Insurable Interest Canadian Insurance Blog

Staff | July 9, 2020 Private drug plans saw the largest yearly increase in their average eligible costs in 2019, according to Telus Health’s annual drug trends report. The report attributed the rise to a jump in the use and cost of specialty drugs and a growth in younger Canadians using medication for mental-health challenges. It also noted the repeal of the OHIP+ program in Ontario and an increase in overall costs for traditional drugs also contributed to the 7.6 per cent spike in private plans’ eligible monthly costs across all plan members. This is well up from a decline of 3.6 per cent in 2018. Provincially, Ontario saw the highest spike in eligible costs at 10.2 per cent, largely attributed to the OHIP+ rollback — but, Telus Health noted, when it removed costs for plan members under age 25, eligible costs in the province had still increased 5.4 per cent, compared to a 2.4 per cent drop in 2018. Quebec saw cost increases of 5.8 per cent (up from a three per cent increase in 2018), followed by the Atlantic provinces (4.2 per cent, up from a 1.1 per cent decrease in 2018) and western provinces (four per cent, up from a 0.3 per cent drop in...

Staff | July 9, 2020 While the Pension Investment Association of Canada strongly supports Nova Scotia’s recent pension funding changes, it’s calling on the provincial government to tweak the provision for adverse deviation calculation and access to solvency reserve accounts. Nova Scotia’s pension funding changes took effect on April 1, reducing solvency funding to 85 per cent, with any shortfalls required to be funded over five years and enhanced going-concern funding to be funded over a period of 10 years, up from 15 years previously. The changes also introduced a PfAD calculated by combining a fixed five per cent with a percentage based on the pension plan’s combined target asset allocation for non-fixed income assets. Read: N.S. moving forward with new DB pension solvency regime In a letter to the Nova Scotia government, the PIAC said it’s in favour of the province’s approach to the PfAD and its broad alignment with other provincial regimes, but it called for further optimization. “The regulations, for example, do not appear to give credit for better alignment of fixed income portfolio duration with liability duration, which is an important consideration for most plan sponsors in their basic portfolio construction,” wrote Simon Fréchet, chair of the PIAC, in the letter. “And conversely, the regulations appear to give...

State insurance regulators are set to take an important vote Friday on rule changes designed to rein in indexed universal life insurance illustrations. The Life Insurance and Annuities Committee will vote on language proposed by the American Council of Life Insurers to shore up Actuarial Guideline 49 and bring IUL illustrations more in line with actual returns. But not everyone is happy with the proposed changes to AG 49. Birny Birnbaum, executive director of the Center for Economic Justice, submitted a lengthy letter to the life and annuities committee this week and is expected to speak forcefully against adoption. Birnbaum challenged committee members to decipher and explain a 55-page IUL illustration from a leading insurer selling the product. “If you, as Commissioner of Insurance in your states, cannot (explain the illustration), it should be evident that illustrations – used for selling life insurance products for which consumers transfer some or all of their savings in hopes of achieving future retirement security – are broken and need a major re-imagining and re-engineering to actually protect consumers.” Advertisement Birnbaum urged the committee to reject the ACLI language in favor of a second proposal, known as the Independent Proposal, signed by a group...

The class action was filed in June 2016, in the Western District of Missouri by Michael Vogt and other individuals who owned universal life insurance policy form 94030 issued by State Farm. The lawsuit alleged that State Farm breached the terms of the policies by overcharging policyholders through cost of insurance provisions causing policies to lose value and in many cases lapse, leaving many without life insurance. Trial commenced June 1, 2018 and the jury awarded $34.3 million to approximately 24,000 Missouri policyholders. State Farm appealed to the Eighth Circuit asserting various errors and Vogt cross appealed. Vogt prevailed on all issues. “We’re very happy with the court’s decision to affirm the trial court,” said John Schirger, co-lead counsel and founding partner of Miller Schirger LLC. “We hope that these policyholders, who for decades were unknowingly overcharged, will soon finally receive payments.” “Many insurers define the cost of their insurance fees by delineating factors outside typically considered mortality elements and in this case the costs of charges weren’t outlined with specificity,” said Norman Siegel, co-lead counsel and founding partner of Stueve Siegel Hanson LLP. “The court’s decision affirms that, simply put – if you want to charge for it, you...

Staff | July 8, 2020 The Ontario Teachers’ Pension Plan’s 2019 climate change report contains its first-ever, independently assured portfolio carbon footprint. Even as the plan’s assets grew in 2019, it’s overall carbon footprint fell by about 15 per cent, driven in large part by the sale of a particularly high-emitting private asset, according to the report, which was assured by Deloitte Canada. Between 2018 and 2019, the plan’s public equity exposure, including derivatives and short positions, grew from more than $16.5 billion to $28.7 billion, with its carbon footprint falling from 283 tonnes of carbon dioxide emitted per $1 million of exposure to 203 tonnes. Read: How Ontario Teachers’ is embracing a systematic approach to ESG integration Meanwhile, private assets grew from $92.2 billion to $94 billion, with tonnes of CO2 emitted per $1 million falling from 59 to 41. By sector, utilities accounted for 34 per cent of the fund’s emissions exposure, followed by materials (25 per cent), energy (14 per cent), industrials (11 per cent), consumers (nine per cent) and information technology and communications (four per cent). Emissions reduction efforts in the utilities, materials and energy sectors played a significant role in the overall shrinking of the fund’s carbon footprint. “The impacts...

