Insurable Interest Canadian Insurance Blog

The Canadian Press  | August 21, 2019 The California State Teachers’ Retirement System says it wants to join a lawsuit seeking to change Facebook Inc.’s corporate governance practices. The pension fund said Tuesday it will ask a judge to be added to a pending lawsuit against Facebook’s leadership, which includes its chief executive officer, Mark Zuckerberg. Read: NZ pension funds pushing for change at Facebook, Google and Twitter The Fireman’s Retirement System of St. Louis and retail investor Karen Sbriglio filed the lawsuit in August 2018 following the revelation that consulting firm Cambridge Analytica Ltd. had taken people’s personal information from the social media platform without their knowledge and used it for political purposes. Aeisha Mastagni, the pension fund’s manager of sustainable investment and stewardship strategies, said it believes weak corporate governance practices contributed to the scandal and damaged Facebook’s stock price. Read the full article at BenefitsCanada.com

Martha Porado  | August 21, 2019 The Ontario Teachers’ Pension Plan increased its net assets by $10.3 billion in the first half of the year, reaching a total of $201.4 billion as of June 30, 2019, and achieving a return of 6.3 per cent. “We’re pleased to report that our results at mid-year are strong,” said Ron Mock, president and chief executive officer, during a conference call on Wednesday. Most asset classes grew, with real estate the one exception. It shrank from 15 per cent to 14 per cent of the total portfolio and ticked down in dollar terms from $27.44 billion to less than $27.23 billion. Read: Ontario Teachers’ posts 2.5% return for 2018 amid volatile investment environment Fixed income saw the biggest shift, moving from 31 per cent to 36 per cent of the total portfolio, rising from $58.24 billion in assets to just under $71.94 billion. Ziad Hindo, chief investment officer, noted on the call that the shift to more fixed income was part of an initiative to balance the portfolio’s risk to fortify further sustainability. The asset class has posted the strongest returns of any asset class for the year so far, he added. “We’re really focused on...

Staff | August 21, 2019 The federal Conservative Party is promising to make employment insurance maternity and parental benefits tax-free. The party is proposing a 15 per cent tax credit for any income earned under the two EI programs. “Parents should be able to put their energy toward those critical first few months, and not have to worry so much about their bank accounts or their bottom line,” said Conservative leader Andrew Scheer at a Toronto childcare centre on Tuesday. Read: Employers urged to prepare for incoming EI parental sharing benefit Scheer said women earning $50,000 per year would save around $4,000 under the party’s proposal. As well, the Conservatives said its government would also provide an equivalent amount tax credit for Quebec residents who receive their maternity and parental benefits under the Quebec Parental Insurance Plan. New mothers currently receive 55 per cent of their earnings, up to $562 per week for a maximum of 15 weeks. Canadians who take the standard parental benefits receive 55 per cent of their salary up to $562 for up to 40 weeks. If they choose to take the extended leave, which was introduced in 2018, they receive a 33 per cent income replacement for up to $337 per week, for...

Staff | August 21, 2019 The federal government is reforming the tribunal that handles appeals related to employment insurance, Canadian Pension Plan and old-age security payments. Currently, Canadians who disagree with decisions by Employment and Social Development Canada or the Canada Employment Insurance Commission relating to these payments, as well as CPP disability benefits, can appeal to the tribunal’s general division. If the appeal is unsuccessful, they can go through a second level with the tribunal’s appeal division, but can’t introduce any new evidence. Read: The role of employers in ensuring retirees understand income tax complexities Among its changes, the government will be hiring trained case navigators who will help Canadians through the appeal process. The government is also allowing people who are making appeals related to OAS, CPP and CPP disability benefits to introduce new evidence at the second-level appeals that wasn’t present in the first level. “This approach, commonly called de novo, better responds to the nature of disability claims by recognizing that new medical evidence can emerge over time,” the government said in a news release. Appellants for OAS, CPP and CPP disability benefits will also now have up to two years to gather information for a first-level appeal, up from just one...

Life insurance remains the best, most tax efficient way to build wealth for clients’ next generation, according to an industry insider. While pressing home its basic concept – life insurance 101, if you will – Chris Karram, founder and chief strategy officer at SafeBridge Financial Group , maintained that everybody can justify owning a policy, however big or small. Buying into a whole-term product, which is in place for your lifetime, means that, providing you have paid your premiums, your insurance will be there no matter when you pass. Karram said: “You are ensuring there is a massive lump sum of capital deposited into your family or business account on the death of a significant person, which can do a majority of things like cover tax liabilities or eliminate, potentially, corporate tax in the sense of dividend tax to get out of your corporation. “It really can set up your next generation in the most tax-efficient way possible – there is no better way of doing so. It can help your family build wealth for generations to come. No matter how big or small that policy is, if that money can be left for your family, your children, your spouse,...

