Assuris’ Experience with Past Life and Health Insurance Failures
There have been four failures in the life and health insurance industry in Canada. With the experience of these failures, Assuris developed its knowledge, expertise and operational capacity to deal with the failure of any life and health insurance company.
Assuris has protected almost three million people representing over 8% of Canadians.
Union of Canada
On February 2, 2012, Union of Canada Life Insurance, headquartered in Ottawa, sought court protection under the Winding-up and Restructuring Act (WURA).
Union of Canada Life Insurance had 22,000 policyholders. Assuris fully protected 99% of them. The remaining 1% retained at least 95% of their benefits. Assuris worked closely with the liquidator to ensure policyholders were transferred to another life insurance company, where their benefits continue to be honoured.
Union of Canada was a small test case that illustrated the effectiveness of our resolution processes well over twenty years after the experience in the 1990s.
Outcome:
- 99% of the 22,000 policies were fully covered by Assuris.
- The remaining 1% of policyholders who incurred some losses retained at least 95% of their benefits.
Confederation Life
On August 11, 1994, the liquidation of Confederation Life began.
Confederation Life had 260,000 individual Canadian policyholders and 1.5 million policyholders under group insurance plans. Confederation Life was an internationally complex liquidation with operations in Canada, the United States and the United Kingdom.
Assuris provided immediate protection to Canadian policyholders under our protection rules. As the liquidation progressed, Assuris partnered with the regulator and the liquidator, and leveraged lessons learned in previous insolvencies. The result was full recovery for Canadian policyholders.
The failure of Confederation Life demonstrated the challenges of cross-border insolvency and the benefit of cooperation across jurisdictions.
Outcome:
- Full recovery for 260,000 individual policyholders and another 1.5 million people who participated in group insurance plans.
Sovereign Life
On January 18, 1993, a Winding-up order was granted against Sovereign Life, headquartered in Calgary.
Sovereign Life had 249,000 policyholders. Assuris fully protected 96% of them. The remaining 4% of policyholders retained at least 90% of their benefits. Assuris successfully transferred all policies to a solvent life insurance company.
This was the first time that Assuris used its fully-licensed life and health insurance company, CompCorp Life Insurance as a tool to maximize policyholder protection and minimize cost to the industry.
Outcome:
- 96% of the 249,000 policyholders were 100% protected by Assuris coverage.
- The remaining 4% who incurred some loss all retained at least 90% of their benefits.
Les Coopérants
On January 3, 1992, Les Coopérants, headquartered in Montreal, was ordered into liquidation under the Winding-up Act.
Les Coopérants had 222,000 individual policyholder insurance contracts and 600,000 policyholders under group insurance plans. All policyholders were fully protected by Assuris.
This was the first life insurance company failure in Canada and Assuris successfully established the precedent that policyholders should receive priority in the liquidation of a life insurance company.
Outcome:
- All 220,000 policyholders and 600,000 group insurance certificate holders were fully protected.
1990
Assuris
Assuris is founded by the Canadian life and health insurance industry.
For more information on past failures, we encourage you to read our “Lessons learned” series of articles:
Assuris Lessons Learned from Past Failures – Why Life and Health Insurers Fail
Assuris Lessons Learned from Past Failures – How Life and Health Insurers Are Resolved
Explore What Happens in a Failure
See how Canada’s resolution framework protects policyholders if a life and health insurer fails. These pages explain the coordinated approach between regulators, Assuris, and other stakeholders to preserve financial stability, how the resolution process works, and our experience with past failures.
