Insurable Interest Canadian Insurance Blog

The Mutual Fund Dealers Association of Canada (MFDA) has permanently banned a financial advisor from conducting securities-related business in any capacity and fined him after the advisor allegedly submitted a line of credit application containing false information. The MFDA said Roman Vendrov will no longer be able to conduct securities business with any MFDA member, fined him $115,000 and costs of $7,500. MFDA says Vendrov fabricated documents In its notice of hearing, the MFDA alleged Vendrov fabricated supporting documents when he submitted the line of credit application. By including the false information, he was “failing to observe high standards of ethics and conduct in the transaction of business or engaging in conduct which is unbecoming and detrimental to the public interest.” Vendrov was registered in Ontario as a mutual fund salesperson with Shah Financial Planning Inc., a member of the MFDA, from March 2015 to November 2016. He was let go by Shah in November 2016.   Read the original article at insurance-journal.ca

In the business of insurance, channel distributions are high on the list of the most critical insurance functions. Channels are the delivery mechanisms, which consolidate functions, requirements, communications, and delivery correctly and completely completed. These are critical factors, some of which are expanding.  Up to recently, the majority of these decisions rest on longstanding methods and systems within longstanding insurance organizations. However, there are new challenges that offer new opportunities and new risks. Two channels have been enough, until … Up to 2014, or so, Property Casualty insurance channels rested in one of two directions: Direct versus Brokers.  In 3 December 2018, Alicja Grzadkowska published a discussion in Insurance Business Canada. For the last 30-plus years, there were two, distinct channels in the P&C insurance community: Direct versus Broker.  The former is a single operation, which manages a single insurance channel, used by in-house agents.  The latter deals with multiple insurers and broker distributors. Until recently, each channel has managed its own benefits and challenges. But this is changing. Grzadkowska notes: As the war of the direct channel versus the broker channel wages on, particularly in personal lines, some insurers are making a strong stand on one side of the...

Equitable Bank believes it is perfectly positioned to make a significant impact in the Cash Surrender Value (CSV) loan market. Michael Pilz, business development manager, believes the loan, a way of creating a “living benefit” by accessing capital a client has built up in a life insurance policy, is a compelling opportunity for many people. Crucially, he believes the Big Six banks’ traditional approach to facilitating this type of credit leads to a high minimum approval amount, cutting out a large segment of the Canadian population. For example, Equitable Bank’s current CSV loan offering has a low approval amount of $15,000 while the institutions are focused on high-net-worth individuals with a minimum approval amount around $1 million. Pilz said: “We have entered this business because, in most instances, securing a cash surrender value line of credit, in many instance, does in fact make the most sense, although to make a broad blanket statement is disingenuous. We entered this space because we saw a big opportunity. If you look at the traditional Big Six, they operate more often than not in the very high-end segment of the market in terms of setting up loans against life insurance policies. “We can service...

A federal court in the US has ruled against a widow who tried to collect a payout from her deceased husband’s US$100,000 accidental death insurance policy, saying that the man died too late. As reported in InsuranceNewsNet, the policy was administered by Transamerica Premier Life Insurance Company, which inherited it from the original issuer, Peoples Benefit Life Insurance, through a merger and a corporate name change. Under the terms of the policy, the death “must occur within 90 days of the accident” in order for beneficiaries to collect a payout. The insured, Charles Thomas Blosch, died on August 12 last year — 94 days after he fell, struck his head on a sidewalk, and went comatose. He was placed on life support, but a subdural hematoma coupled with medical complications from the fall took their toll in the end. Darlene Blosch, the widow, sued Transamerica in hopes of forcing a payout. Her lawyer, Albert Selkin, questioned the legality of the 90-day provision, pointing out in court documents that it was not included with the rest of the policy’s exceptions or exclusions provisions. He insisted that the clause offended “the public policy of Virginia” as it required the policy holder to...

The notion of a national, all-public pharmacare program in Canada continues to enjoy popular support. But when it comes to prescription-drug coverage, one province shows that there may be some merit to be had from not excluding private insurers. In a new report, Fraser Institute Senior Fellow Yanick Labrie laid out the case that Quebec’s general drug insurance program, RGAM, has provided generally positive results in improving access to prescription drugs when compared to those of other provinces. Under the public plan, social assistance recipients and people who are at least 65 years old are provided with a minimum level of coverage for the cost of pharmaceutical services and medications. Individuals who are not eligible for a private group insurance plan with an employer are also provided for in the public plan. Those who qualify for coverage under an eligible private group insurance plan are mandated to join. “Around 4.7 million people belong to a private group insurance plan, or about 57 percent of Quebec’s population,” Labrie wrote. While the coverage of private group plans must at least equal that of the public plan, they can be expanded — and most are — to cover drugs that it doesn’t include....

