FSCO Submission

LISAC-FSCO Subm cvr2

LISAC has prepared a submission to the Ontario Ministry of Finance’s “Expert Advisory Panel” regarding the Panel’s review of the mandate of the Financial Services Commission of Ontario (FSCO), the agency responsible for the Ontario Insurance Act.

LISAC’s submission advocates on behalf of Ontario seniors and the need for a well-regulated life settlement industry. It addresses the inefficacy and inaction of FSCO over the past 15 years in not fulfilling its mandate to promulgate the repeal of Section 115 of the Ontario Insurance Act.


Strange politics in an election year

BraidMeet the Chair of the Conservative Party’s insurance caucus, Peter Braid

Perhaps the constituents of MP, Peter Braid (Kitchener-Waterloo) can be more successful than I have been in opening up a conversation with him. Over the last couple of months I’ve sent several communications to Mr. Braid (see last email below) and as of yet, no response. That’s strange in an election year. And what’s even stranger is the fact that Mr. Braid is head of the Conservative’s insurance caucus and I have attempted to communicate with him on an important life insurance issue, not to mention that I have been affiliated with the life insurance industry for more than fifty years.


I am not sure if it is lack of respect or a lack of political savvy. Either way, I don’t think Mr. Braid is familiar with the axiom espoused by the late Tip O’Neill, US Speaker of the House, who said, “All politics is local.” In other words, politicians need to pay attention to what the voters are asking. And I have been asking Mr. Braid some tough questions – on behalf of his voters – regarding life settlements and the opportunity that they can provide in helping seniors with their financial difficulties. He might be able to ignore me, but he ignores the needs of seniors at his peril.


harper“Give people options … voluntary choices”

It appears as if Mr. Braid is not only ignoring his constituents on this issue but also the thinking and counsel of his boss, Prime Minister Harper. Harper, in a post-budget comment said, “Our government does not believe in forcing Canadians into a single, compulsory one-size-fits-all approach. That’s why we give people options, voluntary choices to help us save …. What we will not suggest is raising taxes on workers that they don’t want to pay and claiming it is, quote, for their own good, and then hitting small businesses with tax hikes that small business cannot afford to pay.” That’s a pretty clear direction: “… give people options” and “voluntary choices’ that do not cause “tax hikes.”


Well, that’s exactly what I want to discuss with Mr. Braid – how life settlements can offer seniors a valid option for accessing greater value in their policies if and when they need it rather than relying on taxpayer money. But his lack of response suggests that “options,” “voluntary choices” and open discussion are not his idea of collaboration.


MulroneyTo lead or avoid change?

Perhaps Mr. Braid might consider the words that former Conservative Prime Minster, Brian Mulroney wrote this week (May 4, 2015) in a Globe and Mail article. Mulroney, speaking of leaders, said, “they must be ready to endure the attacks that often accompany profound or controversial change, while they await the distant and compelling sounds of a verdict that only history and a more reflective nation can render in the fullness of time.” Will Mr. Braid choose to lead or avoid?


In Mr. Braid’s own words

On November 18, 2014, Mr. Braid introduced Donald Gulioen, CEO Manulife and Chair of the Canadian Life and Health Insurance Association (CLHIA), at an industry “Advocacy Day” in Ottawa as they celebrated the industry’s accomplishments (see previous blog below).


I was encouraged by Mr. Braid’s words when he said, “My community has deep roots in the insurance industry and I also have worked in the sector … so I have a good understanding of the important role that insurance companies play in providing security for Canadians and strengthening our national economy.” He added that the industry was “committed to enhancing the well being of families and communities across our great country. Today’s Advocacy Day provides an excellent opportunity to further collaborate on our shared goals.”  Based on his views, I decided to open up a dialogue with Mr. Braid.


“Keep your friends close, but your enemies closer.” – Sun Tzu (and Michael Corleone, Godfather Part II)

Michael Corleone

Michael Corleone

Friends or enemies?

It has been several months and nothing from Mr. Braid and yet, when it comes to the best interests of seniors, I assume Mr. Braid and I are on the same side. My goal is to advocate for doing what is best for seniors but I have no idea what Mr. Braid’s ideas might be concerning the “well being” of more than a million Canadian seniors in need. What I do know, from evidence around the world, is that life settlements are of significant financial benefit to seniors.


