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Products linked to credit cards : 3 life insurers heavily penalized

by

Hubert Roy

12 April 2018 15:24

Thefinancial markets Authority has announced this afternoon they have imposed administrative penalties totaling $ 2.1 million for the three life insurance companies for practices related to the distribution of products for holders of credit cards.

The three insurers sanctioned are Manufacturers (Manulife), Canada Life and ACE INA (Chubb). They have all agreed to an agreement with the Authority. In two of the three cases, the sanctions are affecting products sold to holders of credit cards of the deceased Sears stores.

In all three cases, the insurers have admitted to not having complied with certain provisions of the law by having offered these products through employees of firms télémarkéting, or persons who are not certified with the Authority at this end, and in the tolerant that the certified individuals acting within the framework of the distribution of this product do not fulfil their role fully. He is also accused of not having followed sound business practices.

$ 1.3 Million of penalties for Canada Life

Canada Life has agreed to pay administrative penalties of $ 500 000 and $ 800 000 for breaches related to the distribution of group insurance products offered to customers for credit card holders of the two retailers, who are not identified.

In one case, the products referred to were appointed insurance Plan-term life, accident insurance Plan, life insurance Plan guaranteed Plan income protection and critical illness insurance Plan and were offered in Quebec for about four years. The information available for the years 2011 to 2013 inclusive, one can see that 4 746 certificates have been issued, and that premiums in the amount of 2 855 973,98 $ have been received by Canada Life for these products during these same years. The distribution by télémarkéting of these products ceased in December 2013.

In the other case, there were three insurance product called insurance Plan, Accident Plan, life insurance and life insurance Plan Protection plus ® has them been available in Quebec for about seven years, i.e. between 2010 and 2017. Between 2013 and 2017, 96 658 certificates have been issued and premiums in the amount of 10 664 382,50 $ have been collected. Canada Life has suspended distribution of these products in December 2017.

«Canada Life has confirmed having put in place additional measures to ensure that a similar situation does not occur again. Similarly, it has taken the commitment to notify all insured persons still holders who have purchased the affected products that a certified representative will be available to answer all of their questions in relation to these products, in particular to ensure that the insurance product purchased is suitable for their needs. The agreement has no impact on the validity, the terms and conditions of the products in question, » says the Authority.

Penalty of $ 350,000 for Manulife

As for Manulife, its penalty is $ 350 000. The key deficiencies related to the distribution of an insurance product called Diet hospitalization Sears. It is an insurance product that was intended for the holders of credit cards from Sears.

This product has been available in Quebec for about three years, 4 970 certificates have been issued from 2012 to 2014. Mli has collected premiums in the amount of 512 047,37 $ during these same years.

Manufacturers have already ceased distribution of this product since the 31 December 2015, and confirmed that it had put in place the necessary measures so that the distribution of all of its products is carried out in accordance with the law. Similarly, Mli has made the commitment to notify all insured persons still owners of the product referred to as a certified representative is available to answer all of their questions in connection with these products.

ACE INA also sanctioned

The fine to be imposed on Chubb, for its subsidiary, ACE INA is $ 450,000. The whole is linked to breaches of the distribution of an insurance product called the financial Regime for serious diseases Sears, offered to holders of credit cards from Sears. Chubb has admitted to not have followed sound business practices on the occasion of the distribution of the Product and not to have complied with the various provisions of the act.

The product has been available in Quebec for about four years, from 2012 to 2015, ACE having thus issued, for the period from 2012 to 2014, 10 622 certificates of insurance and collected premiums of 1 087 706 $ during these same years.

ACE had already stopped the distribution by télémarkéting of this product for the month of November 2015 and confirmed that it had put in place the necessary measures so that the distribution of all of its products is carried out in accordance with the law. Similarly, Chubb has made the commitment to notify all insured persons still owners of the product referred to as a certified representative is available to answer all of their questions in connection with this product.

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