Insurable Interest Canadian Insurance Blog

Sun Life emerged delighted with its role in an $885 million Morneau Shepell annuity buy-in and backed the trend of large retirement plan deals to continue. Morneau Shepell bought several contracts from Stelco Hamilton Works via complex transactions involving four Canadian insurers: The Canada Life Assurance Company, Sun Life Assurance Company of Canada, BMO Life Assurance Company and Co-operators Life Insurance Company. The deal covers 2,725 retirees and beneficiaries, deferred vested and active/suspended participants. Brent Simmons, Senior Managing Director and Head, Defined Benefit Solutions at Sun Life told LHP the company was pleased to play a part in helping plan members secure their retirement and help de-risk the defined benefit pension plan. He said: “We help defined benefit pension plan sponsors in a couple of different ways. We help them better manage their assets to match their liabilities and if you think about it as an insurance company, we are uniquely positioned to do that because we have more than $150 billion that we’re managing for ourselves, and we manage it in such a way that the assets and liabilities move together.” Sun Life also provides risk transfer, like in this instance, taking on the responsibility of the paying the...

For long-term care insurance (LTCI) policy holders, their plans’ claims-payment methodology could represent a crucial but often-overlooked stumbling block. That was the point made by Tricia Pilone, president of life-insurance brokerage agency CPI Companies, in a recent article. “When it comes to indemnity versus reimbursement products, carriers sell either one type of product or the other, and they do not offer the option of switching from one model to another,” she wrote in InsuranceNewsNet magazine. Noting that reimbursement-based and indemnity-based products don’t differ in price, Pilone said that most, if not all, policies that have been traditionally sold through the decades follow the reimbursement method of claims payment. For families of insured persons who qualify for the policy’s benefits, this creates a challenge of understanding how to submit bills for reimbursement for qualifying medical care. “An average consumer, with an above-average level of education and competence … in almost all cases would need an insurance professional to help them deal with the claims department,” she said. She shared her experience with a couple, Betty and Bob, who each had an LTCI policy from the same company. Bob was at an age when he needed a level of physical assistance that...

Canadian workers who rely on company pensions for retirement income suffer when their company’s defined-benefit plans are underfunded. And according to a new report, their hardship may be coming as a result of companies favouring one other stakeholder group. In a study of 90 companies listed on the TSX Composite Index that have defined-benefit pension plans, the Canadian Centre for Policy Alternatives (CCPA) found that only a handful completely funded their workers’ pension funds in 2017 — the same year that those 90 companies paid out billions of dollars in shareholder dividends. According to the CCPA, the 90 defined pensions experienced a collective funding shortfall of roughly $12 billion in 2017. Meanwhile, the shareholders of the companies responsible for those pensions — which usually include senior executives and board members with a say on how free cash is used — received $66 billion in dividend payments. “I’m not against companies paying dividends. But if they can afford to pay the shareholders, they can afford to fund the pensions,” David McDonald, senior economist at the CCPA and co-author of the report, told the Toronto Star. The problem, argued McDonald, lies in the statutory minimums dictated by pension regulations. Companies are required...

Equitable Bank has announced a new partnership to expand its CSV Line of Credit program. Through a newly forged arrangement with the Empire Life Insurance Company, Equitable Bank is allowing Empire Life policy owners to borrow up to 90% of their life insurance policy’s cash surrender value without making ongoing payments and affecting the growth of their policy. “We are pleased that more and more well established insurance providers such as Empire life are recognizing the value in our CSV lending products,” said Equitable Bank president and CEO Andrew Moor. “Empire’s vision of being Canada’s most convenient insurance and investment company is both admirable, and one we can relate to as Canada’s Challenger Bank.” Launched in December, the bank’s line of credit program was originally made available to clients of Canada Life, which at the time included the Great West Life and London Life brands; more recently, the program was opened to clients of BMO Insurance. To be eligible for the offering, policyholders must own whole life insurance policies that they obtained from a partnered insurer, and the policy’s cash surrender value must be adequate to secure a loan. “We are constantly looking for ways to better serve our customers”...

Equitable Bank announced Sept. 3 a new partnership with Empire Life. Through the Equitable Bank CSV Line of Credit, Empire Life policy owners can borrow up to 90 per cent of the cash surrender value of their insurance policies without making ongoing payments and affecting the growth of their policy. “We are pleased that more and more well established insurance providers such as Empire life are recognizing the value in our CSV lending products” says Andrew Moor, President and Chief Executive Officer, Equitable Bank. “Empire’s vision of being Canada’s most convenient insurance and investment company is both admirable, and one we can relate to as Canada’s Challenger Bank.” Equitable Bank’s CSV Line of Credit is currently available to Canadians aged 50 and over who have a whole life insurance policy with a partnered insurer, and adequate cash surrender value available in their policy to secure a loan. Equitable has previously announced CSV Line of Credit partnerships with Canada Life and BMO Insurance. To learn more, consult this article. Read the original article at insurance-journal.ca

