workplaces, schools, daycares and gyms — were broadly closed and Canadians were increasingly...

Yaelle Gang, the Canadian Investment Review | July 10, 2020 The coronavirus crisis may be a signal for some pension plan sponsors that it’s time to revisit their appetite for risk. A typical asset-liability study involves stochastic modelling to project thousands of future economic scenarios and see how a pension plan would react under those scenarios, says Dean Newell, vice-president at Actuarial Solutions Inc. Particularly, the plan sponsor would look at implications for funded status, contribution requirements and expenses, among other factors, under the various scenarios and use the outcomes to inform potential plan changes or risk budgeting. When the coronavirus hit, pension plan sponsors paused asset-liability studies and were more focused on immediate concerns, says Gavin Benjamin, senior director of retirement at Willis Tower Watson. “But once everyone got settled in their work-from-home routines and the markets did settle down a bit and recover somewhat, we continue to see an interest and desire in doing asset-liability studies.” Read: Downside protection strategy saves LAPP $1.9 billion While pension plan sponsors are now restarting these studies, they’re not necessarily taking the same form as before, says Daniel Dine, a principal for asset and risk management at Morneau Shepell Ltd. When looking longer term, plan sponsors...

Staff | July 10, 2020 With its recent acquisition of environmental, social and governance data analytics provider Sustainalytics, Morningstar Inc. is taking aim at the disparate ESG disclosure requirements still hampering the investment industry. In a recent report, Morningstar sussed out some of the issues hindering ESG measurement tools. “Simply put, ESG disclosures from issuers are all too often inconsistent and non-comparable and material information is not always available.” One key problem, it noted, is that ESG disclosures often cover different time periods than are released by other, more traditional financial disclosure companies. This makes it more difficult for institutional investors to clearly link ESG data with financial performance over a given timeframe and act on those connections. Read: BCI and partners establish responsible investing platform “For their part, public companies produce voluminous sustainability reports, but they often pick and choose indicators from a variety of standard-setting organizations,” said the report. “These reports may not contain information that is material given the firm’s business context and do not help investors meaningfully understand a company’s ESG risks while impeding comparisons between companies. “Many of these reports read more like marketing documents than clear discussions of material ESG risk or areas of investment in green technologies,...

The COVID-19 pandemic has weighed heavily on Canadians not just in terms of their income and physical health, but also their mental well-being. That’s the forgone conclusion based on the findings of new research from Express Scripts Canada (ESC), which found that the number of people who made claims for antidepressants between January and June this year was 11% higher than the number recorded during the same period in 2019. ESC also found that overall claim volumes rose by 20% during the pre-isolation period, suggesting that patients might have been getting prescriptions filled despite authorities’ warnings of possible drug shortages resulting from stockpiling. That behaviour, in turn, indicates that Canadians were acting on fear and panic spurred by the coronavirus, another sign of possibly compromised mental well-being. The data also reflect a rise in new users of medications used to treat depression, which ESC said is continuing even now. “The pandemic has taken a psychological toll on Canadians across the country,” said Dr. Dorian Lo, president, Express Scripts Canada. “Our research shows that Canadians are increasingly turning to mental health medications to find some relief.” ESC’s findings track with those from a survey conducted by Statistics Canada from April 24...