I sent him a copy of my book, Why Are Seniors Worth More Dead Than Alive? and other documentation regarding seniors’ financial plight and the potential of life settlements, so I know he has lots of information for a dialogue. But guess what? As I continue to distribute information via my blog, Mr. Braid has “unsubscribed.” Obviously, his concept of collaboration is different than mine, and I’ll bet different from what voters consider collaboration.


I expected Mr. Braid, Chair of his Party’s insurance caucus, to lead an in depth discussion on the merits of life settlements, not opt to avoid my questions. However, I suspect he thinks life settlements are a “controversial change” and that if he was to engage in a conversation, he might, as Brian Mulroney says, have to “endure the attacks” of his friends and supporters in the life insurance industry. That’s unfortunate – for his constituents and Canadian seniors everywhere.



 My latest email to Mr. Braid

Mr. Braid, during the past few months I have delivered to you well researched evidence of an egregious disservice being perpetrated on millions of Canadian seniors, (read voters). You have not only ignored my material but elected to unsubscribe to further information. I shall continue to advocate for these seniors, most of who desperately need these funds to improve quality of life and perhaps remove many from government subsidies.  A number of years ago, Tory MP Frank Sheehan, Chair of a legislative committee appointed to look at the matter, when questioned by noted columnist James Daw as to why nothing has happened on this subject responded, “The government’s legislative agenda is too busy. We just can’t free up the market without giving thought to the potential for abuse.” Fair enough!


Do you not think that more than 15 years is enough time for your party Mr. Braid?  Who are we considering here, seniors or life insurance companies?


That is the question I will be asking the numerous seniors groups, (voters?) inviting me to appear before their various chapters during the coming months.


I shall be pleased to discuss with you!

Outliving your money and government inertia

A grave secret: Life settlements were recommended by the Ontario Government 15 years ago – and they’re still a dead issue


Some gravestones are so old you can no longer read the inscription and yet, they stand as sentinels of history, so we don’t forget. Unfortunately, we have no such markers for government inactivity – of promises made, promises forgotten.


1994, 1995, 1997, 2000: The forgotten years for two million Ontario seniors


These years are when documented promises where made to our aging population and yet, inexplicably, “somebody” forgot to do anything about those promises. Was it a lack of political will? Or civil service incompetence? Either way, instead of having a viable and well-regulated life settlement industry in Ontario today (and Canada), we have a graveyard of empty promises buried under bureaucracy, incompetence and perhaps malfeasance.


A little background

Life settlements are some times referred to as viaticals and many people use the term interchangeabley, but they are, in fact, different. However, they have a common purpose: Allowing people who own life insurance to access the value in their policy before they die. And with life settlements that value is almost always more than the cash surrender value offered by the life insurance company.

  1. In the case of viaticals, they originated in the 1980s during the HIV epidemic and were transacted so that policy owners who were terminally ill could access much needed money in their policy, often to help pay medical expenses.
  2. Life settlements grew out of the realization that there was an inherent benefit for owners of life insurance if they could access the maximum value in their policy if they needed money before they died. It made sense to have a means to access the hard earned savings they had sunk into their policy and receive fair market value for their asset.
  3. Over the past two decades the value of life settlements to policy owners has proven invaluable, around the world. Today, in the United States alone, life settlements are estimated to pay out $140 billion in 2015, in a well-regulated secondary market. But not in Canada.


The evidence is in

elderl-paperThere is no shortage of documentation to show that the Mike Harris Conservative Government accepted the merits of a well-regulated life settlement industry (called viatical settlements at the time) and recommended going forward.

I haven’t spoken to Mike Harris but I am sure he meant, on behalf of Ontarian seniors, going forward before 2015.

Here’s some of the documentation:

