CLHIA comments regarding Alberta's discussion paper on the regulation of the financial sector

Date de parution : 10/02/2014
Personne(s)-ressource(s) : Frank Zinatelli

October 2, 2014

Mr. Mark Prefontaine
Assistant Deputy Minister
Financial Sector Regulation and Policy
Alberta Treasury Board & Finance
Government of Alberta
9515-107 Street
401 Terrace Building, 4th Floor
Edmonton, AB T5K 2C3

Dear Mr. Prefontaine:

Thank you for the opportunity to provide input on the discussion paper regarding the regulation of the financial sector in Alberta.

As you know, the Canadian Life and Health Insurance Association (CLHIA) represents companies which together account for 99 per cent of Canada's life and health insurance business. The industry, which provides employment to more than 14,000 individuals in Alberta and has investments in the province of $68 billion, protects about 3.2 million Albertans through products such as life, disability, critical illness, long-term care insurance, and supplementary health plans, as well as annuities and RRSPs. It pays benefits of over $7.9 billion a year to Albertans.

To begin, we strongly agree with the statement in the discussion paper that the "current system is working well; stakeholders and Albertans are being well served". As you move towards an integrated, single regulator for pensions, insurance and financial institutions, we recommend that you continue with the collaborative approach that has been successful in the past.

The Core Objectives enunciated in the discussion paper are appropriate. We would particularly like to reinforce the importance of applying a risk-based approach to regulation, in respect to both prudential regulation and market-conduct regulation. In the context of the regulation of insurance, this approach is being utilized at present in Alberta, across Canada, and internationally. Its use should be continued and, indeed, it should be enhanced as much as possible.

With respect to changes to ensure that the regulatory powers are commensurate with the risks being managed, we would note that the Insurance Act has been fully updated during the last decade or so and consequently we do not believe that any adjustments to the regulatory powers provisions are likely to be necessary.

With respect to the various functions, we note that a single financial services regulator "would be responsible for licensing and supervising the market conduct of all insurance companies operating in Alberta, and responsible for the prudential supervision of insurance companies incorporated in Alberta". We also note that the policy functions for insurance would remain within the Government of Alberta and that the "Department of Treasury Board and Finance would provide policy advice regarding the Insurance Act and associated regulations; share information with the financial sector regulator; and would liaise on behalf of the Minister with the AIC and the AIRB". Subject to seeing the additional details that will flow from the implementation of the single financial regulator model, we believe that this approach is both appropriate and workable. We do not have any concerns at this time.

Thank you for the opportunity to comment on the discussion paper. Should you have any questions, I would be pleased to hear from you.


(Original signed by)

Frank Swedlove