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Assuris is much more than a Policyholder Protection Scheme (PPS) for Life Insurance
Early Days of Assuris as a Policyholder Protection Scheme (PPS)
Since its foundation almost forty years ago, Assuris and the life and health insurance industry have always stepped up, innovated and proactively improved to better resolve failed insurers and protect all covered Canadian policyholders, at the least cost for the industry and without ever requiring government or taxpayer money. Assuris is the life and health insurance industry’s solution to insurance resolution and is a key player in preserving financial stability and safeguarding the safety net for tens of millions of Canadians.
The Canadian Life and Health Insurance Compensation Corporation (“CompCorp”), known as Assuris since 2005,[1] was incorporated as a not-for-profit Policyholder Protection Scheme (PPS) on December 16, 1988.[2] Founded by the life and health insurance industry to administer the consumer protection plan and in cooperation with federal, provincial and territorial regulators, Assuris has repeatedly demonstrated its ability to step up, innovate, and proactively improve its tools and processes to better resolve failed insurers and protect all covered Canadian policyholders without relying on government or taxpayer money.
Membership in Assuris was initially voluntary; however, shortly after Assuris was established, Canadian jurisdictions began to take legislative action to make membership in Assuris mandatory as a condition of licensing for life and health insurance companies. This was mainly because governments wanted to protect the interests of policyholders of covered life and health insurance policies of a non-viable insurer.
All jurisdictions recognized that Assuris was established because of the cooperative relationship between Canada’s life and health insurers and the regulatory authorities in provincial, territorial and federal governments.[3] To this day, Assuris membership remains a requirement if an insurer wishes to keep its licenses in force in all provinces and territories.
Assuris is designated by order of the Federal Minister of Finance as the compensation association with the authority to levy an assessment on each of its members and obligates every company insuring risks within a class of life and health insurance to become and remain a member of Assuris.[4] A similar designation exists in all other Canadian jurisdictions, thereby ensuring nationwide protection for covered policyholders of federal and provincially incorporated insurers.[5]
Funding of Assuris
In recognizing the importance of Assuris in the protection of insureds in Canada, the jurisdictions also facilitated the funding arrangements between the member companies and Assuris that were clearly defined in Assuris’ By-Law and Memorandum of Operation.
As a private sector PPS, Assuris has never benefitted from any government funding. Rather, Assuris continues to be funded through the most common PPS funding, namely industry assessments that are “collected as contributions from insurers whose claims are covered by the PPS (i.e. insurers participating in the PPS framework)”.[6]
Industry assessments fund an insurer failure without the need for taxpayer funds or government intervention and can also contribute to limiting any risk of moral hazard.
There are three types of industry funding: ex ante (pre-funded), ex post (post-funded), or hybrid. Assuris’ industry funding is primarily ex post through its post-funding capacity of assessing the member companies to resolve the failed insurer. It has also endorsed a hybrid funding approach through its Liquidity Fund, which although does not amount to a pre-fund financed by the industry, it nevertheless represents funds on hand that can be used to resolve a non-viable insurer in the early stages of liquidation.
The combination of the pre- and post-funding capacity contributes to the adequacy of the industry assessment and mitigates the weakness of exclusively using either approach. Another strength of Assuris’ funding is that it is truly national, spanning all 14 Canadian jurisdictions (federal, 10 provinces, and 3 territories) who have undertaken, through a participation agreement with Assuris, to ensure all life and health insurers, irrespective of the Canadian jurisdiction where they are incorporated or solvency regulated, comply with their financial obligations with Assuris.
Assuris: A “Paybox” PPS
As a PPS, Assuris’ objective is to protect, up to its limits, Canadian policyholders against loss of benefits or unpaid claims under their life, annuity, and accident and sickness contracts, should a member of Assuris become insolvent. Less than two years after Assuris was established, Les Coopérants failed in 1992.
Assuris was instrumental in successfully resolving Les Coopérants and protecting its policyholders. Although Assuris was established as a ‘paybox’, funding the resolution through membership assessments and paying the policyholders to make them whole—up to Assuris’ protection, Assuris’ creative resolution strategy demonstrated much more. To resolve Les Coopérants, Assuris entered a loan agreement to negotiate its role in the liquidation, it was actively involved in the sell strategy to preserve policies and value (this had never been done before), it advanced funds early in an attempt to achieve a solvent solution (although that did not materialize) and ultimately created a real estate holding company to work out the estate’s troubled assets.
