Insurable Interest Canadian Insurance Blog

Cassandra Williamson-Hopp | August 29, 2019 As the labour dispute between Western Forest Products Inc. and United Steelworkers Local 1-1937 heads into its third month, tensions are running high over health benefits.  Employees who are members of the Steelworkers chapter have been on strike since July 1, 2019. The proposed collective agreement in question includes concessions on a number of issues, including pension plans, long-term disability benefits and seniority rights, according to the strike notice. As well, the Vancouver-based lumber company said in a recent email to workers it would cease covering health benefits during the strike as of September. Up to this point, Western Forest Products had continued to pay the premiums to keep the benefits intact. The union called the decision “an extraordinary and vindictive move,” in a publicly released bargaining update. Read: Toronto Foodora couriers to vote on union certification In its communication to employees, Western Forest Products said the trustees of the USW-Coastal Forest Industry Health & Welfare Plan confirmed in a memorandum that the company has no obligation to provide benefits during the strike. The union maintains this is untrue, pointing to a 1993 motion that established union members would reimburse their employer for any premiums it paid during strike action once the work stoppage...

Life insurance sales are stagnant, but profits are still being made. Courtesy of LIMRA Total U.S. individual life insurance new annualized premium growth was flat in the second quarter and the first half of 2019, compared with prior year results, according to the LIMRA U.S. Retail Individual Life Insurance Sales Survey. In the second quarter, the number of policies sold decreased 5%, compared with second quarter 2018. Year-to-date, policy count dropped 4%. Universal life (UL) new annualized premium fell 1% in the second quarter. As a result, UL premium was flat in the first half of the year, compared to prior year. Total UL market share for the second quarter was 36%. “While fixed UL products continued to dampen overall UL premium growth, indexed products, which are more immune to the pressures of low interest rates and combine market growth potential with market loss protection, continued to shine,” said Ashley Durham, associate research director, LIMRA Insurance Research. Indexed UL (IUL) recorded its eleventh consecutive quarter of new premium growth with half of IUL manufacturers reporting growth, including 6 of the top 10 top writers. IUL new premium rose 4% in the second quarter and 7% year-to-date. IUL sales represented 67%...

Staff | August 29, 2019 Among institutional investors that are diving into alternative assets, those investing in private equity are the most satisfied, according to a new survey by Preqin Ltd. The vast majority (93 per cent) of survey respondents said their private equity funds’ performance has either met or exceeded expectations in the last 12 months. Investors are also satisfied with private debt, real estate and infrastructure funds, but some other asset classes were cause of consternation. Almost half (46 per cent) of hedge fund investors said those assets didn’t meet expectations, while 37 per cent said the same of natural resources. Read: Head to head: Do hedge funds make sense for Canadian pension plans? However, hedge funds should still see plenty of inflows going further, according to the survey. Although the asset class disappointed investors in 2018 after double-digit returns in 2017, many investors said they believe equity markets are peaking today so they’ll likely look to hedge funds as a potential source for outperformance in the future. On the other hand, real estate had the gloomiest outlook heading into the second half of the year. Only 11 per cent of survey respondents said they believe the asset class will outperform over the coming...

Alethea Spiridon | August 29, 2019 Canada’s largest publicly traded companies could have eliminated their defined benefit pension deficits five times over with the value of their shareholder payouts in 2017 alone, according to a new report by the Canadian Centre for Policy Alternatives. “Despite the decline in DB plans, a third of Canada’s biggest companies actually maintain a DB plan of some kind,” says David Macdonald, a senior economist at the CCPA. “However, over the period of the study, from 2011 to 2017, we’ve seen a fairly large increase in the amount that these companies pay out to shareholders. But at the same time, we’ve seen them maintain pension deficits that they could readily pay off.” Read: Sears Canada pensioners going after 2013 dividend paid to shareholders In 2011, S&P/TSX companies with DB pensions paid twice as much to shareholders as it would have cost to eliminate their pension deficits. By 2017, payouts to shareholders reached $66 billion, more than five times the value of these companies’ pension deficits, at $12 billion.  “So they pay off, in 2017, five times more to shareholders, and then the total pension deficit, which isn’t an ongoing deficit . . . will be in essence a one-time payment,” says Macdonald. ...

Staff | August 29, 2019 Employers should be focusing on the basics of office design to improve employee productivity, according to a new survey. The survey, by Future Workplace and View Inc., polled about 1,600 North American workers. It found air quality, natural light, temperature and noise level were key factors to comfort and productivity at work, with nearly half of respondents saying they wanted their companies to improve on those factors. “In many instances, employees would rather see employers improve the workplace environment [than] improve organizational policies or perks,” the survey said. Read: Is an open concept working environment ideal for employees? When asked to rank their top three workplace wellness perks, 58 per cent of respondents cited air quality, followed by comfortable light (50 per cent), water quality (41 per cent), comfortable temperature (34 per cent), office acoustics (30 per cent) and a connection to nature (30 per cent). Fewer survey respondents ranked healthy food choices (26 per cent), fitness facilities (16 per cent) and technology-based health tools (13 per cent). Almost half of respondents said poor air quality at their office makes them sleepy throughout the workday, and just one in four said the air quality was optimal for them to do...