Breathe Life, a provider of digital solutions for the insurance industry, has introduced the Advisor Experience portion of its end-to-end platform to modernize the way personal insurance is bought and sold. The platform provides a unified experience and data model for insurance companies to empower agents from the back-end Advisor Experience to the front-end Consumer Experience. The Breathe Life Advisor Experience is designed for insurance carriers who want to provide their financial advisors and clients with a great digital and omnichannel experience. La Capitale Insurance and Financial Services is the first carrier to implement the solution. Martin Delage, executive vice-president of individual insurance and financial services for La Capitale, said: “We believe that Breathe Life’s dynamism and agility will enable La Capitale to fulfil the promise it has made to its partners, namely that it is fast and easy to do business with La Capitale.” Financial advisors continue to play an integral role in distribution and client satisfaction. According to the research firm, LIMRA, having “a personal relationship with an agent or advisor is highly valued and not going away,” but “the nature of that relationship is changing, incorporating a digital element.” The report also noted that “technology is vital...

While annuities are considered long-term, illiquid investments, it is important to recognize how different types of annuities can differ in terms of liquidity. In a piece published by ThinkAdvisor, Scott Stolz, senior vice president for Private Client Group Investment Products at Raymond James Financial, noted that statements from the U.K.’s Financial Industry Regulatory Authority (FINRA) and the U.S. Securities and Exchange Commission (SEC) indicate that both agencies consider annuities as illiquid. Surrender charges for early exits from commission-based annuities, tax consequences of early liquidation of nonqualified annuities, and optional living and death benefits that are too valuable to give up also support a characterization of illiquidity. “Even with these instances of illiquidity related to annuities, viewing all annuities as automatically illiquid is simply an invalid assumption,” Stolz said. Citing nonqualified annuities as an example, he said that policy owners are able to receive the entire value of the annuity at any time once they’ve gone beyond the surrender charge period. In his view, that made such annuities just as liquid as any other investment asset from which taxable gains would arise upon liquidation. Similarly, he said clients with qualified annuities are taxed the same as other assets in a qualified...

The Patented Medicine Prices Review Board (PMPRB) has released its latest Generics360 report, which indicates that significant policy-driven reductions in generic drug prices have resulted in significant savings for Canadians. The report was based on a pricing analysis of 584 leading generic medicines in Canada, specifically oral solid prescription medicines that have been on the market for at least one year with estimated annual Canadian retail sales of at least $1 million in 2018.   It found that prices of select oral generic drugs in Canada declined by 59% from 2007 to 2018 — a greater reduction than what comparable countries like the U.S., the U.K., France, and Germany saw over the same period. As of 2017, generic prices in Canada were the 11th highest in the OECD, in line with Italy, the U.S., and France, and slightly above Germany. The reduction in prices over time has helped contain total spending on generics to $5.4 billion in 2018, the same amount as in 2010, despite increased use of generics over the intervening period. The report also found that generic spending as a share of the Canadian pharmaceutical retail market decreased from 32% in 2010 to 25% in 2018. That puts...

A man with generalized anxiety disorder, whose life insurance application was denied, is raising concerns that his case reflects a practice that could dissuade others from seeking help from mental illness. The Ontario resident, Robert Pugh, and his wife decided to each purchase a term-based life insurance policy this past spring, reported CBC News. With a toddler child and another baby on the way, the two wanted to ensure that should one of them pass away, the other would not struggle with mortgage payments. Pugh told CBC News that they each applied for a Sun Life insurance plan with a 10-year term. The process for both involved a paramedical exam — an interview to look at one’s medical history — and a phone interview. Pugh disclosed that since he was in his late 20s, he has been receiving treatment for his anxiety disorder; he is now taking the medication Pristiq as well as CBD oil under the supervision of his doctor. While Pugh’s wife was approved, Sun Life denied his application. A letter he received in July explained that he was rejected “based on [Sun Life’s] assessment that includes information about your personal health.” He said he called Sun Life...

Montreal-based Holt Fintech Accelerator launched its second cohort this week, bringing together eight new companies from five different countries, to participate in its 12-week program. “We’re trying to support financial technologies that we believe are needed in the Canadian market,” says Holt Accelerator founder and managing partner, Brendan Holt Dunn. “This creates direct benefits for Canadian consumers, financial institutions and service providers, while also enabling Canada to be more competitive globally.” The accelerator’s eight new companies were chosen from nearly 600 applications from over 70 different countries. Participating companies receive training sessions, immersion in the fintech environment and hands-on help from committed financial institutions and venture capital firms. “This brings Holt closer to its goals of supporting innovation in the global financial services sector and continuing to help make Montreal, Quebec and Canada a top destination for fintech talent an innovation,” the company said in a statement released this week. Read the original article at insurance-journal.ca