CLHIA response to the Revised Cooperative Capital Markets Act and Draft Initial RegulationsRelease Date: 12/16/2015 Staff Reference: James Wood
Revised Draft Capital Markets Act and Draft Initial Regulations
We are writing to provide comments on the Revised Draft Capital Markets Act (“draft CMA”) and the Draft Initial Regulations released for consultation on August 25, 2015.
Established in 1894, the Canadian Life and Health Insurance Association (CLHIA) is a voluntary trade association that represents companies which together account for 99 per cent of Canada’s life and health insurance business. The industry, which provides employment to about 150,000 Canadians and has assets in Canada of over $721 billion, protects about 28 million Canadians through products such as life insurance, annuities, registered retirement savings plans, disability insurance and supplementary health plans. It pays benefits of almost $84 billion a year to Canadians and manages about two-thirds of Canada’s pension plans.
Our main concern with the draft CMA continues to relate specifically to the definition of “security” and the need to maintain a harmonized regulatory approach for insurance products under insurance legislation. More specifically, the first part of our letter sets out the reasons why it is inappropriate to treat individual variable insurance contracts (IVICs) as securities and outlines some of the ongoing work in this area by insurance regulators.
The second part of this letter comments on the provisions of the draft CMA and Draft Initial Regulations relating to the importance of carrying forward existing registration and prospectus exemptions on which insurers rely, discusses the proposed regulations related to derivatives regulation, and comments on the importance of cooperation with non-participating jurisdictions.