  • 1994:  A reporter, James Daw,* wrote about activity as far back as 1994 and said, “Ontario suggested ‘that insurers make available at least half the face value of most policies at ‘reasonable interest’ when life expectancy is two years or less.” And yet, in the same article, Tory MPP, Frank Sheehan, who chaired a committee on this issue, said, “the government’s legislative agenda is too busy. We can’t just free (the market) up without giving thought to the potential abuse.” Surely 20 years is enough time to think about it?  *On March 3, 2015, Finance Minister Charles Sousa announced a panel of experts to review the Financial Services Commission of Ontario’s (FSCO) mandate and James Daw was named as a member of that panel. Let’s hope he is now well aware of the irresponsible, insidious delays and that he demands that the offensive sabotaging of government process is rectified. The intent of the government is obvious and the saboteurs are just as obvious (see year 2000 below).
  • 1995: An exemption to section 115 of the Insurance Act was applied for but did not succeed; however, the committee recommended that the Ministry of Finance look further into changing the Insurance Act. Nobody looked and nothing changed.
  • 1997: Living Benefits and Viatical Settlements in Ontario is a feasibility report of April, 1997, which recommended, in part, that the government: “Permit, and establish regulations for, viatical settlements in Ontario. It further stated: Recent experience in the US shows that viatical settlement companies, when appropriately regulated, can act in the consumer interest and provide a valuable service, filling any gaps left by insurance company programs. Problems arise when, as in Ontario now, viatical settlement companies operate from outside the jurisdiction without regulation.” The government intent is clear.
  • 2000: Bill 119 of the “Red Tape Reduction Act of 2000, Schedule G: Schedule G (if you can find it. It’s a little blurb in the midst of hundreds of pages) sets out a mechanism whereby a viatical industry in Ontario would be made legal if a licensing scheme is first put in place by the Ministry of Finance. Other documentation states, in part: “The Commission has been asked to recommend repeal of section 115 of the Insurance Act in order to allow a viatical industry to be established in Ontario … (and) recommends the Commission supports establishing the viatical industry in Ontario … and the Ministry of Finance should develop options to allow this industry to operate in Ontario.” On Dec. 5, 2000, Bill 119 passed by a vote of 46 to 38. That said, Schedule G of Bill 119 was not proclaimed and has not come into effect. It was decided to recommend to the Minister of Finance that the new provisions (Schedule G) not be proclaimed until the insurance industry was given a chance to examine and comment on the regulations that would govern the licensing of the new viatical industry. Mark Daniels of the Canadian Life and Health Insurance Association (CLHIA) indicated that it was expected that, prior to proclamation, the draft regulations concerning how viatical settlement companies will be licensed and regulated will be distributed to the insurance industry for comment. That was almost 15 years ago. So much for good intentions when they get buried in a bad process.


It is the responsibility of the Financial Services Commission of Ontario (FSCO), under the Ministry of Finance, to oversee and act on anything related to life insurance, but FSCO appears to be a quicksand of incompetence and a massive bottleneck that is blocking the improvement of Ontario seniors’ financial well being.


Seniors, here lies your money – stuck in a hen house influenced by insurance companies

fox-salesSomebody in the FSCO hen house is selling somebody a “bill of goods” that is not good for seniors. And it’s got something to do with the foxes – in this case, the insurance companies and their lobby. Because someone in the “hen house” has been sitting on what could be a golden egg for seniors for 15 years. FSCO has not yet done the right thing and the likely excuse will probably be related to the insurance industry not yet having provided “comments” on the government recommendations and intentions in 2000. Or some other irrational excuse.


Where’s the evidence?

It’s buried in the fine print. Schedule G represents typical legislative fine print and it seems as if only the committee and the CLHIA were aware of it. Also, the only delegation to the committee was made by Mark Daniels of CLHIA. That’s a little one sided. Who was advocating for seniors? Why was the Canadian Association of Retired People (CARP) not there? Why were representatives of Canada’s financial planners (Advocis) not looking out for the best interests of their customers, seniors? It was a stacked deck and there was no serious interest in furthering a life settlement industry that could significantly assist financially struggling seniors and would move money from insurance company balance sheets into seniors’ bank accounts. That is the crux of the issue.

Why else would FSCO take no action in 15 years? From an Ontario seniors’ perspective that is beyond incompetence and knee-deep in malfeasance.


2014 Auditor General’s Report

Bonnie Lysyk, Ontario Auditor General

Bonnie Lysyk, Auditor General of Ontario, Sept. 2013

In 2014, the Ontario Auditor General’s report (Chapter 3, Section 3.03), strongly criticized FSCO’s performance and addressed their lack of oversight, supervision and control of its own hen house. And yet, there is no mention of section 115 of the Insurance Act. It would appear that the oversight of the overseers remains an egregious lack of foresight for the financial needs of seniors, despite the fact that government has been trying for two decades to do something. The question is: Are the inmates running the hen house or is it their “friends” the foxes?


In the Auditor General’s report it is suggested that the insurance industry might consider some form of self-regulation because FSCO is perhaps too bureaucratic – ya’ think?. And get this. The self-regulating organization (SRO) would be overseen by FSCO, which, in turn, would be overseen by the Auditor General. And guess who might be a potential SRO? Advocis, the Financial Planning Association of Canada, an association directly tied to insurance companies. So the foxes not only get to stay in the hen house, they get to self-regulate it. Geez, perhaps we should rename it, FIASCO.



