Insurable Interest Canadian Insurance Blog

Yaelle Gang | November 1, 2019 The Alternative Investment Management Association has published a new handbook on the Canadian alternative investment landscape. “Canada has a long history of excellence in alternatives,” says Belle Kaura, current chair of AIMA Canada and vice-president of legal and chief compliance officer at Third Eye Capital. “The stage is set for the Canadian industry to reach new heights with world-class talent ready to embrace the future and a thriving new liquid alternatives market.” The handbook, which showcases industry thought leadership, is designed to promote the advancement of alternatives by creating greater awareness and understanding of the Canadian market both domestically and around the globe, she adds. Read: Pension plans turning to alternatives for steady returns amid ultra-low bond yields The last time AIMA published this handbook was in 2014. Notably, the 2019 version includes a new section on private credit. Private credit can provide stable returns with modest leverage, notes Kaura, and distressed debt can act as a return-enhancer in downturn conditions. “And the appealing risk-return profile of private credit has led to its emergence as one of the most rapidly growing institutional investment classes, with more than of half of existing investors worldwide expected to increase allocations.”...

Kelsey Rolfe | November 1, 2019 Pensions have been imperilled by corporate insolvency before, but three new amendments to federal laws may create stronger protections for employees and retirees. Changes to the Canada Business Corporations Act went into immediate effect after receiving royal assent in June, and amendments to the Bankruptcy and Insolvency Act and the Companies’ Creditors Arrangement Act take effect today. Further reforms are under consideration. The changes are a result of government consultations in the wake of Sears Canada Inc.’s 2017 bankruptcy. Sears and other high-profile bankruptcies at Nortel Networks Corp. and Algoma Steel Inc. prompted a flurry of headlines, putting real pressure on provincial and federal governments to act, said Kathryn Bush, a partner in Blake Cassels & Graydon LLP’s pension, benefits and executive compensation practice, in a webinar hosted by the Association of Canadian Pension Management this week. Read: Budget proposals for retirement security get mixed reviews from ACPM The changes to the CBCA expand how directors consider the “best interests of the corporation,” which can now include the interests of employees, retirees and pensioners. Some case law had previously suggested that directors’ analyses should include a wider range of stakeholders, but it wasn’t previously encoded in the act. “This is important because it means directors can be required...

The Caisse de dépôt et placement du Québec is investing in La Coop Fédérée, the largest agri-food enterprise in Quebec and the only Canada-wide agricultural cooperative. The investment — alongside the Fonds de solidarité FTQ, Fondaction and Desjardins Capital — of $300 million takes the form of preferred shares. “The agri-food industry, at the very heart of people’s day-to-day life, is an important driver for Quebec’s economy,” said Marc Cormier, executive vice-president and head of fixed income at the Caisse, in a press release. “This investment will allow La Coop Fédérée, one of the world’s largest agri-food cooperatives, to pursue its growth strategy while generating stable revenues for our depositors over the long term.” Read: Navigating the complexities of investing in agriculture Founded in 1922, the Coop represents more than 120,000 members, agricultural producers and consumers. “By supporting the growth of La Coop Fédérée, the Fonds de solidarité FTQ is also supporting [its] 120,000 members, mostly [small and medium-sized enterprises] that help Quebec’s regions prosper,” said Gaétan Morin, president and chief executive officer of the Fonds de solidarité FTQ. “This investment in unsecured capital by the Fonds, in partnership with other Quebec-based institutions, contributes to Québec’s economic development and supports jobs.”  Read: PSP takes majority stake in Australian farm business Read...

Benefits Canada | November 1, 2019 On Sept. 27, the 2019 Defined Contribution Investment Forum delved into the latest trends in behavioural finance and DC plan member engagement, as well as new perspectives on investment opportunities and risk and performance considerations. Here’s what you missed! Seeking better risk levels by adding alternatives to DC plansA defined contribution plan sponsor’s strategic decisions around asset allocation are far more influential to the performance of the pension portfolio than security selection or timing investments. Read more U.S. lessons for Canadian DC pension plans Defined contribution plan sponsors have a tough job. Read more Are automatic DC plan features affecting the pension gender gap?With cohorts in the workforce behaving differently as they prepare for retirement, it’s important for plan sponsors to consider these differences along gender and generational lines. Read more Fundamental reasons for adding alternatives to DC pension portfoliosThere are two fundamental reasons for including alternatives in a defined contribution pension portfolio. Read more A look at how the legal landscape for DC pension plans is changingDefined contribution plan sponsors are facing challenges that will shape the nature of their legal obligations to employees. Read more Find out more about Benefits Canada events. Copyright © 2019 Transcontinental Media G.P. Originally published...

Last December, we took a look at the Republic of the Marshall Islands, a small country in the equatorial Pacific roughly halfway between the Philippines and Hawaii, positioned just west of the International Date Line – and on the ‘front line’ of climate change. While there are lots of significant differences between an urban metropolis such as Toronto (population 3 million) and a community of some 53,000 people spread across five islands and 29 coral atolls, there are lessons to share. Consider this: residents on Majuro – the island with the most residents and also the seat of government – may have to evacuate, possibly within the next 10 years, due to rising sea levels. Backing Up A Bit The Marshalls were occupied by the Japanese during World War II, and the area features dozens of underwater wrecks of wartime ships and aircraft. After the war, the United States took over the administration of the Trust Territory of the Pacific Islands, which included the Marshall Islands. Two of the more significant activities in the 1960s and ’70s involved military testing: Rockets (without live bombs) were fired from California, landing in the Marshalls. US military staff were wont to boast that...

