A former life agent who took advantage of recruits to generate insurance business was fined $60,000 by the Financial Services Regulatory Authority of Ontario (FSRA), the regulator said on Thursday.

Chris Oppong, licensed from September 2020 to September 2022 and contracted with Ivari through managing general agency Greatway Financial Inc., trained recruits to join his sales team, in some cases charging them a fee or telling them they had to purchase an insurance policy to attend training, a regulatory notice dated September 2023 said.

In some cases, he reimbursed recruits for the first month’s premium, and recruits then let the policies lapse, the notice said.

Oppong signed other recruits up for policies without their knowledge or consent.

He admitted to reimbursing premiums to 22 policyholders — some of whom were his recruits — for 29 policies, the notice said.

“All of these activities were intended to generate insurance business and compensation for Oppong and increase his sales team,” it said.

Oppong received $39,600 in compensation for the 29 policies issued. While Greatway started a civil action to recover this amount plus other payments, the notice said, it hasn’t yet recovered any funds.

Oppong didn’t request a hearing or contest FSRA’s proposal of penalties.

The $60,000 fine included $40,000 for reimbursing premiums, $10,000 for using coercion and undue influence to secure insurance business, and $10,000 for fraudulently procuring payments of premiums.

Last October, FSRA said it took enforcement action against dozens of life agents contracted with Greatway as well as World Financial Group Insurance Agency of Canada Inc. and Experior Financial Inc. following a review the regulator conducted from May 2022 to April 2023. The review specifically looked at firms that tied compensation to recruitment.

In the review, of 50 Greatway life agents selected for examination, 19 were escalated to discipline officers; of these, 12 (63%) were issued notices to impose a monetary penalty and four (21%) were still under review as of May 31, 2023.

When FSRA shared its findings last fall, Greatway said it had implemented measures such as improved training and heightened agent supervision.

To strengthen oversight in the life insurance sector, the regulator has said one of its initiatives is developing a new proposed rule for MGAs.

Michelle Schriver

News

Michelle is Advisor.ca’s continuing education editor. She has worked with the team since 2015 and been recognized by the National Magazine Awards and SABEW for her reporting. Email her at michelle@newcom.ca.

The outlook for Canadian life insurers remains stable for 2024 with signs of modestly improving earnings and stable capital levels despite an uncertain economic outlook, according to commentary released by DBRS Morningstar on Monday.

Interest rates are likely to remain higher than pre-2022 levels, which will increase earnings through higher investment yields from fixed assets and potentially lower insurance liabilities. Lifecos can also generate more premium revenue as higher interest rates make annuity and some insurance products more appealing to consumers, the report said.

Manulife Financial Corp. re-entered the annuities market in Canada last month after exiting in 2018, and Desjardins Group last week began offering the first advanced life deferred annuities in Canada.

“The outlook for Canadian lifecos continues to be stable, with insurers likely to benefit from the higher interest rate environment in the medium to long term,” Komal Rizvi, DBRS Morningstar’s vice-president of insurance, said in a release.

Although the outlook is mostly positive, there may be an increase in impairments in insurers’ invested asset portfolios, particularly in private credit, mortgage loan, and real estate asset classes. However, any increased risk is manageable as the Big Four lifecos’ direct real estate exposure remains low at 4% of total invested assets and average mortgage loan-to-value ratios remain low, according to DBRS Morningstar.

Canadian life insurers’ regulatory capital levels generally increased when IFRS 17 was implemented in January 2023, a major accounting change that affected how financial results were reported. In addition, life insurance capital adequacy test (LICAT) ratios were all substantially above the minimum requirement, which provides a capital buffer to protect against adverse developments.

Insurers could deploy the excess capital through dividends or by offering new products. For example, the high interest rate has led to the popularity of accumulation-type savings products with a guaranteed investment component, individual fixed annuities and pension risk transfer. Companies could also invest in digitizing their business processes and leveraging technology to improve efficiency.

“Diversified operations, good risk management practices and high capital levels should help lifecos successfully navigate an uncertain macroeconomic environment,” Rizvi said.