LISAC logo stack-smallest copyEnough! The lack of advocacy for seniors on this most important financial issue is blatantly obvious. We don’t need anymore evidence to demonstrate that the current batch of self-proclaimed advocacy groups – CARP, Advocis, CLHIA – have little to no interest in discussing, analyzing or “commenting” on the potential benefits of life settlements for seniors, even in the face of the good intentions of successive governments (Conservative and Liberal). I’ve said it before, and I’ll say it again, it is shameful. The opposite of a fair and just society.


The Life Settlement Association of Canada (LISAC) has been established to advocate on behalf of Canadian seniors on this issue, but we also need political will within government – advocates – who will override FSCO and its lobbyists and stop the perversion of the process, and justice. It requires strong voices at the Ministry of Finance, the Ministry Responsible for Seniors Affairs, the Ministry of Health and the Auditor General of Ontario.


After two decades, the time is now!


The elephant in the room for Canadian seniors …



 Why is no one talking about a great source of cash for seniors – life settlements?

Over 600,000 Canadian seniors are living in poverty. Another 600,000 are still in the workforce. Many more are struggling financially. And the government and advocacy groups like the Canadian Association of Retired People (CARP) seem to be scrambling to help them. And yet, no one is talking about an asset class that belongs to millions of seniors who own a life insurance policy – life settlements.


elephant-cartoonFour times the cash value

For those of you who are not aware of the elephant in the room – life settlements – let me briefly explain.


A life settlement pertains to the sale of an unneeded in force life insurance policy for an amount that is more than the policy’s cash surrender value but less than its death benefit. A study by the London Business School of over 9,000 life insurance policies that had been transacted as life settlements showed that, on average, those polices received more than four times the cash value that they would have received as cash surrender value from the insurance companies. And, of course, many term policies would have received nothing.


The elephant

The problem is that life settlements are not available to Canadian seniors. And that’s an egregious oversight by governments and advocacy groups.


Oliver-1Pre-election budget to benefit seniors

Worse, no one is talking to seniors about the financial upside that life settlements could offer them. In an April 17, 2015 Globe and Mail article by Bill Curry, Pre-election budget to benefit seniors, including relaxation of RRIF rules, there is a lot of talk and hope about new budget measures – and that is good – but it is obvious that life settlements are not part of the conversation – yet.



In a word, ignorance. Governments are either uninformed or misinformed and abdicating their responsibility to seniors. And advocacy groups like CARP and the Financial Planners Association of Canada (Advocis) are not acting in the best interests of their members by ignoring the benefits life settlements can offer seniors.


Where do senior elephants go for honesty?

Why are we keeping seniors in the dark?


Where do seniors go for honesty?

Seniors are kept in the dark, having no idea what life settlements are about or how they could benefit from them. And the insurance companies intend to keep it that way as long as possible.


Don’t get me wrong. Life insurance and life insurance companies are very important to over 21 million Canadians and I have been proudly affiliated with the industry for over fifty years. Life insurance companies provide a valuable service and do many good things – except on this issue of life settlements. On this, they are failing their customers. They are serving their own self-interests, not those of their customers, their representatives (financial planners and brokers), their shareholders or their country.


If seniors have heard anything about life settlements from their insurer or financial planner or broker it is probably erroneous and misleading information about how life settlements are a “serious risk” (see CLHIA lawyer letter below and my response). That is nothing but propaganda and spin. It only benefits the insurance companies and deprives policy owners of their right to receive fair market value for an asset they own – their life insurance policy. I have covered all the fundamentals about this in my book, Why Are Canadian Seniors Worth More Dead Than Alive?, and numerous blogs and media coverage (see Media).


globeandmail-logoThe media?

The Canadian media have ignored this issue for years. They too are either ignorant of the facts or uninspired to dig into them. This is an example of where a little investigative journalism is needed. Or as Pulitzer-Prize journalist, Seymour Hersh says, “Our job is to find out for ourselves, our job is to go beyond the debate and find out who’s right and whose wrong about issues. That doesn’t happen enough.” And I, as an advocate for Canadian seniors, say that there’s no debate in the media about life settlements. It is not happening and yet, it would go a long way in serving the public interest, especially millions of seniors in need of financial help, now, not after they’re dead.


Around the world, well-regulated life settlement industries are providing billions of dollars to seniors, which in turn streams money into the economy and relieves the cost of government programs. As I have said before, it is a win-win-win.