Martha Porado | November 1, 2019 A defined contribution plan sponsor’s strategic decisions around asset allocation are far more influential to the performance of the pension portfolio than security selection or timing investments. “The strategic decision is very important in terms of long-term results and the long-term experience of your plan members,” said Chhad Aul, vice-president of portfolio management at Sun Life Global Investments at Benefits Canada’s 2019 Defined Contribution Investment Forum in Toronto on Sept. 27. Expanding the diversity of assets that are available in DC plans is under-discussed, he added. Read: Custom target-date funds growing in U.S.: survey “For the past 10 years, having a very constrained, a very vanilla set of building blocks for your plan members’ portfolios has led to relatively decent outcomes — using a typical core set . . . Canadian cash, Canadian bonds and then equities essentially across the developed world.” While this might have been enough to produce decent returns in the past, noted Aul, this isn’t likely to be the case going forward. When plan sponsors are adding new assets to the mix, it’s key to consider their risk/return profiles, he said, and that has to be done with a forward-looking lens. A typical balanced fund might have a reasonable risk...

Alethea Spiridon | October 31, 2019 Unifor locals representing VIA Rail Canada Inc. employees have opened bargaining in Montreal as contracts are set to expire for more than 2,000 members. Members identified a number of key issues for contract negotiation, including a strengthened pension plan, according to a press release. The current collective agreements expire on Dec. 31, 2019. Read: Unifor and Fiat Chrysler agreement includes benefits and pension changes “Members at VIA Rail have a two-tiered pension plan, awarded by the arbitrator and argued for by the company,” said Sarah McCue, national representative at Unifor, in an email to Benefits Canada. “Employees hired before 2014 contribute to a defined benefit plan, which is in surplus. The benefit is 1.7 per cent up to the [year’s maximum pensionable earnings] and two per cent above the YMPE times their years of credited service to a maximum of 35 years. Members contribute 8.2 per cent up to the YMPE and nine per cent above the YMPE towards their pension.” However, employees hired after 2014 don’t have the same stable retirement guarantee, she added, as their hybrid plan only provides a benefit of 0.75 per cent of the YMPE times their years of service, with no contributions required for the DB side of...

H.H. Holmes was potentially one of the most prolific serial killers in American history. Happy Halloween, InsuranceNewsNet readers! To celebrate the spookiest of holidays, we decided to share the haunting tale of notorious serial killer H.H. Holmes and his connection to the insurance industry. Born Herman Webster Mudgett, H.H. Holmes was an American serial killer known for the murders committed during the 1893 World’s Fair, but there’s more to Holmes’ story – a lot more. While Holmes confessed to 27 murders, he was paid $7,500 by Hearst Newspapers ($226,000 today) for his sensationalized confession. As most of Holmes’ confession turned out to be exaggerated and later found to be false, authorities struggled to find evidence of just how many murders Holmes had committed and therefore struggled to bring charges against Holmes. Exaggerated tales and a thick web of lies were the standard for Holmes, a known con man and bigamist, but it ended up being his con man ways that ultimately led to his capture and later execution. By July 1894, Holmes had left Chicago with a number of insurance companies on his tail, looking to prosecute the fraudster for arson. Holmes proved hard to catch and was incarcerated only...

Toronto, ON (Oct. 31, 2019) – Apollo, Canada’s largest online insurance marketplace, is considering adding Alien Abduction Coverage to the list of products offered on the Exchange, after hearing from brokers at LeGear Pelling Insurance Agencies Ltd. that there may be a market for it. “Responding to broker demand is key to our business model,” said Apollo CEO Jeff McCann. “With recent feedback from brokers, hopefully there is also a market out there that is willing to underwrite this product in Canada, which we would be happy to consider deploying on the Apollo Exchange so brokers and consumers could access it digitally.” Although this coverage exists in the United States, it is currently unavailable in Canada. Increasingly insurance companies are reducing product capacity in many standard lines of business including property and auto, but secondary specialist markets may consider such a coverage. Clients are seeking specialized coverage like this to meet their unique requirements. Time of year could potentially be increasing demand as statistically speaking, sightings of aliens increase on the last day of October. All of the products on the Exchange are available for immediate quote, bind, and policy issuance, in line with consumer expectations. “Similar to key man...

Lumino Health surpasses 10 million provider ratings Toronto, ON (Oct. 30, 2019) – Lumino Health is celebrating one year of helping Canadians find their healthcare match online. To date, Sun Life Clients have submitted over 10 million ratings for the healthcare providers on Luminohealth.ca – Canada’s premier digital network of health resources. “Lumino Health makes it possible to deliver on Sun Life’s Purpose of helping our Clients achieve lifetime financial security and live healthier lives,” said Chris Denys, Senior Vice-President, Possibilities, Sun Life. “Sun Life processes millions of claims every year from healthcare providers across Canada which means we’re able to hear from real people based on their own experience or that of their family members.” As part of Sun Life’s focus on Sustainability, the company is committed to providing all Canadians with the tools and education needed to live healthier lives. Through investments in community health, thought leadership, and access to health and disability insurance, Sun Life is focused on improving health and wellness in society. “Lumino Health gives Canadians instant access to information about healthcare products and providers,” said Denys. “With just one easy click, Canadians can search for healthcare resources and providers ranked by priority criteria such as...