(July 7, 2005) Following the example of the Canadian Deposit Insurance Corporation, CompCorp, which protects policyholders in the event of insurance company bankruptcy, has increased its coverage limits.
As CompCorp announced today, accumulated value is now fully protected up to $100,000, and for cash values, policyholders will receive at least 85% of the promised benefits. Under $60,000 CompCorp guarantees 100% protection.
Similarly, guaranteed amounts of segregated funds are protected up to 85% of promised benefits and 100% below $60,000.
The coverage increase was approved at CompCorp’s recent annual meeting and “reduces potential consumer confusion about protections offered in other financial services sectors,” CompCorp said in a statement.
“Financial advisors, brokers and insurance companies can recommend the best product to suit their clients’ needs without worrying about the level of protection.”
“Providing adequate insurance is essential to protect policyholders. “The increase in coverage ensures that life and health insurance consumers are now better protected against devastating personal financial losses,” added CompCorp CEO Gordon Dunning. “We are committed to protecting the benefits of Canadian policyholders in the event of their insurance company going bankrupt.”
David Newman, president of the Canadian Federation of Independent Deposit Brokers, led a campaign to persuade Ottawa to raise CDIC limits. That happened in this year’s federal budget when those limits were raised to $100,000 from $60,000. The budget received royal assent last week.
Newman says he’s glad CompCorp decided to follow suit. “I spoke to them some time ago and they said they would meet (CDIC’s move). They just have a different approach than the federal government.”
“The limits needed to be higher given inflation and people’s reliance on savings and RRSPs,” he adds. “CompCorp is better aligned with the market because it is part of the insurance industry and is largely driven by market needs.”
|
Rexcited Npossibly STories |
|
|
Still, Newman says he’d like to see Ottawa go further and implement automatic CDIC coverage reviews and perhaps consider indexing inflation limits. “Getting anything passed through parliament is an extremely difficult task. There should at least be some sort of review process.
Submitted by Doug Watt, Advisor.ca, doug.watt@advisor.rogers.com
(07/07/05)