Instead, it remains the elephant in the room for Canadian seniors.


BraidOpportunity – it’s election time

We all know that the one time elected officials pay extra attention is during election campaigns so now is the time to bring out the elephant. And seniors can bring a large elephant to the ballot box. As Bill Curry points out, 75 per cent of voters aged 65 to 74 cast ballots in the 2011 election.

It’s time to ask every candidate, and every MPP – election or no election – where they stand on life settlements. And politicians like Peter Braid, MP in the Kitchener-Waterloo riding where many insurance companies reside, should have answers. He used to be in the insurance business and is head of the Conservative’s insurance caucus. I intend to see him at some all-candidates meetings because he has yet to respond to any of my correspondence and questions. Also, he “unsubscribed” from this blog, which I expect will mean he remains uninformed about how life settlements could help his senior constituents.



Of course CARP advocates for seniors and their VP for advocacy, Susan Eng is out front talking to government officials and the media about all they are doing for Canada’s aging-population. According to Bill Curry’s report, Ms. Eng said her preference would be to get rid of the RRIF rules altogether, but a softening of the withdrawal rates would be an improvement over the status quo.


Question for Ms. Eng

I ask Ms. Eng, again: Why are you not advocating “to get rid of” the insidious regulations in provincial legislation that prevent seniors from accessing the fair market value for an asset they already own. And the recent Ontario election would have been a great opportunity to address this issue because Premier Wynne has said the financial problems for seniors is becoming a huge economic burden. But nothing on life settlements from CARP. Ms. Eng is quoted in the article:

“Seniors are really clear-headed about this now (RIFFs). It used be you could say the word ‘seniors’ in your announcement and they’re all for you … There’s going to be no chance you can get away with just saying: ‘We love seniors.'”

This raises a similar question: Why does CARP’s advocacy not include pursuing changes in the regulations so seniors could receive increased cash value  through life settlements? Perhaps Ms. Eng thinks she can “get away with just saying: ‘We love seniors'” and ignore the elephant in the room.


Seniors need to take this issue to their CARP membership meetings, and the ballot box, even if their advocates won’t.

Crossing the street is a risk


 Is the Canadian Life and Health Insurance Association uncomfortable with risk?

The Canadian Life and Health Insurance Association

The Canadian Life and Health Insurance Association

In a reply to my January letter to Donald Gulioen, Chair of CLHIA, their lawyer, Mr. Zinatelli  stated, “There are serious risks associated with life settlements …” (see March 20, 2015 post below). This seems to me just a way of avoiding my questions.

So I have sent another letter to Mr. Zinatelli (see below) in an effort to open up a well-reasoned conversation with CLHIA. I have questions, they – supposedly – have answers. I am proposing that we meet and have a full and honest discussion about life settlements and what they mean to seniors around the world and could mean to Canada’s aging population.

The life insurance industry is all about risk so I assume the CLHIA has an abundance of evidence to support Mr. Zinatelli’s claim that life settlements are a “serious risk,” and that they can compare such risk to the risk in sectors such as medical, financial, pharmaceutical and technology.

Crossing the street is a risk but we do it all the time. We put in place the proper rules, regulations and protections to mitigate the risk. So for CLHIA to simply claim that life settlements are a serious risk without supporting evidence and cross-industry comparisons is a vacuous statement aimed at avoidance.

Survival by taxpayer bailout

Survival by taxpayer bailout

Avoidance is a cover

When an industry or business avoids tough questions you can be sure they’re avoiding change. Or worse, covering something up. It’s axiomatic that asking the right questions uncovers old baggage and fosters new ideas and drives innovation and change. Most businesses know they must change to grow and survive. But not all – Arthur Anderson, Enron, Worldcom, Lehman Brothers, Target, et al. Of course some, like AIG, avoid answering to anyone because they are “too big to fail.”

So where are the answers – for Canadian seniors?

On behalf of the Life Settlement Association of Canada (LISAC), I am advocating for Canadian seniors and the questions I pose deserve answers not only for seniors but for all Canadians who own, or will buy, life insurance.


Although Messers Gulioen and Zinatelli have not yet answered my questions, Mr. Zinatelli did pick up on my suggestion to Mr. Gullioen that I would “welcome” a discussion on these important matters. So I propose that we do exactly that.


Let’s begin the conversation

Through Mr. Zinatelli, I request that the CLHIA and the Life Settlement Association of Canada (LISAC), which I represent, meet and begin an open dialogue about the merits of changing provincial legislation so that a well-regulated life settlement industry can be established and offer a valid, financial alternative for Canadian seniors.