Given already high credit ratings, it’s unlikely that there will be positive rating changes. Big Four insurers — the Canada Life Assurance Company, Sun Life Assurance Company of Canada, the Manufacturers Life Insurance Company and Industrial Alliance and Financial Services Inc. — remain in the AA rating range.

Jonathan Got

Jonathan Got is a reporter with Advisor.ca and its sister publication, Investment Executive. Reach him at jonathan@newcom.ca.

Manulife Financial Corp. has re-entered the annuities market in Canada after exiting in 2018 amid low interest rates and client demand.

Manulife said Monday that it’s reintroducing annuities to meet demand for stable income as more Canadians enter retirement with high living costs. The new products will provide guaranteed income for life or for a specified period, with annuity payments determined at the time of purchase through a lump-sum payment.

“There’s a great demand for fixed income solutions,” said Paul Savage, head of Manulife individual insurance for Canada, in an interview. “We’ve seen that in GICs and annuities, and based on that we think it’s the right time to re-enter the annuity market.”

Concerns about the cost of living and volatile markets, and fewer people with defined-benefit pensions, have all contributed to demand for guaranteed income products, Savage said.

Annuities sales have improved over the past year as higher rates made payouts more attractive to investors. The Bank of Canada raised its overnight interest rate from 0.25% in March 2022 to 5.0% this past July, where it’s remained since.

When Manulife exited the annuities market in June 2018, the Bank of Canada’s overnight rate was 1.25%. The insurer had become one of the largest providers of annuities in Canada following its acquisition of Montreal-based Standard Life Assurance Co. of Canada in 2015.

Savage cited low rates as well as low demand for the products contributing to the decision to discontinue annuities at the time.

Lea Koiv, a tax, pension and retirement planning specialist in Toronto, also said demand for annuities has shot up with interest rates.

“A lot of people in the past hesitated to buy annuities because of the low bond yields,” she said. “But now is an excellent time, especially with a lot of people saying, ‘How long will bond yields stay as high?’”

Many investors expect rate cuts in the first half of next year.

Manulife is offering single life annuities, joint and survivor annuities, and term annuities that provide income for a specific period.

The new products offer a cash refund or principal protection guarantee. This means that if the annuitant dies prematurely, a beneficiary will receive a lump-sum payment equal to the difference between the principal investment and the total payments received.

There’s also an annuity settlement option, Savage said, where the lump-sum payment is transferred into a new life annuity contract and the beneficiary continues to receive payments based on the pricing of an annuity at the time.

BMO Insurance makes GIF changes

BMO Insurance is adding four products to its guaranteed investment funds (GIF) lineup, making popular ETFs available on its segregated fund platform.

The new investment options include the BMO Aggregate Bond Index ETF GIF, the BMO Canadian Income & Growth GIF, the BMO Global Income & Growth GIF and the BMO Global Innovators GIF.

The firm also said it’s reducing fees on more than 20 funds, and introducing a lower-cost fee-based option for its high-net-worth clients.

Mark Burgess

News

Mark has been the managing editor of Advisor.ca since 2017. He has been covering business and politics for more than a decade. Email him at markb@newcom.ca.

Proposed changes to the alternative minimum tax (AMT) will increase the exposure of certain high-income taxpayers, with planning implications for life insurance.

In a nutshell, all individuals (including most trusts) are currently subject to the federal AMT when their regular Part I tax (calculated under the general rules) is less than the amount of tax calculated under the AMT rules. Draft legislation released in August 2023, expected to take effect in 2024, substantially changes these rules. 

The AMT rate will increase from 15% to 20.5% of an individual’s adjusted taxable income (ATI). ATI is determined by adjusting the individual’s Part I taxable income to account for various types of income or deductions receiving preferential tax treatment (e.g., capital gains, capital gains eligible for the lifetime capital gains exemption, dividends, employee stock options and tax shelter deductions).

