Foreign Life Insurers Seek Release of Assets

Summary#

Two foreign life insurers gave formal notice that they plan to ask the federal regulator to allow them to release the assets they hold in Canada. The notices come from Gerber Life Insurance Company (notice dated June 26, 2021) and Lincoln Life Assurance Company of Boston, carrying on business in Canada as Liberty Life Assurance Company of Boston (notice dated June 19, 2021). Both say they will apply to the Office of the Superintendent of Financial Institutions (Canada) under section 651 of the Insurance Companies Act (Canada).

What it does#

• Gerber Life Insurance Company intends to apply, on or after July 26, 2021, for an order allowing it to release the assets it keeps in Canada. Policyholders or creditors who oppose this were asked to file an opposition by July 26, 2021.
• Lincoln Life Assurance Company of Boston (doing business as Liberty Life Assurance Company of Boston) intends to apply, on or after August 2, 2021, for the same kind of order. Oppositions were invited by August 2, 2021.
• Oppositions were to be sent by mail to the Office of the Superintendent of Financial Institutions (Canada), Regulatory Affairs/Legislation and Approvals Division, 255 Albert Street, Ottawa, Ontario K1A 0H2, or by email to approvalsandprecedents@osfi-bsif.gc.ca.
• The notices do not say how much money or which specific assets are involved, or why the companies want to release them.

Who's affected#

• Policyholders of Gerber Life Insurance Company and of Lincoln Life Assurance Company of Boston (operating as Liberty Life Assurance Company of Boston) in Canada.
• Creditors with claims against those companies’ Canadian operations.
• It is unclear from the notices whether other groups (employees, agents, provincial regulators) will be affected.

Why it matters#

• If the regulator allows the release, assets that back Canadian insurance contracts could be moved or dealt with differently. That could affect how claims are paid or how secure those funds are.
• The notices gave short deadlines for anyone who wants to object. They also give no details about amounts or the companies’ reasons, so people directly affected may want to contact the regulator for more information.