I sent this email to Mr. Zinatelli on April 13, 2015 and I await his reply.

Mr. Zinatelli,

I must confess that both the brevity of your response and comments on behalf of Mr Gulioen do not surprise me. As I mentioned in my blog of March 20, 2015 (http://hereliesyourmoney.com/blog/ ), the CLHIA “ducked my questions.” Of all my questions, you answered none.
You said in your letter, “There are serious risks associated with life settlements.” Well that just raises more questions. What risks? Can you be specific? Can you 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 are mitigated by well-regulated industries.

Also, let me be clear. I do not suggest that life settlements be “promoted” in Canada (your word), rather that life settlements through a well-regulated, secondary market be an option provided to Canadians, just as they are in other jurisdictions around the world.

As per your suggestion, I would welcome, at a mutually convenient time and date, a full and open discussion on these matters that are, indeed, most important to Canadians.

I look forward to hearing from you.

Yours truly,


Leonard H. Goodman

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: info@hereliesyourmoney.com and we’ll send you a copy.

An open letter to Donald A. Guloien

Chair, Canadian Life and Health Insurance Association and President and Chief Executive Officer, Manulife Financial Corporation   photo courtesy: 123.ca

Donald A. Guloien is Chair, Canadian Life and Health Insurance Association and President and Chief Executive Officer, Manulife Financial Corporation (photo: 123people.ca)

I recently read the transcript of a speech by Don Guloien delivered at the Canadian Life and Health Insurance Association’s “Advocacy Day,” on November 18, 2014, in Ottawa. The theme of the meeting was, “Investing in Canada’s Health and Prosperity.” In keeping with that theme, I posed several questions in a letter to Mr. Guloien.  I raised the following questions based on direct excerpts from the speech. I have also posted the full transcript of Mr. Guloien’s speech at the end of this blog.


My open letter:

I read with interest your speech at the Canadian Life and Health Insurance Association’s “Advocacy Day,” and following from the theme of the meeting, “Investing in Canada’s Health and Prosperity,” I would like to address a few questions.

My wish is to open a dialogue with you and the CLHIA – as I have with a number of elected and government officials – regarding what I consider a critical issue for Canadians and the burgeoning cost of health care, pensions and retirement support for our aging population.


You state:
“We’re deeply involved in … and committed to … the health care and financial well-being of Canadians, and Canada’s economy.”

If this is true, why do life insurance companies in Canada continue to oppose the implementation of a well regulated and fiscally controlled life settlements industry in Canada? Particularly when life settlements are a well regulated industry that helps millions of citizens in the United States and other countries around the world.


You state:
“From our vantage point, it is evident that Canada’s social programs, such as pension plans and universal health care, are under enormous pressure.

“The life and health insurance industry has the capacity and the expertise to be a strong partner with government and other stakeholders to explore new ways of providing and financing these critical programs. Programs that help make Canada such a compassionate and wonderful place to live.”

Comment: This is an excellent principle, one that is being followed in the United States. For example, in Texas there are bills such as the first Medicaid life settlement law, which allow for proceeds of a life settlement to help fund long-term healthcare needs without barring individuals from enrolling in Medicaid. This helps take the burden off of government funded programs.

Do you not consider Canadian seniors who are struggling financially, and who own life insurance policies, to be “stakeholders” who need the industry “to explore new ways of providing” help?  And if laws in the USA allow for proceeds from life settlements to help long-term healthcare needs then why not in Canada?


You state:
“We are blessed in Canada with a strong, principles-based regulator in the Office of the Superintendent of Financial Institutions. Canada is well respected in international financial circles and is playing a leadership role in developing sensible regulation. As international financial regulators contemplate new rules governing areas such as capital and accounting, Canada must continue to be at the forefront.”

Comment: Regarding “regulators contemplating new rules,” Canada is not at the forefront in key areas that can financially benefit seniors rather we are trailing the rest of the world by a wide margin.

Why would the life insurance industry not support “a strong, principles-based regulator … playing a leadership role in developing sensible regulation …” that would allow Canadian seniors to access their life insurance asset through a life settlement?


You state:
“Our industry is a participant in public infrastructure and has the ability to do more. We have the funds to invest here at home and we are interested in increasing our stake substantially in this important sector. But our involvement in these projects has to make good business sense.”