For most individuals, ATI is reduced by a basic income exemption that will increase to about $173,000 from the current $40,000. This amount is then reduced by certain non-refundable tax credits available to individuals other than trusts. AMT paid by an individual for a particular year can be carried forward for seven years to offset regular Part I tax (assuming the Part I tax is greater than the AMT payable in that year).

The increased AMT income exemption will result in most individuals not being caught in the AMT net. But for certain high-income taxpayers and trusts, the higher AMT tax rate, combined with increased inclusion rates for capital gains and further reductions in allowable deductions and credits (including the charitable tax credit and financing expenses), will result in greater exposure to AMT, and an increased likelihood that the tax will not be recovered.

Implications for life insurance

The impact of the AMT on life insurance planning is generally a good news story. First of all, the growth in the cash value of an exempt life insurance policy is not included in income under the Part I tax or the AMT. And while the disposition of an exempt insurance policy can result in taxable income, it is taxed like interest income and therefore should not create additional AMT tax liability. Thus, permanent life insurance acquired for estate planning purposes should not be adversely impacted by the revised AMT.

While corporations are not subject to AMT, distributions of taxable dividends to shareholders could increase exposure under the new rules. However, not only is the death benefit under a corporate-owned life insurance policy received tax-free, but also a significant amount of this benefit can be credited to the corporation’s capital dividend account. Capital dividends payable to a shareholder are tax-free under the regular tax system as well as under the existing and revised AMT rules. Thus, the use of corporate-owned insurance for funding estate liabilities, buy-sell funding or key person coverage should not have significant AMT implications. 

As well, certain post-mortem planning strategies involving life insurance, which assist in reducing “double taxes” arising on death, should not be adversely impacted, as the AMT does not apply in the year of death or to the deceased’s graduated rate estate (this is a new exemption from AMT starting in 2024).

Individual taxpayers may also acquire life insurance to fund a large charitable gift on death. This involves the individual donor being the owner and premium payor, with the charity designated as beneficiary of the policy. Under regular tax rules, the value of the charitable donation (the life insurance death benefit) can be used in the deceased’s estate to offset taxes arising on death, or by the deceased’s GRE. As noted, the revised AMT will not apply in the year of the individual’s death or to a GRE, so once again, this type of charitable giving strategy will not be impacted.     

However, another charitable giving strategy involves the donation of an existing life insurance policy. The donor is generally entitled to claim a tax credit equal to the fair market value (FMV) of the policy. In certain cases, the FMV of the policy can be significantly higher than its cash surrender value, making this an attractive option. As with other charitable gifts made while the donor is alive, the value of the charitable tax credit will be reduced by 50% under the new AMT rules. Depending on the individual’s other sources of income, this could result in additional tax under the AMT.  

Finally, it is possible for individuals to use their life insurance policy (or a corporate-owned life insurance policy) to secure a loan for investment or business purposes. For regular tax purposes, the borrower may deduct related interest expenses, guarantee fees and the collateral insurance deduction (where the policy is personally owned) and use those deductions to offset other sources of income. Under the revised AMT, such expenses are reduced by 50%, creating potential exposure to AMT. This result can be avoided by structuring the arrangement through a corporation, with the corporation being the policyholder/borrower, as corporations are not subject to AMT.

In summary, the revised AMT rules will require high-income individuals to reconsider certain planning strategies that otherwise have beneficial tax implications for regular tax purposes.  Fortunately, while there are notable exceptions, most common insurance planning strategies will not be impacted by the revised rules.

Kevin Wark

Insurance

Kevin Wark , LLB, CLU, TEP, is managing partner, Integrated Estate Solutions, and tax consultant, Conference for Advanced Life Underwriting. He’s also the author of The Essential Canadian Guide to Estate Planning.

Business-owner clients can be strong candidates for corporate-owned life insurance, but the tax complexities mean insurance advisors must be prepared to collaborate with the clients’ accountants to ensure such policies are suitable.

Corporate-owned life insurance typically involves the corporation as policy owner and beneficiary, and the business owner (or another key person) as the insured.

