What's going on in Individual Insurance and Investment

In this issue:

• Vendor products | Dividend scale interest rate increasing to 6.2% on July 1, 2023
• E‑application | In automating mode to make as many point‑of‑sale decisions as possible
• Green transition | More rarely used paper forms will be PDF‑only
• Changes to Saskatchewan LIRA – Individual Annuity and Guaranteed Investment Funds

VENDOR PRODUCTS | DIVIDEND SCALE INTEREST RATE INCREASING TO 6.2% ON JULY 1, 2023

Dividend scale interest rates for all our participating life insurance policies have been revised in light of higher‑than‑expected returns resulting from rising interest rates and changes to our investment strategy. 

Current product lineup 

We're pleased to announce that the dividend scale interest rate will be increasing to 6.2% on July 1, 2023, for our current lineup of participating life insurance policies:

• 5 pay PAR 
• Accelerated Growth (10 Pay, 20 Pay or to 100)
• Estate Enhancer (10 Pay, 20 Pay or to 100)

Policyowners will have the opportunity to take advantage of the increase during their next renewal after July 1, 2023.

Impact on dividends paid to clients

The dividend scale interest rate increase, in combination with our revised mortality assumptions, means dividends will be increasing for most participating life insurance policyowners.

Updated illustration tool coming May 1, 2023

Starting May 1, 2023, you will be able to present the following 3 scenarios for participating life insurance:

• Current rate of 6.2% (mandatory)
• Reduced rate of 5.2% (mandatory)
• A rate of your choice between 4.2% and 6.7% (optional)

Policies issued before 2017

The dividend scale interest rate increase will mean increased dividends for most participating life insurance policies.

Standardized review date

Please note that the annual review dates for dividend scales have been standardized to July 1 for all participating life insurance policies.

Illustrations for in-force policies

*NEW* Illustrations for Protector policies available by late June 

We're working hard to develop illustrations based on the new dividend scale. They'll be uploaded automatically to Clients Documents on Webi. 

Keep an eye on the news for more information. Please wait to get your hands on the automatic illustration before asking for other scenarios.

Illustrations for other participating life insurance products

The new scale comes into effect on July 1, 2023, and you will be able to email Expertise_Portefeuille_Backbook@dsf.ca to request new illustrations starting July 4, 2023.

For more information about participating whole life insurance, visit our participating whole life insurance page and the page on our new investment strategy.

Questions?

See our FAQ or contact your regional sales director.

E-APPLICATION | IN AUTOMATING MODE TO MAKE AS MANY POINT-OF-SALE DECISIONS AS POSSIBLE

Over the past few years, we've done a lot of work to improve the e‑application, with a special focus on increasing point‑of‑sale decisions and processing eligible applications more efficiently. Everything we've done to improve efficiency is aimed at achieving our goal of making it easier for you to offer insurance to your clients.

Here's a brief overview of what we've accomplished in this respect in 2022, in case you didn't know:

• The eligibility threshold for critical illness insurance was raised from $100,00 to $250,000, for all insureds ages 18 to 40.
• A predictive model was implemented.
• Decisions are now displayed by illustration.
• The underwriting engine's rules were finetuned to better manage information from previous insurance applications (this doesn't affect your work in any way, but it made our automated underwriting system much more efficient).

On top of all that, we've now streamlined our automated underwriting rules. This increased our immediate decision rate to nearly 40% for all life insurance and critical illness insurance applications submitted.

Interestingly, that same rate rises to nearly 50% if we only consider applications that are eligible for point-of-sale decisions.

Keep in mind that your Financial underwriting requirements now have more flexible rules to reduce processing times. The latest updates are related to children, post‑secondary students and any other low‑income applicants (such as stay‑at‑home spouses) for whom the maximum income amounts to be considered have been revised upward, with no additional justification required in most cases.

As you can see, we're constantly taking steps to make more point‑of‑sale decisions. Making it easier for you to do business with us is one of our key priorities, and we're committed to doing even more. 

Questions?

Call our Client Relation Centre: 1‑800‑278‑0669

GREEN TRANSITION | MORE RARELY USED PAPER FORMS WILL BE PDF-ONLY

We're continuing our efforts to tangibly reduce our environmental footprint by further cutting our use of paper, which has a significant environmental cost.

In the coming months, we'll stop producing some rarely used paper forms. As a result, you'll only be able to use the fillable PDF version.

However, in the rare cases where you need a paper version, you'll still be able to print the form.

How will I know if a paper form is no longer available?

The PDF‑only forms are clearly indicated on Webi. A notification will appear on screen.

The updated version of the Addendum to the electronic application form is only available as a PDF

The updated version of the Addendum to the electronic application form – 13231E is now only available as a PDF that can be filled out on screen. We ask that you only use this version as it includes changes related to the declarations to be signed. If you still have paper copies of the addendum, please destroy them.

Other forms affected by the new eco-friendly practice

Other forms will only be available as PDF files between now and the end of September.

• Request for change without evidence – 09219E
• Request for termination, policy loan, partial surrender or withdrawal of dividends – 07099A
• Insurance application SOLO Essential disability income – 15021E

Questions?

Call our Client Relations Centre: 1‑800‑278‑0669

CHANGES TO SASKATCHEWAN LIRA – INDIVIDUAL ANNUITY AND GUARANTEED INVESTMENT FUNDS

In effect since March 18, 2022, the regulatory changes made to the Saskatchewan LIRA addendum for individual annuities and guaranteed investment funds contracts are as follows.

Although the changes have been effective for over a year, the process to approve all changes on the new addendum by the superintendent of Saskatchewan has delayed its availability. However, owners of these types of accounts were able to benefit from these changes since they came into effect.

Unlocking a LIRA due to financial hardship

Owners of a LIRA can now request to withdraw all or part of their LIRA on the grounds of financial hardship due to one or more of the following reasons:

• Low expected income
• Medical expenses
• Rent arrears
• Mortgage default
• First month's rent, security deposit and pet damage deposit to secure principal residence

Applications to unlock for financial hardship are limited to one time per reason per LIRA in each calendar year.

Exception

For unlocking a LIRA due to medical expenses, owners can request a withdrawal more than once in a calendar year if the funds are for a different person, namely, the LIRA holder, their spouse or a dependant person of either of them.

The amount withdrawn may be limited if the owner has a spouse, as defined by the Pension Act. Their spouse must consent to the withdrawal by completing and signing the prescribed form.

Addenda availability

The new version of the LIRA endorsement (general)  is available in the Forms section in Webi.

Communications

As requested by regulatory authorities, clients affected by these changes will receive an explanatory letter as well as a copy of the new addendum for their file.

• Letter  for clients holding an individual annuity
• Letter  for clients holding guaranteed investment funds (GIF)

You will also receive a copy of this letter for your own files.

Questions?

Call our Client Relations Centre: 1‑877‑647‑5435
Annuities: savings@dfs.ca
Guaranteed investment funds: gifclientservice@dfs.ca