April 12, 2018 Insurance Decisions and Freeze and cease trade orders

Montréal, April 12, 2018 – An agreement has been reached between the Autorité des marchés financiers (the “AMF” or the “Authority”) and The Canada Life Assurance Company (“Canada Life”) under which administrative penalties of $500,000 and $800,000 were paid for non-compliance relating to the distribution of group insurance products offered to the credit card holders of two retailers.

Canada Life acknowledged that in distributing these insurance products, it failed to comply with various provisions of the Act respecting insurance, CQLR, c. A-32, and the Act respecting the distribution of financial products and services, CQLR, c. D-9.2. In particular, it offered the products through telemarketing firm employees, namely, individuals who were not certified by the AMF for such purpose, and it allowed certified persons to not fully perform their roles in the distribution of these products. The manner of distributing the products was not in keeping with sound commercial practices.

In one case, the products at issue were called Term Life Insurance, Accident Insurance Plan, Guaranteed Issue Life Insurance, Income Protection Plan and Critical Illness Insurance and were offered in Québec for approximately four years. The information available for the years 2011 through 2013 reveals that 4,746 certificates were issued and premiums of $2,855,973.98 were collected by Canada Life for these products. Distribution via telemarketing was discontinued in December 2013.

The other case involved three insurance products—Accident Plus Insurance, Term Life Insurance and Sure Life Insurance PlanTM—that were offered in Québec for approximately seven years, from 2010 to 2017. Between 2013 and 2017, 96,658 certificates were issued and premiums of $10,664,382.50 were collected. Canada Life suspended the distribution of these products in December 2017.

Canada Life confirmed that it has taken additional measures to ensure that a similar situation does not occur. Moreover, it has undertaken to notify all persons who are still insured with these products that a certified representative is available to answer their questions, in particular to ensure that the insurance product purchased meets their needs. The agreement has no impact on the validity or the terms and conditions of the products.

The Autorité des marchés financiers is the regulatory and oversight body for Québec’s financial sector.

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