Signage is seen on Manulife Financial Corp.'s office tower in Toronto on February 11, 2020. THE CANADIAN PRESS/Cole Burston

Insurers applaud high-profile court ruling on life insurance investments

Insurers applaud high-profile court ruling on life insurance investments

TORONTO — A group representing the life insurance industry says a decision by the Saskatchewan Court of Appeal will support consumer protection rules that separate banking from insurance.

The Canadian Life and Health Insurance Association says the court found a 2018 regulation prevents life insurance companies from accepting deposits and amounts unrelated to insurance coverage, marking a win in the insurance industry’s fight with investment firms.

In the lawsuit, Mosten Investment LP had argued that Manufacturers Life Insurance Co.’s universal life insurance policy allowed for unlimited deposits and a guaranteed return.

The case caught the attention of prominent short-seller Muddy Waters, which argued in 2018 that a ruling in Mosten’s favour could lead to billions of dollars of losses.

But Manulife says it was successful in arguing that policyholders cannot make unlimited deposits into universal life insurance contracts and that deposits must relate to amounts required to pay the life insurance premium.

Ronald Miller, one the lawyers who represented Mosten, says the firm is reviewing the decision, and is disappointed the court would permit governmental interference into a contract that was issued decades before the new regulations were passed.

Manulife says the legal matter did not have any material impact on the company’s business, and shares of Manulife’s stock rose more than one per cent on Wednesday.

“In the interest of protecting consumers, many other provinces including Ontario, Prince Edward Island, Alberta, New Brunswick and Nova Scotia have introduced legislation to provide similar clarity and reinforce the separation of banking and insurance,” said CLHIA chief executive Stephen Frank in a statement on the ruling, adding that the industry group was pleased with the decision.

This report by The Canadian Press was first published March 10, 2021.

Companies in this story: (TSX:MFC)

The Canadian Press

Business

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

.
3-hour paid leave for Albertans to get vaccinated in the works

The UCP government intends to introduce legislation that will ensure working Albertans… Continue reading

Alberta completed 18,412 COVID-19 tests, as reported on Wednesday, for a test positivity rate of 9.5 per cent. (NIAID-RML via AP)
Highest daily count of 2021 so far: Alberta reports 1,699 COVID-19 cases

Variants now make up 59 per cent of Alberta’s active cases

Several cases of COVID-19 were reported among employees of stores at Bower Place Mall. (Photo by LANA MICHELIN/Advocate staff).
COVID-19 cases reported at Bower Place mall stores

AHS said five complaints were investigated since March, and required changes made

Edmonton Eskimos' Tanner Green, right, knocks the ball from Calgary Stampeders' Romar Morris during first half CFL football action in Calgary in 2019. Green has been waiting for nearly 17 months to get back on the field with the Edmonton Football Team. THE CANADIAN PRESS/Jeff McIntosh
Lacombe’s Tanner Green happy to finally see a CFL return to play date

CFL announced Wednesday league will return on Aug. 5

Westerner Park’s Exhibition Hall was used as a vaccination clinic on Wednesday. A steady stream of people came to get their COVID-19 shots either by appointment or as walk-ins. Photo by PAUL COWLEY/Advocate staff
No long lineups at walk-in vaccination site in Red Deer

A steady stream of people walked into Westerner Park on Wednesday to… Continue reading

A school bag and a lunch bag are seen in the schoolyard at Bancroft Elementary School as students go back to school in Montreal on Monday, Aug. 31, 2020. Alberta Education Minister Adriana LaGrange says the organization representing the province's teachers is playing politics with a proposed new kindergarten to Grade 6 curriculum and isn’t sincere about a real bridge-building effort. THE CANADIAN PRESS/Paul Chiasson
Alberta teachers and education minister swap accusations of politicizing curriculum

Alberta teachers and education minister swap accusations of politicizing curriculum

Alberta Premier Jason Kenney shakes hands with Jason Nixon, minister of Environment and Parks after being sworn into office, in Edmonton on Tuesday April 30, 2019. Town council from the largest municipality in Nixon's constituency is concerned over the province's consultation plans for open-pit coal mining in the Rocky Mountains. THE CANADIAN PRESS/Jason Franson
Council in Alberta environment minister’s town wants better coal consultation

Council in Alberta environment minister’s town wants better coal consultation

In this photo released by the official website of the office of the Iranian Presidency, President Hassan Rouhani speaks in a cabinet meeting in Tehran, Iran, Wednesday, April 14, 2021. Iran's president on Wednesday called Tehran's decision to enrich uranium up to 60% after saboteurs attacked a nuclear site "an answer to your evilness," linking the incident to ongoing talks in Vienna over its tattered nuclear deal with world powers. (Iranian Presidency Office via AP)
US outlines possible sanctions relief for Iran in nuke talks

US outlines possible sanctions relief for Iran in nuke talks

Activists hope Chauvin convictions are start to real change

Activists hope Chauvin convictions are start to real change

CORRECTS THAT PHOTOGRAPHS ARE OF TRANSGENDERED WOMEN KILLED OVER THE YEARS, NOT PEOPLE WHO DIED BY POLICE VIOLENCE - A backstop at Cal Anderson Park is covered, Tuesday, April 20, 2021, in Seattle, with photographs of transgendered women who have been killed in the past years. (Dean Rutz/The Seattle Times via AP)
Grim list of deaths at police hands grows even after verdict

Grim list of deaths at police hands grows even after verdict

FILE - This file image made from a video aired Friday, Jan. 7, 2005, by Israeli television station Channel 10, shows what the television station claims is Israel's top secret nuclear facility in the southern Israeli town of Dimona, the first detailed video of the site ever shown to the public. The Israeli military said that a missile was fired into Israel from neighboring Syria early Thursday, April 22, 2021, and that it has struck targets in Syria in response. Earlier, air raid sirens sounded in Dimona, the Negev town that is home to Israel's secretive nuclear reactor, indicating a possible incoming attack. (Channel 10 via AP, File)
Israel says it strikes targets in Syria after missile attack

Israel says it strikes targets in Syria after missile attack

FILE - In this July 8, 2014, file photo, is a sign alerting visitors to water conservation efforts at the state Capitol in Sacramento, Calif. Gov. Gavin Newsom has declared an emergency executive order in two Northern California counties in response to drought conditions affecting much of the state. The announcement Wednesday, April 21, 2021, affects Mendocino and Sonoma counties, where Newsom says drought conditions are especially bad. (AP Photo/Rich Pedroncelli, File)
California governor declares drought emergency in 2 counties

California governor declares drought emergency in 2 counties

Meng Wanzhou, chief financial officer of Huawei, walks down the street with an acquaintance after leaving B.C. Supreme Court during a lunch break at her extradition hearing, in Vancouver, B.C., Thursday, April 1, 2021. A judge is scheduled to release her decision today on a request to delay the final leg of hearings in Meng Wanzhou's extradition case. THE CANADIAN PRESS/Rich Lam
B.C. judge grants Meng Wanzhou’s request to delay extradition hearings

B.C. judge grants Meng Wanzhou’s request to delay extradition hearings

Most Read