Having such a policy in place is often a way to ensure the enterprise will have enough funds to continue operating if the owner dies, while also providing tax-free distributions to the business owner’s estate from the corporation’s capital dividend account (CDA). The CDA tracks tax-free surpluses accumulated within the corporation, and can issue tax-free capital dividends to shareholders.

Jeff Bernstein, managing partner with Seligman Insurance in Toronto, said there are even more reasons for a business owner to hold life insurance inside their corporation.

“We also see corporate-owned life insurance used as [a] vehicle for the owner or shareholder to accumulate money inside the corporation that is not needed for current consumption, but that they hope to shelter before eventually making use of the asset,” Bernstein said. “That’s one of the key ways corporate-owned life insurance works, because of the tax attributes.”

Steve Meldrum, a corporate insurance specialist with Swell Private Wealth in Medicine Hat, Alta., said one of the key advantages of holding life insurance via a corporation rather than personally is the savings achieved from the lower corporate tax rate.

Since insurance premiums are generally not tax-deductible, they’re paid with after-tax dollars. A corporation will need to earn much less money to generate the same amount of after-tax dollars as a wealthy business owner paying tax at the highest personal marginal rate.

In addition, Meldrum said corporate-held life insurance may appeal to business owners looking to put excess funds to use in a tax-advantaged manner, especially if they’ve already maxed out their RRSPs and TFSAs. Income from investments in certain life insurance policies is exempt from the federal $50,000 passive-income limit that could reduce the company’s access to the small-business deduction.

“With an eligible life insurance policy, all that growth happens inside. You could have millions of dollars and it wouldn’t impact that small-business tax rate calculation,” Meldrum said.

But it’s not all good news on the corporate side of the life insurance ledger. Since a corporate-owned life insurance policy is not an active business asset, Meldrum said owners should also consider whether the policy will put their business offside of the Income Tax Act’s “small business corporation” test, which determines an individual’s ability to claim the lifetime capital gains exemption on a share sale. To pass the test, “all or substantially all” of the corporation’s assets must be used “principally in an active business.”

And while family-member beneficiaries of personally held policies are usually entitled to receive the proceeds regardless of any creditor claims, the corporate-owned versions do not receive the same kind of creditor protection, meaning they could be seized to satisfy company debts, said Justin Manning, a life-licensed financial advisor based in Vancouver.

Manning added that older business owners may have less to gain from a corporate-owned policy because of the way the tax-free portion of the payment from the CDA is calculated, which is equal to the full amount of the death benefit minus the adjusted cost basis (ACB) of the policy at the time of death.

“It takes time for the ACB to grind down and make the entire death benefit eligible for the CDA, which can be a disadvantage,” he said. “Another potential downside is the loss of financial flexibility and ongoing payment responsibilities if the company experiences difficulty with cash flow resulting in trouble paying the premiums.”

Entrepreneurs considering a reorganization or exit in the near term should also think carefully before taking out a corporate-owned life insurance policy.

“If someone is buying your business, they may not want to buy the policy for whatever reason. And if you try to take it out of the corporation, there could be tax consequences,” Meldrum said, noting that business owners may opt to place their insurance policies in a holding company, which is less likely to be sold than an operating company.

Once a client has decided to purchase a corporate-owned insurance policy, lines of communication should remain open between their professionals so no planning opportunities are missed, said Jamie Herman, a CPA and partner with Fruitman Kates LLP in Toronto.

After all, the extra planning opportunities bring with them an additional layer of complexity that requires cooperation from the client’s professional team, Manning said.

He said accountants must be involved in all discussions around corporate-owned life insurance, because of their knowledge of the client’s broader financial status and any potentially competing strategies already in place.

“Otherwise, certain information or needs may be missed and it can easily unfold as a biased insurance sale, instead of sound financial planning,” Manning said. “Corporate clients deserve their team of professionals to be unified to increase efficiencies throughout the entire planning process.”

Herman agreed: “There are things that can be done with the cash surrender value (CSV) of a corporate owned policy, but a lot of the time, I find [the CSV is] not recorded anywhere — not even by the person who sold the policy. They should be following up.”