Does “good business sense” preclude good social sense? To your earlier point regarding “Canada’s economy,” does not the financial well being of a growing senior population have serious, government cost implications that can be eased through public-private efforts like life settlements? (See Texas example referred to above).


Near the end of your speech you state:
“Our industry has the capacity and expertise to play an important role in these areas. In partnership with governments and businesses, we can contribute to effective long-term solutions.”

Why do you not consider well regulated life settlements as a valid, practical and beneficial way of helping Canadians in retirement; thereby, alleviating dependency on social welfare programs?


You state:
As one of three key points near the end you say: “We can and want to do more to help Canadians save for retirement.”

Why not assist Canada’s aging population to access what is recognized in most jurisdictions as the accepted, fair market value of their life insurance policies by way of a well regulated, life settlement industry?


It is respectfully hoped that you will accept these comments in a constructive and well-intentioned manner.


I take the liberty of enclosing a copy of my recently published book, Why Are Canadian Seniors Worth More Dead Than Alive? which addresses the subject of life settlements – as does my website www.hereliesyourmoney.com. I trust you will find them of interest.

Indeed, I would welcome an opportunity to have further discussions with you on these matters that are so important to Canadians.


Yours truly,

Leonard H. Goodman


Transcript of Mr Guloien’s speech

(see link to CLHIA site and a 17 minute video of the speech)



Innovation and Collaboration: The future direction
of Canada’s life and health insurance industry

Remarks by
Donald A. Guloien

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

November 18, 2014
Fairmont Château Laurier
Ottawa, Ontario

Thank you for your kind introduction, Peter [Braid].
Honourable Members of Parliament, Minister Holder and distinguished guests, I want to welcome everyone on behalf of the Canadian Life and Health Insurance Association. We are delighted that you could join us this morning.

Over the years, our industry’s Advocacy Day has become a highlight of our ongoing dialogue with federal policymakers. CEOs from several CLHIA member companies are here today as part of the 5th Annual Advocacy Day:

    • Yvon Charest, President and CEO of Industrial Alliance
    • Kevin Dougherty, President of Sun Life Canada
    • Douglas Baker, President and CEO, Teachers Life
    • Doug Brooks, President and CEO, Transamerica Life Canada
    • Rino D’Onofrio, President and CEO, RBC Insurance
    • Dave Johnston, President and COO, Great-West Life/London Life/Canada Life
    • And Alka Guatam, COO and CFO, RGA Canada

This year’s theme is Investing in Canada’s Health and Prosperity.

We will be talking with Parliamentarians and officials about what we see as the challenges facing Canada and Canadians in areas such as:

    • saving for retirement
    • health care, and
    • funding and sustaining the public infrastructure that will ensure Canada’s future development.

The life and health insurance industry is involved in all these areas. We believe we are making a significant contribution toward finding solutions to these challenges. But more can and needs to be done.

How our country addresses these challenges will help determine Canada’s continued success.

That’s why we are taking an active role in public policy discussions on these issues … and that is why we are here today.

Although our roots are in life insurance, innovation is very much part of our industry’s DNA. As a result, we have been successful in adapting to the changing financial landscape, both at home and abroad.

Today, Canada’s life and health insurers:

    • provide financial security and supplementary health care products to more than 28 million Canadians,
    • manage about two-thirds of Canada’s private retirement savings plans,
    • pay out over $1.5 billion in benefits to Canadians … every single week, and
    • employ more than 150,000 Canadians, including close to 97,000 agents and advisors.

The industry is also:

    • one of the largest investors in the Canadian economy, with $650 billion in domestic assets, and
    • active in over 20 countries worldwide, where we hold assets of another $658 billion.

We’re deeply involved in … and committed to … the health care and financial well-being of Canadians, and Canada’s economy.

From our vantage point, it is evident that Canada’s social programs, such as pension plans and universal health care, are under enormous pressure.

Canadians … from all walks of life …. are rightly concerned about the future well-being of these programs.

The life and health insurance industry has the capacity and the expertise to be a strong partner with government and other stakeholders to explore new ways of providing and financing these critical programs. Programs that help make Canada such a compassionate and wonderful place to live.

The life and health insurance industry already plays a role in two important areas that touch the lives of millions of Canadians:

  • The first is workplace retirement savings plans. These include:

– defined-contribution pensions,
– group RRSPs, and
– Pooled Registered Pension Plans, or PRPPs, that will increase access to workplace retirement plans for millions of working Canadians.
– Overall, our industry administers over 70% of all pension plans and over 90% of group RRSPs.

