Insurable Interest Canadian Insurance Blog

For many, the toughest leadership test is now looming: how to bring a business back in an environment where a vaccine has yet to be found and economies are still reeling By Kevin Sneader & Bob Sternfels → Read the whole report Chicago, IL (May 1, 2020) – The 1966 World Cup marked a low point for Brazilian soccer. Although the winner of the previous two tournaments, the team was eliminated in the first round, and its star player, Pelé, failed to perform. Fouled frequently and flagrantly, he threatened never to return to the World Cup. Many wondered if Brazil’s glory days were over. Four years later, however, Brazil won again, with such grace and style that the 1970 team is not only widely regarded as the best team ever to take the pitch but also as the most beautiful. And Pelé was named the player of the tournament. Making this turnaround required innovation, in particular, the creation of a unique attacking style of soccer. It required building a cohesive team, even as most of the roster changed. And it required leadership, both in management and on the field. The result: by reimagining everything, Brazil came back stronger. As businesses...

Kelsey Rolfe | June 1, 2020 The Ontario government is giving health-care providers, including dentists, massage therapists, optometrists and psychologists, the green light to gradually reopen their practices. The order from the province’s chief medical officer of health also included chiropractors, physiotherapists, dieticians, naturopaths and acupuncturists. However, it stipulated that the approved health-care providers can only reopen if their regulatory colleges allow them to do so and if they follow Ministry of Health requirements for physical distancing and sanitization. The order also encouraged providers to limit in-person visits for the time being. Health-care providers started reopening their practices in British Columbia, Alberta, Saskatchewan, Manitoba, New Brunswick and Prince Edward Island in May. Quebec is allowing providers to do so as of today and Nova Scotia as of June 5. Read: Canadian plan sponsors seeing sharp declines in health, dental claims Chris Pryce, founder and president of Human Capital Benefits, says the order could mean that plan sponsors with employees in Ontario will start to see an increase in paramedical claims over the coming months, though he doesn’t expect them to hit their pre-pandemic levels in the short term. “I do not [expect] we’re going to see 130 per cent of what we had before, but certainly we will see...

A resident of Enderby, B.C. is in dire financial straits following an ill-fated decision to opt out of the province’s Medical Services Plan (MSP) last year. As reported by CBC News, 43-year-old Benjamin Fuller first chose to leave the province’s health insurance program five years ago. The province’s Medicare Protection Act mandates that all residents should be enrolled in the MSP program, but they have an option to opt out for 12 months at a time. “He opted out when he realized there was a process for it,” his wife Kristina Fuller told CBC News, explaining that he wanted to save on the $35 premium that he would have had to pay for the MSP. Since then, Fuller has been opting out of the program yearly, with the last opt-out date on July 1 last year. Meanwhile, MSP premiums were eliminated by the B.C. NDP government at the start of 2020. According to the provincial government website, those who exit the MSP program must shoulder the expenses for all medical, hospital, and other health-care services they get until the 12-month opt-out period has elapsed. “You will not be able to opt back in, in the event of an unforeseen medical...

Staff | May 29, 2020 The Investment Industry Regulatory Organization of Canada is nominating three candidates for upcoming independent director positions on its board. The nominees — Malcolm Heins, Jennifer Newman and Laura Tamblyn Watts — will be subject to a formal election in September at the organization’s annual meeting. “IIROC’s board is confident that the nominees demonstrate a strong commitment to risk management, investor protection and an improved investor experience,” said Paul Allison, the chairman of IIROC’s board, in a press release. “Mr. Heins, Ms. Newman and Ms. Tamblyn Watts have established themselves throughout their careers and advocacy work as strong champions for effective and responsive regulation.” Read: Nova Scotia Teachers’ names new trustee chair, OMERS promotes Ecclestone Heins, a lawyer, became the chief executive officer of the Law Society of Ontario in 2001. In 2015, he became chair of the Ontario Expert Committee to Consider Policy Alternatives for the Regulation of Financial Advisory and Financial Planning Services. He’s currently a member of the Investor Advisory Panel for the Ontario Securities Commission. Newman is currently the senior managing director for real estate operations and special projects at the Ontario Teachers’ Pension Plan. Tamblyn Watts is also a lawyer. In addition, she’s president and chief executive officer of seniors’ advocacy and...

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