Customers now have greater protection in the event of bankruptcy of their life insurer.
Assuris, the member-funded nonprofit that protects policyholders in the event of life insurer failure, has increased its guaranteed level of coverage by five percentage points in four main categories.
As of May 25, benefits are now covered up to the greater of 90% of promised benefits, up from 85% before the change, or the following amounts:
- Death benefit: $1 million (up from $200,000)
- Health care expenses: $250,000 (up from $60,000)
- Monthly income (e.g. from annuities): USD 5,000 per month (from USD 2,000 per month)
- Separate Fund Cash Value and Guarantees: $100,000 (from $60,000)
Additionally, cumulative value benefits are now fully protected up to 90% or $100,000, whichever is greater, compared to the immediate maximum of $100,000. Examples of cumulative value benefit products include accumulation annuities, universal annuity accounts, and lifetime dividend deposit accounts.
“Assuris is confident that this increased policyholder protection will strengthen public confidence in the industry,” the organization said in a statement.
Every carrier writing about life and health in Canada must become an Assuris member, while fraternal benefits associations and prepaid health care companies can elect to become members.
Examples of Canadian life insurer bankruptcies include Union of Canada Life Insurance, which went into liquidation in 2012, and Life of the Confederationwhich collapsed in 1994