Chattanooga Times Free Press (TN) Jul. 30–Unum Group reported a 4.6% gain in its after-tax adjusted operating earnings during the second quarter as premium income grew another 6.8% in Unum’s core business, helping the company to beat analysts’ forecasts for the period by a penny per share. The Chattanooga-based insurer said today its net income in the three months ended June 30 totaled $281.2 million, or $1.33 per share, compared to $285.5 million, or $1.29 per share, a year earlier. Excluding after-tax realized investment gains and losses, Unum’s adjusted operating income this spring was $286.9 million, $1.36 per share. Analysts who follow Unum had predicted the company would have adjusted earnings of $1.35 per share in the three-month period. Buoyed by the continued upturn in profits, Unum also said today it repurchased another 2.9 million shares for about $100 million in the second quarter under its stock buyback program. “We are very pleased with our financial results for the second quarter and the strong premium growth we are generating in our core business segments,” Richard P. McKenney, president and chief executive officer, said in a statement today. “We are continuing to make strong progress as we execute on our strategic...

Prices in Alberta see most severe increases as insurance companies grapple with rising claims costs Toronto, ON (July 30, 2019) – LowestRates.ca, an online comparison site for personal finance products like insurance, mortgages, loans and credit cards, has released its Q2 2019 Auto Insurance Price Index, which uses proprietary data to track the average cost of car insurance in Canada each quarter. The report found rates are up across Ontario, Alberta, and Atlantic Canada in the second quarter of 2019, with drivers in Alberta seeing the steepest increase in the country—rates there rose 16.20% in the past year. In Atlantic Canada, rates have seen the least severe increase, up 13.29%, while in Ontario the average cost of auto insurance is up 13.85%. “Insurance companies across Canada are fighting high loss ratios,” explains Justin Thouin, CEO and Co-Founder of LowestRates.ca. “We have been hearing from many of our partners that in some areas, they’re paying out more money in claims than they are taking in from premiums. This has led some companies to stop offering new insurance policies, which has led to a drop in competition and higher prices for Canadians.” The Financial Services Commission of Ontario (FSCO), which regulates insurance...

The Financial and Consumer Services Commission of New Brunswick is warning Canadians of a growing telephone scam where fraudsters tell people that their social insurance numbers (SIN) have been blocked, compromised or suspended. Fraudsters may add that this is because a consumer’s SIN has been linked to fraudulent or criminal activity. They say they are calling from government agencies, including Service Canada, the RCMP and various court houses, and can display the phone numbers of these agencies on caller ID. Consumers warned of never giving away personal ID to strangers Consumers who receive this call are asked to provide their SIN and other personal information, such as their date of birth, name and address. The commission is warning people that if they provide any kind of personal information to fraudsters they risk identity fraud. The commission also cautions that no government agency contacts people to tell them that their SIN is blocked. On top of that, people should never provide personal information over the phone to an unknown caller. If they do, the commission suggests people contact Equifax and Trans Union to place fraud alerts on their accounts. If you think you know someone who has been a victim of fraud, the commission suggests they contact the Canadian Anti-Fraud Centre at...

FALLS CHURCH – The National Association of Insurance and Financial Advisors (NAIFA) announced Guy E. Baker, Ph.D., MSFS, MBA, CLU, ChFC, CFP, RHU, managing director of BTA Advisory Group in Irvine, Calif., is the recipient of the 78th annual John Newton Russell Memorial Award. The award is the highest honor accorded by the insurance industry to a living individual who has rendered outstanding services to the institution of life insurance. Baker will receive the award Sept. 14, 2019, at NAIFA’s Performance + Purpose conference in Orlando. “It is my pleasure on behalf of the selection committee to honor Guy Baker with this year’s John Newton Russell Memorial Award,” said Jules Gaudreau, chair of the 2019 award committee. “The committee considered many deserving candidates, but ultimately Guy’s professional accomplishments stood out. His decades of success and his willingness to share his insights and expertise through his speaking engagements, writing, teaching, volunteer service, leadership and mentoring activities exemplify the dedication to the life insurance and financial services industry that the John Newton Russell Award was created to recognize.” Baker has more than 50 years of experience as a life insurance and wealth consultant and as a frequent and highly regarded writer and...

Star Tribune (Minneapolis, MN) A Minnesota man is heading to prison after faking his own death to collect life insurance. A man from Moldova was sentenced Monday to more than three years in federal prison for faking his death to collect a $2 million life insurance payment. Igor Vorotinov, 55, pleaded guilty in May and will serve 41 months. The case stemmed from a life insurance policy he took out on himself and designated his wife, Irina, as the primary beneficiary. According to Vorotinov’s guilty plea and documents filed in court, the Moldovan police discovered a man’s body by the side of a road near the village of Cojusna in 2011. Authorities mistakenly determined it was Vorotinov and that he had died of a heart attack. After that, Vorotinov starting using the name “Nikoly Patoka” and lived in Transnistria, a small Russian-controlled region of Moldova, from approximately 2012 until approximately November 2018. In 2001, his wife knowingly submitted a false death benefits claim, documents said. Mutual of Omaha Insurance Company sent a $2 million check to her home in Maple Grove. She involved a third party to open up an account in her son’s name to deposit the check. The...