Those things may include using the CSV as loan collateral or withdrawing funds from the cash value account. (The former is not generally considered a taxable disposition, but the latter generally is.)

Meldrum said including a corporate-owned life insurance policy’s CSV on a company’s balance sheet can make the company more attractive to prospective investors.

“Policies can have a stabilizing effect when the business owner wants to expand or is having trouble with other assets,” he said.

Meldrum said his team aims to report to a client’s accountants at least once a year on the status of policies.

“Insurance is something that evolves and builds over time. If you had a really good year, you may have room to put more inside the policy — or maybe not, if things didn’t go as well as you hoped,” he added. “But the accountant should be involved at every stage.”

Michael McKiernan

Michael is a freelance legal affairs reporter who has been covering law and business since 2010.

The Financial Services Regulatory Authority of Ontario (FSRA) has taken enforcement action against 65 life agents contracted with managing general agencies (MGAs) that operate under a tiered-recruitment model. The clampdown, which includes the sale of unsuitable universal life policies, is part of FSRA’s strategy to strengthen oversight of the sector.

On Tuesday the Ontario regulator released two reports detailing its actions and findings after it reviewed dozens of life agents contracted with Greatway Financial Inc., World Financial Group Insurance Agency of Canada Inc. and Experior Financial Inc.

These firms’ models tie compensation to agent recruitment, creating the potential to “focus on recruiting to a greater extent than agent suitability and customer needs analysis,” FSRA said in a report of its review of life agents working with the three MGAs.

At the time of the review — from May 2022 to April 2023 — 12,775 life agents were contracted with the three MGAs, representing 20% of licensed life agents in Ontario, the report said.

Of 130 life agents examined — none of whom were subject to previous regulatory action or otherwise risk-identified — 65 (50%) were cited with a total of 184 contraventions of the Insurance Act, related to insufficient disclosures, incomplete continuing education and misrepresentation to FSRA, among other contraventions.

Of the 65, 21 were subject to monetary penalties, and 39 of the cases were escalated to a regulatory discipline officer, the report said. Of the 39, more than one-third were subject to monetary penalties, and 12 were still under review as of May 31.

Other outcomes were letters of warning or business practices, voluntary surrender of licence and lapsed licensing.

Regarding sales practice–related outcomes, of 458 reviewed client files, 92 life agents (77%) were cited with 1,302 best practice issues, the report said. These included a lack of contemporaneous notes, disclosures, policy illustrations, and needs and risk assessments.

The regulator also found that the majority of life agents’ insurance policy sales in 2020 and 2021 were universal life (UL) — 56% and 57%, respectively.

The second report provided more detail about the distribution and sale of UL insurance at the three MGAs during the latest review period. Of 24 client files reviewed, in the majority of instances a UL policy was sold, FSRA found.

“Notably, 80% of the files did not demonstrate that UL policies sold were aligned with the customers’ needs or circumstances,” the report said.

Last year, FSRA ordered Greatway to retrain its agents after alleging that the MGA trained them to sell overfunded UL policies using an insured retirement plan.

Tuesday’s report said needs analysis was often trivial, flawed or no insurance need was identified. Further, retirement planning advice was incomplete or inaccurate, and policy illustrations were misleading or unrealistic.

Life agents recommended overfunded UL policies without considering a client’s existing high-interest personal debt, and the use of TFSAs and RRSPs were generally not considered as alternatives to the overfunded policies.

“Given that many of these cases involved young people with modest means, no savings and carrying high interest debt, the money being used to overfund UL premiums under the guise of helping them grow their savings may well have otherwise been put to better use through investment in TFSAs or by reducing their personal debt, among others,” the report said.

It stressed that UL is complex and potentially risky, and generally sold as a niche product to most insurers’ customers. For a UL strategy to work, one fundamental factor is “the agent selling the product must be ethical and thoroughly knowledgeable about UL and all its components, and able to customize the product to fit the customer’s overall financial picture, risk tolerance and overall financial plan,” the report said.

Without fundamental factors in place, “the effects can be catastrophic, resulting in policy lapse and a corresponding loss of all premiums paid into the plan, including overfunded amounts.”

