Simplifying and Recalibrating Assuris’ Funding Tools Enhances Policyholder Protection
Through proposed amendments set to be incorporated to its By-Law in 2026, Assuris is looking to modernize the specific and loan assessment funding tools. These are tools that Assuris can use to fund a transfer of policies from an insolvent life and health insurer to a solvent one, ensuring Canadian policyholders are protected in the process.
As the lead authority in resolution of Canadian life and health insurers and the resolution expert, Assuris is constantly adapting and future-proofing our funding system to be prepared to resolve any life and health insurer failure. Assuris also regularly assesses the adequacy of our resolution funding, compares it to international best practices, and makes recommendations that make sense for the Canadian industry.
Simplifying and recalibrating the specific and loan assessment funding tools will provide a timely and adequate access to the funding needed to resolve a life and health insurer failure and enhance the protection of policyholders. Updating the funding tools will strengthen confidence in Assuris’ private funding model – with no reliance on tax-payer money, while providing appropriate guardrails to prevent the risk of undue contagion for the industry.
Simplifying the Specific and Loan Assessment Funding Tools
The specific and loan assessments are Assuris’ main funding tools to address most failures. They represent the industry funding Assuris can access to meet the liquidity needs in a failure. Assuris, the life and health insurance industry, Regulators and Government recognize the importance of a timely access to funding in preventing the erosion of consumer confidence in Canadian financial services, particularly in the early days of an insurer insolvency.
Rather than having to combine the specific and loan assessments to access the funding needed in a failure as it is the case currently, Assuris is proposing to increase the maximum specific assessment for it alone to meet permanent funding needs. Assuris would deploy the loan assessment for temporary funding needs only, have the flexibility to assess only a subset of member companies while retaining the obligation to assess all member companies if that funding need became permanent. While not altering the current financial impacts on the industry, these simplification changes will make the specific and loan assessments more effective, practical and straightforward to administer
Recalibrating the Specific and Loan Assessment Funding Tools
The life and health insurance industry has enjoyed significant growth over the past few years. To keep pace with the growth in benefits and coverage to Canadians, Assuris has increased its levels of protection with the support of the industry and Regulators in 2023.
To ensure Assuris’ funding tools evolve alongside potential funding needs associated with Canadians’ higher levels of benefits and coverage, Assuris is working with the industry to recalibrate its funding tools by increasing the funding Assuris can access to meet liquidity needs in a failure.
Industry guardrails will ensure that recalibrating specific and loan assessments does not undermine the financial health of the industry. Although comparable to the current guardrails, they will shift from an annual maximum to a timeframe-based limit, which will confer Assuris greater flexibility in addressing funding needs, safeguard the resiliency of the industry and preserve consumer confidence in Canadian financial services.
Assuris is advancing its industry and regulatory consultation to ensure a successful implementation of the proposed By-law amendments in 2026.
About Assuris
Founded in 1990, Assuris is the lead authority in the resolution of Canadian life and health insurers and the guarantee association that protects Canadian policyholders if their life and health insurance company fails. It is independent in the public interest, enforces strict conflict of interest rules for its employees and directors, and works in partnership with prudential supervisors in the early stages of intervention. In addition, Assuris plays a significant role in the court-based insolvency process by working closely with liquidators, officers of the court and international resolution counterparts.
Assuris is designated by the federal Minister of Finance under the Insurance Companies Act of Canada, recognized by the Autorité des marchés financiers (AMF) as a compensation body under the Insurers Act (Québec) and is funded by the life and health insurance industry to safeguard the financial well-being of Canadians.
Assuris has Participation Agreements with all jurisdictions in Canada (federal, provincial and territorial). Every life and health insurance company licensed to sell insurance in Canada is required by all regulators to become a member of Assuris and maintain Assuris membership in good standing as a condition of their licensing.