  • The second area is workplace health benefit plans. These help employees and their families with medical costs not covered by provincial plans. They include:

– dental care
– vision care, and
– prescription drugs

For many businesses, extended health benefit plans are effective tools to attract and retain high-quality employees.

Yet employers who offer fully insured benefit plans may face some difficult decisions. For instance, one of their employees could be diagnosed with a rare disease requiring a drug treatment costing thousands per month. This alone could make an employer’s health benefit coverage unaffordable, and that may force them to reduce or completely drop drug coverage.

To help these employers hold on to their plans … especially small- and medium-size businesses … our industry took action. On January 1st last year, all life and health insurers worked together to launch the Canadian Drug Insurance Pooling Corporation.

Through this pooling arrangement, participating insurers share the costs of very expensive and recurring drug treatment claims. This innovative approach is keeping plan costs affordable for employers. At the same time, it shelters their employees from the full financial burden of the prescription drug treatments they may require.
In 2013, the new pooling mechanism paid more than 4,000 prescription drug claims of over $25,000. Several individual claims exceeded $500,000. One was over $1.2-million.

Another area where we see a much greater role for our industry is ensuring Canada has the public infrastructure in place so Canadians can continue to enjoy a high performing economy and a high standard of living. I’m talking about infrastructure such as:

    • hospitals,
    • transportation networks,
    • bridges
    • schools, and
    • green energy

Canada, like so many other countries, has financial challenges when developing and maintaining public infrastructure projects. In fact, estimates suggest we currently have an infrastructure deficit of more than $350 billion.

This infrastructure deficit must be addressed if Canada is to realize its full growth potential in the coming decades.

Sustained long-term growth needs predictable long-term investment. The long-term nature of the insurance business is well suited to this type of investing as our obligations to policyholders often span several decades.

The importance of encouraging long-term investment in public infrastructure has also been recognized internationally by the G20 and the OECD.
The G20 Finance Ministers called for the creation of a Global Infrastructure Initiative to increase quality investment, especially in infrastructure. The CLHIA strongly supports this international initiative and Canada’s role in it.

These countries, Canada among them, are looking closely at how they can encourage Public Private Partnerships, or P3s, and better ways to engage the private sector in these projects.

P3s, for their part, have been effective in delivering infrastructure projects on time and within budget.

The Canadian government has played a very proactive role in promoting P3s across Canada through the creation and funding of a Crown Corporation called P3 Canada. We applaud the government for this, but believe more can be done.

Our industry is a participant in public infrastructure and has the ability to do more. We have the funds to invest here at home and we are interested in increasing our stake substantially in this important sector. But our involvement in these projects has to make good business sense.

We invest in infrastructure to support our liabilities on long-term products. Therefore, we should ensure that changes to financial and capital standards do not constrain our ability to offer long-term products, as otherwise our need for infrastructure investments could see a dramatic decrease.

We must continue to ensure that accounting and capital rules do not penalize investments in infrastructure assets that typically provide stable cash flows to support our liabilities.

In such projects, as in all our activities, the future direction of Canada’s life and health insurance industry will depend in no small measure on the regulatory environment in which we operate.

As financial institutions emerged from the 2008-2009 financial crisis, there’s been an unprecedented leap in the level of regulation.

We understand … and fully support … the role of regulators in protecting the public interest and ensuring the conditions that led to the financial crisis do not occur again.

We are blessed in Canada with a strong, principles-based regulator in the Office of the Superintendent of Financial Institutions. Canada is well respected in international financial circles and is playing a leadership role in developing sensible regulation. As international financial regulators contemplate new rules governing areas such as capital and accounting, Canada must continue to be at the forefront.

Our industry requires a regulatory environment that does not substantially increase the cost of financial services to Canadians or stifle innovation, growth and competitiveness.

Canada has a very bright future. And it boasts a vibrant life and health insurance sector that remains at the economic forefront internationally and domestically.

Our industry will continue to innovate by building on the solid foundation we have developed over more than 150 years.

1) We can and want to do more to help Canadians save for retirement.
2) We can and want to help sustain Canada’s healthcare system.
3) We can and want to invest more in public infrastructure at home.

Our industry has the capacity and expertise to play an important role in these areas. In partnership with governments and businesses, we can contribute to effective long-term solutions.

We look forward to continue working on these with governments and other organizations, such as those represented in this room.

I am confident that, together, we can create the innovative solutions essential to making Canada even more healthy and prosperous.

Thank you.

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.