The National Association of Insurance Commissioners creates model laws for states to pass. The controversial gender identification issue came up Tuesday as state insurance regulators continued debating its long-delayed “policy overview” summary to accompany life insurance sales. A National Association of Insurance Commissioners’ working group was working through language in the policy overview when it took up a request by Pacific Life to change “gender” to “sex.” Birny Birnbaum, executive director of the Center for Economic Justice, questioned whether the traditional “sex” designation really serves everyone. “What does a life insurance company do if somebody doesn’t put in male or female, or if somebody puts in what they view to be their current gender to be as opposed to their birth gender was?” he asked. “What do you do with somebody who is transgender?” “I think that’s the point of proposing the change,” said Michael Lovendusky, vice president and associate general counsel for the American Council of Life Insurers. “Sex is chromosome related and is what sound underwriting is based upon, not one’s opinion about what one’s gender is.” Richard Wicka, deputy chief legal counsel for the Wisconsin Office of the Commissioner of Insurance, sought to defuse any hint of...

Staff | September 3, 2019 Capital Group has appointed Rick Headrick as president of its business in Canada. With more than 20 years of industry experience, he was most recently the president of Sun Life Global Investments Canada Inc. In that role, he was responsible for growing the distribution of investment funds through financial advisors and institutional retirement plans across the country. Headrick was also vice-president of Sun Life’s International Investment Centre, where he established and led the organization’s global wealth platform. Read: Sun Life shakes up leadership team to streamline client experience “I have known and respected Capital Group for decades and the opportunity of leading their Canadian business is a tremendous responsibility,” said Headrick, in a press release. “Throughout my career, I have had opportunities to grow businesses within the Canadian market and to do that with Capital Group and maintain its special culture will be an honour.” To ensure a smooth transition, Headrick will work closely with Mark Tiffin, the current president and general manager, who is retiring at the end of the year. “Canada is a vital market to Capital Group and Rick’s leadership and deep experience in the financial services industry will be a good fit,” said David Hummelberg, executive vice-president and principal operating officer of...

Staff  | September 3, 2019 After increasing by 15.1 per cent in 2017, the assets under management of the world’s 300 largest pension funds fell by 0.4 per cent in 2018, according to data from Willis Towers Watson’s Thinking Ahead Institute. It found the 300 funds’ total assets under management was US$18 trillion for the year. “A tougher market environment in 2018 meant AUM growth paused, but the underlying trend remains one of growing pension markets worldwide,” said Bob Collie, head of research at the Thinking Ahead Group, in a press release. “The pace of change in the investment world is a challenge, and scale is a huge advantage in a lot of ways.” Read: Willis Towers Watson to acquire Canadian investment manager Breaking down the numbers, the report found defined contribution assets increased by 5.1 per cent and defined benefit assets declined by 0.2 per cent in 2018. Also, looking at 15 out of the top 20 funds’ annual reports, it found 11 funds highlighted the importance of sustainable and responsible investment. “Many of the most interesting and important developments start with the largest funds, and as new investment ideas like the total portfolio approach and universal ownership gain traction in...

New holistic cyber reinsurance solution launched today by co-creators Zurich, Switzerland (Sept. 2, 2019) – Swiss Re and Capsicum Re, the specialist reinsurance broker, are pleased to announce the launch of Decrypt, a new holistic cyber reinsurance solution. Decrypt provides a single, flexible, end-to-end solution to insurers’ cyber exposure challenges, including embedded, silent, and affirmative cyber risks. Decrypt’s modular approach is comprised of risk identification, quantification and transfer. It offers market-leading cyber-risk evaluation expertise and a lead line from Swiss Re of up to USD 50 million per client with the support of a growing pool of risk transfer capacity. Anthony Cordonnier, Head Cyber Product Management at Swiss Re, said: “Decrypt gives insurance companies a unique understanding of their portfolios’ affirmative and silent exposures, and offers protection against the aggregation of cyber losses across different lines of business.” These benefits can be offered because of the exposure evaluation methodology and a superior dataset. Maya Bundt, Head Cyber & Digital Solutions at Swiss Re, said: “Decrypt is the first holistic cyber solution that helps insurers identify and manage their cyber risk exposures, as well as meet growing regulatory and internal requirements.” Ultimately, Decrypt delivers substantive immediate value to clients, while bringing...

September Traffic Spotlight heads back to school zones Regina, SK (Sept. 3, 2019) – With kids across Saskatchewan going back to school, SGI and law enforcement are shining the Traffic Safety Spotlight on school zones for the month of September. With that in mind, the teacher’s pets at SGI decided to test your knowledge with a special Pop Quiz on School Zone Safety! “Think a test on the first day of school is unfair? It’s not, since you’re actually being tested on all of these things every time you drive through a school zone, and you don’t want to fail,” said Penny McCune, Chief Operating Officer of the Auto Fund. Multiple choice: What can drivers do to #KeepKidsSafe? Slow down and follow the reduced speed limits Avoid all distractions, and pay attention to the road Be prepared for the unexpected, like excited kids jaywalking Don’t U-turn in school zones or park in “No Stopping” areas When dropping off kids, have them exit curbside on the same side of the street as the school Obey crossing guards, crosswalks and traffic control devices All of the above Of the following choices, which represents the single biggest risk to children in Saskatchewan school...