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.

The time has come!

LISAC masthd






“Someone is sitting in the shade today because
someone planted a tree a long time ago.” – Warren Buffett

Recently, I have been having conversations with senior government officials, MPPs and Ministers regarding my concerns about Canadian seniors and the looming financial plight they face in retirement. I have found that most people in a position of responsibility are aware of the overarching problem and the statistics. But few are talking about how life settlements can help alleviate the alarming reality.

wheelchair-silohetteA few facts

All these facts are sourced and cited in the Case for Life Settlements document.

  • In the second quarter of 2013 the increase in debt among seniors was the biggest year-over-year of all age groups
  • The average poverty rate for people over age 65 in Canada was 7.2 per cent between 2007 and 2010, a [significant] increase of about two percentage points.
  • It is estimated that at current funding levels, government programs for long-term care will only cover about half of the total cost. As a result, Canadians currently have an astounding long-term care funding shortfall of about $590 billion or roughly $54,000 for each baby boomer in Canada. Given the magnitude of the challenge, urgent action is required to ensure that Canadians will have access to the long-term care they will need.
  • The aging of the population will accelerate over the next two decades and between 2006 and 2026, the number of Canadian seniors is projected to increase from 4.3 million to 8.0 million.
  • The number of Canadians aged 85 plus will nearly double, rising from about 500,000 in 2006 to about 900,000 in 2026 (80% increase).
  • It is estimated that the number of Canadians eligible for Old Age Security benefits will increase from 394,000 in 2013 to 537,000 by 2030. Many will require financial assistance in retirement.
  • As of July 1, 2010, there were 1,333,800 people aged 80 years and over in Canada, representing 3.9% of the total population. The number of people aged 80 years and over could double by the year 2031. It is projected that there could be 17,600 centenarians by 2031 and 78,300 centenarians by 2061.
  • Statistics Canada issued a report conducted by Employment and Social Development Canada (ESDC) that analyzed the middle class that concluded, “middle income earners saw their wages stagnate and debts mount between 1993 and 2007 and that they are unlikely to move into higher income brackets.” In a sweeping summary, the analysts concluded: “the Canadian dream is a myth more than a reality.”

There are many more statistics, but you get the point.

Now is the time

Managers do things right and leaders do the right thing. – Peter Drucker

This is not simply a time to manage things better, it is a time for true leadership. We must do the right thing. I say this sincerely and adamantly to everyone I speak with, from government leaders and advocacy groups to financial advisors and the CEOs of Canadian insurance companies. We know that whatever plans are in the works, they are not enough and that life settlements can play a valuable role in helping seniors with their financial needs. Not too mention, alleviate some of the financial burden on governments (taxpayers). To have government regulations that essentially prevent life settlements in Canada is … well, financially harmful to seniors and irresponsible governance.


LISAC-logo aloneThe Life Insurance Settlement Association of Canada (LISAC)

We have formed the Life Insurance Settlement Association of Canada because Canada needs leadership in life settlements – now. The new not-for-profit association is taking the lead in advancing and developing a well organized and well-regulated Canadian life insurance settlement industry.


The goal for the Life Insurance Settlement Association of Canada is similar to that of LISA in the United States.

To educate consumers and advisors about a life settlement as an alternative to allowing an insurance policy to lapse or be surrendered for less than its fair market value, and to advance the highest standards of practice and professional development for the life settlement industry.

Download the initial document outlining LISAC’s The Case for Life Settlements Or email us at: and we’ll send you a copy.

Taking on the life insurance companies

 Someone has to advocate for Canadian seniors


Advocacy is not a top priority for mainstream media because their mandate is first and foremost what they call “hard news.” Obviously, they have lots of “soft” content, from entertainment and travel to personal advice but their bread and butter is news. Of course, when an advocacy movement is big enough, important enough and loud enough, then there’s chance the media will pick up on it – at least for a day or two. Beyond that, it’s dependent on good investigative journalists. Or an organized group advocating in the best interests of the public. Or both.


Never doubt that a small, thoughtful group of people can change the world. Indeed, it is all that ever has. – Margaret Mead


Canadian seniors have many advocacy groups and yet, there is not one group that I know of advocating for them regarding the indisputable benefits life settlements can bring to their lives. The selfish motivation behind life insurance companies’ opposition (billions of dollars) is unacceptable, and I question the integrity of organizations like CARP (Canadian Association of Retired People) and Advocis, (Financial Advisors Association of Canada), who purport to work on seniors’ behalf while remaining silent on the veracity and proven value that life settlements can bring to Canadians. It is not the rank and file membership of such organizations that are culpable, it is the leadership. There are many members of Advocis (financial advisors and brokers), who support life settlements but cannot push for them due to the threat from life insurers who can cancel their licensing agreements. It’s intimidation that is in the insurers’ interest, not in the best interests of the advisors’ clients. And very few of CARP’s 300,000-plus, aging members know about the value life settlements could provide because CARP isn’t telling them. Every member of Advocis and CARP should ask their executive where they stand on establishing a well regulated life settlement industry in Canada.