Staff  | July 8, 2020 Japan Tobacco International is launching a global equal family leave policy for all of its employees. The new global strategy, which goes beyond the national family leave provisions in 80 per cent of the 81 countries in which the multinational is located, offers a minimum of 20 weeks fully paid leave for employees, regardless of gender, sexual orientation or whether employees become parents by giving birth or through adoption or surrogacy. The new plan will be rolled out on Jan. 1, 2021. “Our new family leave policy is a great milestone in our diversity and gender equality journey,” said Eddy Pirard, president and chief executive officer of JTI, in a press release. “We are proud to introduce the new gender-neutral benefit that supports all families, giving every parent equal opportunity to spend quality time with their children, without worrying about the impact it could have on their finances or careers.” Read: How to bridge the parental leave divide The organization noted the new policy will make a significant difference to employees, particularly in countries where there’s little or no legal requirement to provide family leave. “Men can still be stigmatized for taking time out of their careers,” said Christiane Bisanzio, the company’s vice-president...

Open-source frameworks provide blueprint for better protecting society against systemic catastrophic events Toronto, ON (July 1, 2020) – Lloyd’s, the world’s leading specialist insurance and reinsurance market, has published a number of ways the insurance industry could fast-track global economic and societal recovery from the far-reaching impacts of COVID-19. These include three open-source frameworks[1], that help build future resilience through innovative partnerships and products together with a Centre of Excellence to better understand, model and provide insurance for systemic catastrophic events. The solutions and frameworks, developed in conjunction with our UK and Global Advisory Groups[2], are detailed in Lloyd’s new Supporting global recovery and resilience for customers and economies: the insurance response to COVID-19 report. Following interviews with executives and experts across key global industries, the proposals seek to address short, medium and long-term challenges customers face as they begin to recover and reopen.[3] The proposals include solutions for the reopening of businesses against the threat of further waves of COVID-19, building greater resilience across global supply chains as well as the digital economy, and preparation and protection for the next systemic catastrophic event. As the COVID-19 pandemic continues to devastate economies and communities, with impacts requiring resources that can...

Palo Alto, CA (July 8, 2020) – SkyWatch.AI, the leading telematics-based drone insurance company, today released their new online policy management platform. The revamped platform offers an advanced streamlined user experience with a modern design and improved functionality when purchasing and managing drone insurance policies. The system was created to help drone pilots, fleet managers, brokers and affiliate partners easily control and manage their insurance online. The new comprehensive platform is currently available on web and mobile web, and will soon be released for SkyWatch.AI’s mobile app as well. Throughout the new system’s development process SkyWatch.AI participated in Google for Startups Growth Program. Under the guidance and mentorship of Google’s expert team, SkyWatch.AI’s R&D team developed this innovative drone insurance management system. “During the program, we provided SkyWatch with the best of Google to help them grow. It was a great pleasure to have the SkyWatch team on our program, watching them achieve new targets,” says Lior Noy, Startups Growth Lead at Google Israel. “We are thrilled to debut our improved drone insurance policy management system to insured SkyWatch.AI pilots, our affiliate partners, brokers, and to the drone industry as a whole,” says Ori Blumenthal, SkyWatch.AI’s CTO and Co-founder. “The...

Staff | July 8, 2020 Virtual-care options are gaining ground, according to the 2020 Sanofi Canada health-care survey. Looking at a scenario where plan members would receive health-care services through secure digital chat or video devices — where the health-care professionals aren’t the member’s usual providers, but would be able to share the consultation information with them if requested — 71 per cent said they’d be willing to use these services. Plan members between ages 18 and 34 were more likely (76 per cent) to say so compared to those aged 55 and older (63 per cent). “Virtual health care is expanding and rightly so,” said Mélina Lamarche, director of product development at la Capitale Insurance and Financial Services and a member of the Sanofi Canada advisory board. “It provides personalized medical support anytime, anywhere. The financial benefits are significant and employees are very interested. They are ready. The time has come to seize such opportunities to reinvent group insurance through digital means.” Read: Canadians cite 91% satisfaction rate with virtual health care The survey also found 74 per cent of plan members said they’d be open to allowing their physician to get a sample of their DNA by cheek swab so they can prescribe a medication most likely to be effective. Of 15 potential...

Business Wire KKR & Co. and Global Atlantic Financial Group Limited today announced the signing of a strategic transaction where KKR will acquire all of the outstanding shares of Global Atlantic, a leading retirement and life insurance company. After closing, Global Atlantic will continue to operate as a separate business with its existing brands and management team. Global Atlantic serves more than two million policyholders through its retirement and life insurance products. It is one of the largest fixed rate and fixed indexed annuity providers in the United States, offering annuities for individuals through a network of banks, broker-dealers, and insurance agencies as well as life insurance for individuals and corporates. Global Atlantic is also a leader in the institutional channel, providing customized reinsurance solutions to its life and annuity company clients. “We are thrilled to have a new, long-term partner in KKR,” said Allan Levine, Chairman and Chief Executive Officer of Global Atlantic. “With its global presence, investment acumen and long-term focus, we believe we will be even better positioned – financially and strategically – both to help Americans address the financial challenges they face today and to help our institutional channel clients achieve their strategic, risk, and capital...