Dee-Ann Durbin, The Associated Press | August 29, 2019 McDonald’s is introducing a new training program for its U.S. employees after dozens of workers complained about sexual harassment. The Chicago-based company said Wednesday that its franchisees have committed to provide the training — a combination of online work and in-person discussions — to 850,000 employees. Beginning in October, it will educate workers about harassment and bullying, tell them how to report it, teach them ways to diffuse situations with customers or co-workers and discuss what bystanders can do. “Together with our franchisees, we have a responsibility to take action on this issue and are committed to promoting positive change,” said Chris Kempczinski, McDonald’s U.S. president, in a statement. Read: Government releases results of workplace harassment, violence consultation McDonald’s said it could eventually offer the training globally, but will begin with its 14,000 U.S. restaurants. The company didn’t say how much the training will cost or how much time it will take workers to complete it. Workers will be paid during the training. McDonald’s isn’t requiring franchisees — who are independent owners — to provide the training. But the National Franchisee Leadership Alliance, which represents franchisees, helped develop the training and is calling on all owners...

Fort Worth Star-Telegram (TX) Aug. 28–FORT WORTH — Until now, the story of an Arlington couple murdered in 2012 has been tinged with salacious details about witchcraft and voodoo. But on Tuesday, none of that mysticism was on display. Instead, in a Fort Worth courtroom, jurors heard brutal details about how Long Nguyen, 72, and his wife Huong Ly, 63, met their deaths. Willie Guillory, now 24, testified that he was a Houston-area teenager in 2012 when he traveled to Arlington with his uncle Bobby Guillory, 56 — and bludgeoned Nguyen and Ly with a baseball bat he had made in high school wood shop class. The younger Guillory, who faces a capital murder charge in the case but has agreed to cooperate with authorities for a reduced charge, was a key witness in the trial of Dephne Wright, 47, who also lives in Houston and is accused of paying the uncle-nephew team to kill the Arlington couple to satisfy a debt. Wright has been described in previous news reports about the case as a self-proclaimed witch, but on Tuesday her lawyer Wes Ball said that characterization comes from a misunderstanding about her occupation as a spiritual adviser who caters...

Morneau Shepell announced Aug. 27 that it has purchased several buy-in annuity contracts for the Stelco Inc. Retirement Plan for Salaried Employees at Hamilton Works. The aim of the deal, valued at $885 million, is to secure the benefit entitlements of all Plan participants, stated Morneau Shepell, the Plan Administrator. “We are very pleased with this outcome since our appointment as Administrator of the Stelco Inc. Retirement Plan for Salaried Employees at Hamilton Works by the Financial Services Regulatory Authority of Ontario,” said Al Kiel, senior vice president, retirement solutions, Morneau Shepell. “Our risk management approach in dealing with complex post restructuring appointments is a testament of our extensive experience in this space, and a reflection of our positive collaboration with all stakeholders for the Plan.” Four insurers involved The deal involved four Canadian insurers: Canada Life, Sun Life, BMO Life and Co-operators Life. The transaction covers 2,725 retirees and beneficiaries, deferred vested and active/suspended participants. Morneau Shepell said the appointment of the insurers followed a thorough selection and due diligence process. Morneau Shepell’s Pension Risk Transfer and Regulatory teams worked closely together on these transactions. Pension risk transfer market “Our team reengineered the structure of our pension risk transfer...

Brooke Shields succeeds racecar driver Danica Patrick as the face of Life Insurance Awareness Month. Life Happens was so pleased with racecar driver and personality Danica Patrick as the face of its annual 2017 life insurance campaign, they signed her up for a second year. Keeping that momentum going into 2019 was going to be difficult – but then Brooke Shields expressed interest in fronting this year’s campaign. And the 54-year-old actress and model checked off even more boxes, said Faisa Stafford, president and chief financial officer of Life Happens. “The great thing about Brooke is that she has kids, so having that mentality of wanting to protect her kid’s future and her legacy,” Stafford said. “Also, just her story of how she found out about life insurance and how she purchased it even before getting married or having kids.” As part of the partnership, Shields will serve as the national spokesperson for Life Insurance Awareness Month, the annual awareness campaign coordinated by Life Happens and supported by the nation’s leading insurance companies and industry groups each September. A model and actress, Shields has been in the public eye since playing a child prostitute in the controversial film “Pretty Baby”...

Staff | August 28, 2019 In its capacity as plan administrator, Morneau Shepell Ltd. purchased several buy-in annuity contracts for the Stelco Inc. pension plan in July. The goals of the transaction are to preserve the favourable financial position of the plan, ensure fair treatment of all members and maximize benefit protection, said Morneau Shepell in a press release. The Canada Life Assurance Co., Sun Life Assurance Co. of Canada, BMO Life Assurance Co. and the Co-operators Life Insurance Co. were all involved in the structure of the $885 million deal. Read: Morneau Shepell appointed administrator of Stelco’s five DB pension plans In total, the transaction covers 2,725 retirees and beneficiaries, deferred vested and active or suspended plan members. “Our team re-engineered the structure of our pension risk transfer process and worked closely with insurers/reinsurers, which was a key differentiator for this transaction,” said Benoît Labrosse, vice-president of asset and risk management at Morneau Shepell. “In the past few years, the Canadian pension risk transfer market has evolved to make larger and more complex transactions possible for the benefits of our clients.” Read: Buy-ins and boomerangs: A look at the trends in Canada’s annuity market  Read the full article at BenefitsCanada.com