Anyone who doesn’t see the problem – and the obvious solution – or chooses to ignore it, either has their head in the sand or their hand in their own pocket.


David&GoliathBuilding a coalition

Grassroots movements form around a few principles and if the fundamentals are right, the movement always wins. As in the story of David and Goliath, right, not might, prevails. And I believe the battle to bring a well regulated life settlement industry to Canada – as exists in the US, England, Europe and Australia – is right. And the might of the life insurance companies’ opposition will not prevail.

A few principles:

  1. The cause must be right for the majority of people (over 5 million Canadian seniors).
  2. To fuel a movement there needs to be an oppressor using their size and clout to protect their self-interest (Canadian life insurance companies) at the cost of the majority’s interest.
  3. An effective coalition must unite behind the cause and engage the majority.
  4. The politics will move if the public move.

The life settlement issue in Canada meets these criteria and a coalition has formed and momentum is building.


LG-IE Screen shotRecently, I wrote a column for Investment Executive magazine (Feb. 1, 2015 issue) and covered the essence of the issue in about 700 words. I make the entire case in my book, Why Are Canadian Seniors Worth More Dead Than Alive? The book, the articles (more to come) and the current supporters are just the catalyst and the beginning of a growing advocacy that will ensure that what is right will be done for the millions of Canadians with life insurance.


I pose another question: Was Donald Gulioen, CEO of Manulife and Chair of the Canadian Life and Health Insurance Association (CLHIA) sincere when he said in his Nov. 18, 2014 speech (see previous blog below), “We’re deeply involved in … and committed to … the health care and financial well-being of Canadians, and Canada’s economy.”? If he was, then he and his colleagues need to walk the talk and do what the rest of the world is doing and support life settlements. Canada deserves it. And every owner of a life insurance policy in Canada deserves it, and is entitled to it.

How deadly spin could be killing your retirement

An insiders view of  the insurance companies and media spin machine

An insiders view of insurance companies and their media spin machine. It’s not working for you!

What life insurance companies don’t want you to know and the spinmeisters are perpetuating

You may not yet have read my book, Why Are Canadian Seniors Worth More Dead Than Alive? or heard about why “life settlements” are financially helping millions of seniors around the world – except in Canada. And if you’ve heard a “negative” story concerning life settlements, it is because misinformation is being spun by Canadian life insurance companies to prevent people from maximizing the inherent value in their life policies – in an open, free and fair market system.


My recently published book (July 2014), lays out the egregious financial disservice Canadian seniors are suffering from because of life insurance companies’ action and inaction. If you want further insight on the action they take to keep people in the dark, read Wendell Potter’s book, Deadly Spin (2010). If you want to know about their inaction, and the potential value you have in your insurance policy, read my book.


Life settlements – the time has come!

In the case of life settlements, my book demonstrates why millions of Canadians who own a life insurance policy cannot maximize their policy’s cash value in an open, market system. I cover, in detail, why it is wrong and how the time has come to fix a blatant oversight that prevents millions of seniors from benefiting financially. The purpose of the book and my goal is to inform the public so that they can be the catalyst that leads to changing the egregious regulations on the legislative books of six Canadian provinces.


IE-LogoThe problem is spinning – and it’s out of control

This is a two-pronged problem: 1) It is manipulation of the free market system by insurance companies; and 2) It is perpetuated by the insidious insurance PR machine, and unwittingly or otherwise, by the media’s lack of interest and investigative journalism. An October article in Investment Executive (IE) is a good example.


In short, the editor and a writer at IE ran an ill-informed and misleading article, Insurance: Policy sales, transfers under fire. Ontario regulator says advisors may be on the wrong side of the rules. At best, it misrepresented life settlements and at worse, was a major disservice to Canadian seniors and the financial advisors and brokers who serve them. (See updated postscript at end of this blog).


Millions of dollars, even billions are at stake

Let me be clear, I was interviewed for an hour by the writer, a Ms. Harman, and she had had a copy of my book for several weeks. There is no doubt that she had an opportunity to gain a clear understanding of life settlements and how they are different than other services and products that too often get co-mingled with life settlements. The question is: Why would a well-respected publication like Investment Executive not produce thorough, balanced, fact-based coverage of this most important issue in the financial sector? And why would IE editors allow Ms. Harman to co-mingle a number of non-related or marginally related subjects with life settlements? Viaticals, STOLI and borrowing against life insurance are quite different from life settlements and to treat them as she did is a disservice to readers and the aging Canadian boomer market. They deserve to know what millions of people in other countries know and have the opportunity to access an asset that is theirs. In the United States alone, over $7 million a day is being received by policy owners through life settlements.