In addition to enforcement, FSRA’s plan to address the issues identified in the reports include consumer education, new guidance, and, as previously announced, a proposed rule to enhance the MGA regulatory framework.

In an emailed statement on Tuesday, Greatway’s chief compliance officer Ray Burgher said the firm plays an important role recruiting new agents to Ontario’s middle market.

“In the period leading up to the recent report, we’ve implemented significant measures to ensure compliance and address concerns,” Burgher said. “These measures, including improved training and heightened agent supervision, aim to better serve our clients and align with regulatory expectations.”

Experior, which said it had not had an opportunity to review FSRA’s report prior to publication, stated that it has always followed industry standards and that its agents are properly licensed. It added that the only enforcement resulting in a fine was a CE deficiency for one agent.

According to the FSRA report, of the four Experior life agents escalated to regulatory discipline officers, one received a monetary penalty, one received a letter of warning, one resulted in a surrender of licence with conditions, and one was still under review (as of May 31).

World Financial Group did not immediately respond to a request for comment.

FSRA’s actions follow a report on the same MGAs from September 2022 that identified similar issues.

In an annual report, the regulator also identified best-practice deficiencies among higher-risk life agents. According to the report, the amount of monetary penalties handed down by FSRA’s enforcement unit soared to $224,000 in the latest year from $41,000 the year before. The penalties issued by regulatory discipline officers also rose to $14,500 from $10,000 in the prior year.

Michelle Schriver

News

Michelle is Advisor.ca’s continuing education editor. She has worked with the team since 2015 and been recognized by the National Magazine Awards and SABEW for her reporting. Email her at michelle@newcom.ca.

IA Financial Corp. has signed a deal to buy U.S. insurance company Vericity Inc. for US$170 million in a move to grow its business in the United States.

Vericity includes Fidelity Life, an insurance carrier, and eFinancial, a direct-to-consumer online and call-centre-based insurance agency.

It employs more than 400 people.

IA said the deal will grow its already well-established U.S. individual life insurance business and diversify and complement its distribution capabilities.

The deal is expected to close in the first half of 2024, subject to regulatory approvals and customary closing conditions.

IA Financial Group is one of the largest insurance and wealth management groups in Canada.

The Canadian Press

The Canadian Press is a national news agency headquartered in Toronto and founded in 1917.

Even as the Covid-19 pandemic lost some of its grip on daily life last year, Canada’s life and health insurers set another record for benefits paid.

Insurers paid $114 billion in life and health benefits in 2022, slightly more than the previous record set in 2021 and $11 billion more than pre-pandemic levels, the Canadian Life and Health Insurance Association (CLHIA) said Tuesday in its annual statistics report.

Nearly half ($53.7 billion) the benefits paid represented annuity claims, down from $58.1 billion in 2021, while health insurance benefits set a new record of $43.9 billion. The $650 million paid in mental health support claims was a 10% increase from the previous year and nearly double the 2019 total.

Life insurance benefits increased to $16 billion last year from $14 billion in 2021. The CLHIA said 22 million Canadians own $5.5 trillion in life insurance coverage, with total coverage increasing “steadily” over the previous decade. “The increase may be due to individuals needing to cover larger mortgages and higher cost of living,” the report said.

Individual life insurance made up 65% of the total life policies in force, up from 58% in 2012. The growth was driven largely by term insurance, which accounted for 40% of all life insurance.

Total premiums collected by insurers in 2022 rose to $145 billion, up from $139 billion the previous year. The increase was led by premiums for health insurance (up 9.4% to $55.9 billion) and life insurance (up 5.5% to $27 billion), the report said, while premiums for annuities and segregated funds were basically flat (up 0.2% to $62.2 billion).

The deferred sales charge (DSC) structure in segregated funds was banned this year, to align with the DSC ban for investment funds implemented this past June.

Insurance regulators are also developing a guidance on upfront commissions for segregated funds after a consultation found risk of customer harm.

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.

Despite dramatic changes to the life insurance industry over the past few years, life agents say the underwriting process has remained relatively static.

