Canadian Life and Health Insurance Association responds … sort of

The Canadian Life and Health Insurance Association

The Canadian Life and Health Insurance Association

Donald Guloien, Chair CLHIA, ducked my questions

You may recall, I wrote an open letter to Donald Guloien on January 28, 2015 in response to remarks he made on Nov 18, 2014 at the CLHIA Annual “Advocacy Day.” (see letter and Guloien speech in my Jan. 27 post).


Well, on March 10, 2015, I received a response letter. To say it is a minimal, nominal, token response would be an under statement.


Mr. Guloien’s speech to his Ottawa audience was twenty minutes, I wrote a three page, 700 word letter asking six serious questions regarding life settlements and he responds by having someone else write a letter with just three sentences about my book.


Dear Mr. Goodman,

Your letter dated January 28, 2015 to Mr. Donald Guloien, Chair of the Candian Life and Health Insurance Association (CLHIA), has been referred to me for response.

Thank you for enclosing your book, “Why are Canadian Seniors worth more dead than alive? I have perused the book and must say that I cannot agree with many of the assertions contained in it. There are serious risks associated with life settlements and i disagree with the general thesis of the book that they should be promoted in Canada.

Perhaps we can have a discussion about this matter at some point. I can be reached at (416) 359-2044 or at

Yours very truly,

Frank Zinatelli, Vice President and General Counsel.


Chair, Canadian Life and Health Insurance Association and President and Chief Executive Officer, Manulife Financial Corporation   photo courtesy:

Donald Guloien, Chair, Canadian Life and Health Insurance Association and President and Chief Executive Officer, Manulife Financial Corporation (photo courtesy:

Where to begin?

Invariably, a non-answer is often the most revealing and in this case it’s not what they said, it’s what they didn’t say. Basically nothing.


First, let me be clear. I am advocating for Canada’s aging population and I believe that a well-regulated life settlement industry can significantly benefit seniors in retirement (see a few facts below), and millions of Canadians could benefit from life settlements.

I have been associated with the life insurance industry for more than fifty years and in my January 28th letter, I told Mr. Guloien that I would welcome an open conversation related to my questions about life settlements. Instead, what did I get? A letter from a lawyer.

This is a critical issue. It is about what is best for Canadians, especially the more than five million seniors, many of whom are struggling financially in retirement.


The well being of millions of seniors and billions of dollars are at stake

First, the issue of life settlements and life insurance is about money and doing what is right for policy owners. It is about 21 million Canadians and millions of seniors who have invested in life insurance but cannot access the fair market value in their life insurance policies if they want to cash in their policy before they die.

A study by the London Business School looked at 9,002 policies transacted for life settlements and found that policy owners received, on average, more than four times the cash surrender value that they would have received from insurance companies. This is what a free market system is for and how it should operate. And this is why the CLHIA is opposed to life settlements and why they have no answers to my questions.


questionmarkConsider these non-answers:

Mr. Guloien, Chair of CLHIA, an association that purports, “To promote, on behalf of its members, public policies that contribute to the betterment of the Canadian economy and society,” (my italics), does not respond to me when I raise valid questions about an important public issue. Instead, he has the association’s lawyer reply, and even then there are no answers to my questions.


  1. Mr. Zinatelli in his letter says, “There are serious risks associated with life settlements.” Well, that just raises more questions: Can he be specific? Can he provide factual, supportable evidence? How extensive are such risks?

Of course there are risks, life is fraught with risks. Crossing the street is a risk. People buy life insurance because of risk. But people measure risk and decide on the best course of action. So I ask: Regarding life settlements, has CLHIA measured the “serious risks” they refer to and compared those risks to the benefits – benefits to policyholders, not the insurers? And how do such risks compare to other consumer risks in the financial, medical, pharmaceutical, technology sectors?

Risks in life settlements are mitigated by a well-regulated industry – as is done in other jurisdictions around the world. And as is done in the financial, medical and technology sectors.


2. Mr. Zinatelli also says, “i [sic] disagree with the general thesis of the book that they [life settlements] should be promoted in Canada.” He misses the point, and the thesis. I am not “promoting” life settlements – like some new hair cream – I am advocating for Canadian seniors and addressing why and how life settlements can, and should, be a fundamental part of the Canadian free market system and economy. It is about providing a well-regulated secondary market that allows policy owners, if they so choose, to receive fair market value for an asset that they own. That’s it. It is not “promoting,” it is advocating for the public interest. And the public interest trumps the insurance companies’ self-interests. I suggest that CLHIA is “promoting” its self-interests when it, as Mr. Zinatelli does, generalizes and by innuendo engages in promotional scare tactics, disinformation and public confusion.


A few facts

arrow-005Mr. Guloien, Mr. Zinatelli and everyone in the life insurance industry need to address the facts. If – and it’s a big if – there are “serious risks” then they need to quantify them and compare them against the benefits.


Here are a few facts that do quantify the need, and they are sourced and cited in our document, The Case for Life Settlements

  • The growing need for additional financial support for Canadian seniors is indisputable
  • RRSPs, annuities and more savings are not enough when people do not have extra money to save
  • Only 24 per cent of eligible tax filers contributed to an RRSP in 2011, depositing less than five per cent of what they were allowed to contribute. In 2011, just over six million Canadians belonged to a registered pension plan.
  • Household personal savings have been falling — from a high of 20.2 per cent in the early 1980s to a low of 2.1 per cent in 2005. Savings have rebounded slightly since then (3.9 per cent in the third quarter of 2012) but are still, on average, “woefully inadequate” to finance retirement
  • Most workers – a whopping 76 percent – have no pension plan at all, and that number has been steadily rising for years
  • The increase in debt among seniors was the biggest year-over-year of all age groups in the second quarter of 2013, at 6.5%
  • 600,000 or more Canadian seniors are living in poverty
  • 600,000 or more Canadians over age 65 are still in the workforce
  • By next year, 1 out of every 5 Canadian adults will be 65 or over. And a decade from now, one-third of Canadian households will be in retirement
  • 51% of Canadians over 65 own life insurance policies, which as an asset class they cannot access a fair market value for, which could be worth at least four times as much as the cash surrender value. And if, in many cases, there is no cash surrender value the additional proceeds could be many times greater
  • The growing cost of government healthcare, pensions and long-term care is undeniable and life settlements can help alleviate some of that burden
  • Life settlements are an established, well-regulated and effective asset class in jurisdictions around the world and they provide substantial benefits for seniors, governments, financial advisors, brokers and investors
  • In the USA, the Life Insurance Settlement Association (LISA) states that American policy owners are paid more than $7 million/day in life settlements
  • Canadian seniors are unaware of the hidden value that they could access in their life insurance through life settlements and this ignorance is a serious barrier to changing legislation and allowing them open market access to an asset that is rightfully theirs.
  • 80%-90% of life insurance policies are cancelled or lapse, which means the insurers never have to pay the full death benefit. Life settlements change this.


canada-leaf_v_e_cmyk.254133203These are but a few facts that demonstrate the real need for Canadian seniors to be able to access their life insurance asset through life settlements, if and when they want or need to. It is not about “promoting” or vague risk innuendo, it is about doing what is right.


A well-regulated life settlement industry will put more money in Canadian policy owners’ pockets (often more than four times as much) rather than leaving that money in the life insurance companies’ pockets. It’s time for Mr. Guloien, not his lawyer, to join the conversation about how best to do this for Canadians.