Assuris: Evolving from a “Paybox” to a “Paybox+” PPS with CompCorp Life Insurance Company
In 1993, less than a year after the failure of Les Coopérants, Sovereign Life became insolvent. Assuris realized that it needed greater responsibilities and an additional tool to successfully resolve Sovereign Life: the incorporation of a life insurance company wholly owned by Assuris, a bridge insurer that could act quickly and decisively and temporarily manage good business or work out problematic assets or unsaleable business. Assuris argued that this would add another resolution tool to its toolkit to support the transfer of a failed member company’s business.[7]
Assuris applied to the Minister of Finance for the issue of letters patent for a federal life and health insurance company. CompCorp Life Insurance Company (CCL) was incorporated as a wholly owned subsidiary of Assuris on June 10, 1993 under the Insurance Companies Act.[8]
Assuris: Evolving from a “Paybox+” to a “Cost Minimizer” PPS
In 1994, Confederation Life (“Confed”) failed. At the time, Confed was the fourth largest insurer in Canada with over $19 billion in assets in Canada and the United States. To resolve Confed, Assuris had to take on responsibilities to select from a range of least-cost resolution strategies and elect the resolution strategy that would “likely reduce the total cost of the Corporation of the insolvency”.[9]
Confed took 10 years to resolve and throughout the resolution, Assuris actively strengthened its resolution powers and enhanced the resolution framework to continue to contribute to a healthy and strong life and health insurance industry in Canada. One series of enhancements originated from the 1995 publication of the White Paper entitled Enhancing the Safety and Soundness of the Canadian Financial System,[10] which generated discussions at the federal government about the creation of a non-agent crown corporation that was CDIC-like to replace Assuris.[11]
Assuris was successful in defending its private sector solution and the federal government supported it by rejecting the CDIC-like model if Assuris agreed to:
- have an independent Board of Directors, which is linked to better information-sharing between Prudential Supervisors and Assuris and allows a going-concern solution,
- be able to borrow in public markets and have an enhanced access to financing as a private sector solution,
- be able to finance itself from borrowing from the industry, and
- be able to effect going-concern or soft-landings solutions.
The industry unanimously stood behind Assuris’ transition to a fully independent Board and agreed to wider industry assessment capabilities even before a member company is declared insolvent (going-concern solution).[12] Assuris’ Board independence from the industry, coupled with the already existing non-objection right of the jurisdictions, made Assuris more accountable to government, while retaining the credibility of its risk assessment and resolution expertise.
Ten years after its inception, Assuris began focusing on resolution preparedness and thinking of which solutions would be more successful in different failure scenarios. Being independent from the industry allowed it to evaluate whether CCL could be future proofed as a resolution tool. In fact, when CCL was incorporated, it was restricted to acquiring or reinsuring policies only of a non-viable Assuris member life and health insurance company, against which a winding-up order under the Winding Up and Restructuring Act (WURA) was made.
Assuris’ preparedness efforts pointed to the necessity to have the winding up order requirement removed, leading to the amendment of CCL’s letters patent in 2000. This amendment provides greater resolution flexibility in allowing uses of CCL as a resolution tool outside the court.
Assuris: Evolving from a “Cost Minimizer” to a “Risk Minimizer” PPS
For close to four decades, Assuris has always evolved to fill the gaps in the resolution framework and been proactive in seeking framework enhancements to ensure preparedness in protecting Canadian policyholders. As Assuris has continually adapted to new challenges, this evolution has been accompanied by deliberate government decisions to expand the role and capabilities of Assuris. Today, Assuris is the lead resolution expert for life and health insurance in Canada, and it is recognized as such globally by international standard setters and foreign counterparts.
The 2025 Financial Sector Assessment Program (FSAP)[13] and its Financial System Stability Assessment report highlighted a gap in Canada’s insurance resolution framework by calling out the need for an insurance resolution authority. On the heels of the FSAP, Assuris is working to fill that gap and ensure the Canadian insurance resolution framework is modernized and a special resolution regime is set up. This will allow Assuris to intervene before insolvency and increase the prospects of a successful and orderly resolution that will protect Canadians. Just as governments and industry have previously worked together to expand Assuris’ role in response to changing needs, the gap identified points to a further opportunity to strengthen Canada’s policyholder protection framework.
[1] CompCorp changes its name to Assuris – insurance-canada.ca – Where Insurance & Technology Meet
[2] On November 24, 1989, Assuris held the first meeting of its provisional directors as well as its first AGM On Jan 3, 1990, Assuris held the second meeting of its provisional directors of Assuris[1] and its second AGM. This second meeting marks the official beginning of Assuris.
[3] Participation Agreement between Assuris and Canada, signed in September, 1992.
[4] S. 449 (1) Insurance Companies Act(Canada).
[5] For example, in Québec, S. 89-91, Insurers Act, chapter A-32 (Québec).
[6] Issues Paper on roles and functioning of policyholder protection schemes (PPSs), IAIS, December 2023.
[7] The incorporation of CCL provided CompCorp the possibility to enter a proportional reinsurance transaction where CCL would purchase assets and, if needed for either financial or coverage reasons, assume the policyholder liabilities of Sovereign Life.
[8] CCL is regulated by OSFI. With a capital of $10 million, CCL is licensed to operate in each Canadian province and territory only in support of the resolution of a non-viable life and health insurance company in Canada. CCL does not have any active operations: it is essentially dormant.
[9] Assuris Memorandum of Operation, section 5.03.
[10] Enhancing the Safety and Soundness of the Canadian Financial System, Doug Peters, February 1995.
[11] Tuesday, June 20, 1995– com: Finance (150)
[12] Notwithstanding Assuris can assess the industry with respect to a troubled member company before it is declared insolvent, it lacks the statutory mandate and authority proper of a special resolution regime to deploy those resources.
[13] Canada – Financial System Stability Assessment – Press release and staff report, 2025. The FSAP is jointly conducted by the World Bank and the International Monetary Fund (IMF) to provide a comprehensive analysis of the resilience of a country’s financial sector, including banks, insurance companies, asset managers and financial markets. The FSAP includes an evaluation of the quality of supervision and regulation and an assessment of the crisis management framework.