“The big carriers haven’t updated the health questionnaire,” said Amandeep Banwait, a financial security advisor and investment representative with Canada Life Assurance Co. and Quadrus Investment Services Ltd. in Toronto. He said carriers are still asking about major illnesses, particularly those that could affect lifespan.

Ahilan Balachandran, a certified financial planner and founder of BlueMind App, an insurance customer management program, said that underwriting guidelines have become more favourable for chronic diseases such as diabetes. Diabetes still is considered a risk, for example, but applicants aren’t automatically rejected for having it.

“One reason is medical improvements,” he said. “[Insurers] are saying, ‘You have diabetes, but you have control over it and don’t have other risky lifestyle habits, so we can offer [you] a lower rate.”

Other lifestyle habits like non-medical use cannabis are no longer deemed high risk. Balachandran said that if an applicant indicates they use cannabis but there aren’t cotinine* markers in their urine, they’re treated as a non-smoker and offered non-smoker rates.

Banwait said that he’s heard anecdotally that insurers are more worried about cannabis smoking than consumption in general.

“What they are very concerned about is the act of combustion,” he said. “When you burn something and you inhale carbon, that is a known carcinogen. Because of that, that’s why they would say [that] regardless of what the law says, it’s simply the act of combustion that can rate you as a smoker.”

As for the length of the underwriting process itself, Banwait said he saw an uptick in people looking for coverage while the industry experienced a staffing shortage.

“There were so many applications being put in [earlier this year] and we didn’t have enough underwriters,” he said, leading to approvals being delayed for several months.

Technology has helped with turnaround in some cases. Michael Van Alphen, vice-president of insurance solutions with Sun Life Assurance Co. of Canada, said many clients are now experiencing a less invasive, quicker process when applying for insurance coverage.

“Across the industry, we’re seeing things like fewer mandated health exams and online data intake because of improved risk management and data science capabilities,” he said. “For clients, that means fewer tests. Combine that with electronic meetings, online data intake and e-signatures, and it’s a better experience for everyone.”

One other change Banwait’s seen is a short line asking if a client has had Covid-19. He encourages his clients to disclose if they’ve had the virus.

“At this point, basically everyone has had Covid-19,” he said, and none of his clients has experienced negative consequences from making such a disclosure. “From what I’ve been seeing, [insurers] are treating it as if it was just the flu.”

*Correction: A previous version of this article said “protein” markers, which was incorrect.

Renée Sylvestre-Williams

Renée Sylvestre-Williams is a journalist covering finance and business who has written for many Canadian and U.S. publications. 

A new report from an advocacy group finds two of Canada’s biggest insurers are taking steps toward climate action, but still have a ways to go.

The report from Investors for Paris Compliance says climate action from Sun Life Financial Inc. and Manulife Financial Corp. is important because they are Canada’s first and fourth-largest fossil fuel investors (a separate category from banking).

The second annual assessment report says Sun Life Financial Inc. started disclosing some financed emissions this year, but that it still has no overall policy on phasing out fossil fuel investments, including coal.

Sun Life had investments totalling US$11.6 billion in coal and US$12.7 billion in oil and gas last year according to data from the advocacy coalition Investing in Climate Chaos.

The insurer said in a statement that it’s committed to doing its part to help solve the climate challenge, and has been building a climate team to track and measure its performance among other initiatives.

The report says Manulife Financial Corp. made progress by formalizing coal exclusion policies this past year, including not investing in new thermal coal projects globally, and setting interim targets.

It notes however that while both companies have started to disclose some financed emissions, they still exclude significant chunks of their overall assets under management from disclosure, and don’t provide details on how they intend to meet their net zero by 2050 targets.

Manulife, which the report says had US$5.1 billion in coal investments and US$6.7 billion in oil and gas investments last year, declined to comment on the report but pointed to its numerous climate goals including interim investment emissions targets set for 2027.

Ian Bickis, Canadian Press

Ian Bickis is a reporter with The Canadian Press, a national news agency headquartered in Toronto and founded in 1917.