Answering insurer’s statements regarding life settlements in the Insurance Journal

The Financial Services Consumer Alliance is offering a warning to any advisors who have read or will be reading this text written by Alain Theriault in the Insurance Journal.


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  1. Richard, as I said before they are Guidelines and if the life insurers are unwilling to be more flexible, then yes Ontario Lifeline is willing to step in and find the best third party alternative legally available for the policyholder.
    It may be that the policyholder is 85 and healthy and has no longer any need for the life insurance and in such a case he should be allowed to deal with a local Ontario buyer willing to purchase his policy rather than being forced to contact Quebec or the US to sell his policy.
    This morning I went to meet Christine Elliott the MPP for Whitby and the widow of the late Jim Flaherty and asked her to perpetuate his legacy by getting FSCO to PROMULGATE updated Life Settlement Regulations in place of the DRAFT Viatical Settlement Regulations sent out by FSCO for Stakeholder Comments in July 2001.
    By ontario lifeline

  2. Richard, the AIDS lobby had their chance with the Bob Rae NDP government but missed the boat because John Jordan took 3 years (instead of 3 weeks) to publish his Feasibility Study and by then in 97 Mike Harris and the PCs were in power. They preferred a “common sense” approach and brought in Schedule G of the Red Tape Reduction in December 2000 with a DRAFT set of Viatical Settlement Regulations in July 2001. But when Harris resigned and Eves and Ecker took over the matter was dropped until after the election when the Liberals took over and again they missed the boat.
    By Daniel Kahan

  3. Richard, the problem about reverse mortgage life settlements is that the trafficking restriction mentions “hypothecation, assignment or pledge”, which can be construed to include the collateral assignment of a life policy. While nobody has a problem with the Canadian banks lending the policyholder up to the CSV and taking a collateral assignment of the life policy, the same cannot be said with any degree of absolute certainty with respect to a Living Benefit loan made by a third party. While it would appear that life insurers including Manulife do not object to a one-off “top-up” loan where they are not willing to exceed their cap of $100K, the same cannot be said for a healthy 75 year old Ontarian who wants to “monetize” his $1 m. T100 policy.He could legally donate his life policy to a Canadian charity and receive a charitable tax receipt, and he would be allowed to contact an entity based OUTSIDE Ontario to sell or obtain a loan, provided they did NOT solicit for his business in Ontario.
    The FSCA should be contacting the Market Conduct Regulators,especially in Ontario, to confirm the above and whether they are willing to be PROACTIVE and call on the new Ontario government to finally implement Regulations under Schedule G of the Red Tape Reduction Act 2000. As a first step they could start with the DRAFT Viatical Settlement Regulations issued in July 2001 for Stakeholder Comment and update the DRAFT to include Life Settlements and give special consideration to LOANS compared to SETTLEMENTS.
    While Ontario has no control over OSFI and the federally-regulated finanial institutions, there is no reason why they should not SPECIFICALLY allow Ontario Credit Unions to make reverse mortgage life settlements and treat them as SECURE loans just like they can do with a reverse mortgage secured by the (volatile) equity in the home.
    By Daniel Kahan

    • Darryl, it is legal in all provinces to sell your life policy. What is restricted in some province is starting a business that would make solicitations to sell your policy. As a result, it is legal for you to contact anyone anywhere to sell your policy. If you want to sell your policy in China you can… So yes you can sell your policy to a Quebec company. Please note the following. Verify that your contract does allow a transfer of ownership without the approval of the insurer. Some life contracts do restrict transfer of ownership. Also understand also that selling your policy can create a taxable gain. Have you considered a loan settlement?

      I talk about this in my EHotLine. Please visit for more info

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