A fledgling $40 billion Canadian industry

The current potential for life settlements in Canada is estimated to be $40 billion and that is based on just 5% of the total, in force, life insurance policies in only four Canadian provinces: Saskatchewan, Quebec, New Brunswick, Nova Scotia. In the United States the market is projected to be $140 billion in 2015 (Source: Conning Research). There is a great need to unlock the hidden asset value in millions of life insurance policies and one stroke of a government pen can dramatically improve seniors’ opportunity to financially improve their retirement years.


Life settlements can be a win-win for Premiere Wynne and our aging population

Life settlements can be a win-win for Premiere Wynne and our aging population

Current reporting, and the confusion it causes, compounds what is a well-documented problem for our aging population as they face declining financial security in retirement. The problem is serious enough that Ontario Premier, Kathleen Wynne proposed establishing an Ontario Pension Fund during the recent election campaign. And yet, the media has largely ignored or improperly and inadequately reported the significant benefits life settlements could play in mitigating a portion of the looming financial crunch. Most have not fully investigated life settlements as a valid financial option for millions of people. Nor looked into why life settlements are among “the most highly-rated investments available,” as ranked by Franklin Templeton, “ … in the same league as government bonds.”


Another insufficient article

Ironically, IE magazine ran another article on Oct. 31, 2014 titled, Financial literacy strategies must take seniors’ needs into account by Lee-Anne Goodman (no relation). In it, they quoted Susan Eng, vice-president for advocacy at CARP, who said the study reflects what her organization is tackling: “Not only do seniors not have enough money saved for their own retirements, but as they try to invest for their retirement, they are often vulnerable to shark activity by financial advisers.” This is a valid point, in part. As are other points in the article. Eng said,”They are losing their life savings, and that concerns us the most.” The article also stated that “The number of Canadians working past the age of 65 has almost doubled over the last seven years. There are now close to 600,000 seniors still in the workforce.” The article goes on to state that Eng says governments of all levels must do more to encourage registered pension plans, and to crack down on financial predators who target seniors. And yet, there is not one mention of the financial benefits that life settlements are providing to lighten seniors’ financial burden, around the world – except in most of Canada. Why are life settlements so ignored by organizations like CARP, Advocis (the association of Canadian financial planners) and the media in general? Or is this part of what Wendell Potter calls the “dark art of PR?” Are organizations like CARP (who receive significant advertising revenues from insurance firms) using code words like “shark activity” and “financial predators” to imply or co-mingle life settlements with pejoratives like “viatical and “STOLI?” Just as Ms. Harman’s article did.


Two books-2Life insurance profits

I cover in my book why life insurance companies are dead against life settlements for self-serving interests – profits. And why they are not putting  customers’ interests first. They are the main reason for the lack of open discussion in Canada.


Current regulations prevent policyholders from being able to sell their policies in an open market, for a fair market value, in a well-regulated industry. In my book, I share my personal experience as to how one life insurer tried to intimidate my firm and stop us from offering life settlements. I suspect such intimidation practices are a regular occurrence between insurers and insurance brokers. Now, as I work with others to change the existing, harmful government regulations, I expect the insurance company lobby and spin machine to shift into full gear. I only hope – trust – that the Canadian media will not “fall for” the spin Wendell Potter describes in his book, Deadly Spin.


There is nothing so dangerous as ignorance in action. – Goethe

If financial advisers and brokers are uninformed or misinformed by erroneous reporting about life settlements they cannot best serve their customers. And although they may not be engaging in what Ms. Eng called “shark activity,” or what Ms. Harman called being “on the wrong side of the rules,” they are still complicit through ignorance.


A well informed adviser should start with an understanding beyond a myopic Canadian market view, one that investigates the real value of life settlements, and how it is bettering the lives of seniors in the United States, Europe and globally. That responsibility rests with the industry professionals, many of whom are members of Advoics and yet, Advocis seems to be ignoring the veracity of life settlements and the benefits available to their members and Canadian seniors.


From CNN, Fox and NBC to Investment Executive and industry newsletters, responsibility is lost in the tumultuous news cycle.

From CNN, Fox and NBC to Investment Executive and industry newsletters, responsibility is lost in the tumultuous news cycle.

The buck stops where?

Obviously, each financial adviser is responsible for his or her expertise but if they are unaware of the full story or get superficial information, then the burden of responsibility shifts to the “messengers,” which, in most cases, are the associations (Advocis, CARP, CLHIA, et al). But the public media also have a role. If the messengers provide only half the story or distort the facts or spin the information, then they are abdicating their responsibility to deliver a fair and balanced perspective to the public, their customers.


In the hurry-up culture of today’s media, vigilance and in depth reporting has been abandoned. Most of the news is bleached of substance in the 24/7 digital world of CNN, Fox, Twitter and You Tube. The media are caught in the crush and depend too much on the false information spewed out by the insurance PR machines. But somewhere in the pell-mell rush to deadlines there must be – needs to be – some responsible, in depth, principled, investigative journalism.


Postscript, January 26, 2015

Subsequent to the October Investment Executive article by Ms. Harman, I met with the publisher, Ms. Ozy Camacho and was invited to write a column regarding life settlements, which I have done. The first column will appear in February.