Changes to Canada-wide business practices

From B.C. and Alberta Insurance Acts regulatory changes

On July 1, 2012, the Alberta and British Columbia Insurance Acts and regulations take effect. These changes enhance consumer protection, by modernizing the legal framework that regulates insurance contracts. As other Canadian provinces are expected to enact similar changes within the next few years, we are applying most of the changes below Canada-wide, except where noted.

The regulatory changes apply to the following products and their contracts; find below a detailed summary of the changes and any action you may need to take:

Critical illness insurance (CII)
Life insurance including accidental death insurance (ADI)
Long term care insurance (LTCI)
Payout annuity
Personal health insurance (PHI) and health coverage choice (HCC)
Superflex/Income Master

Critical illness insurance (CII)

Summary of change	Advisor action
Contract wording Additional wording must be added to life insurance contracts and policies – for Accident & Sickness (A&S). These changes may include new limitation notices, and beneficiary change warning if restrictions exist within the contract.	None
Contingent owners can be named for critical illness policies. Please note: The current paper application states: "Contingent owner is not available if the base plan is critical illness".This is being removed and will be updated in the new version of the paper application in September 2012.	You will need to name the contingent owner in the Special Instructions section of the application. If the contingent owner is not specifically indicated, the policy will be issued without a contingent owner and the E28 - Contingent owner change form will be required to appoint a contingent owner after the policy has been issued.
Return on Premium on Death (ROPD) beneficiaries can now be appointed and can be made irrevocable.	You will need to indicate the name of the beneficiary, the relationship to the insured (or policyowner if Quebec) and that the beneficiary is irrevocable in the Special Instructions section of the application. If this is not done, the policy will be issued with a revocable beneficiary and the E53 - Payee designation change for critical illness insurance policies will be required to make the change after the policy has been issued.
Grace period Although the policy terminates at the end of the grace period, a policyowner can reinstate their policy within 30 days of the grace period (31 days from the date the premium is due), without evidence of insurability, if the insured person is alive.	None
Reinstatement After the 61-day reinstatement without evidence period, policyowners need to apply for reinstatement with evidence of insurability based on the terms in their policy contract.	To carry out the reinstatement from 62 to 180 days from the premium due date, use this form for all amounts of insurance: E67 - Application for reinstatement of life or critical illness insurance After day 180, regular evidence for age and amount and E110 - Application for policy change, reinstatement and/or reconsideration of rating
Claims (limitation period) Insurers must include a limitation period provision in the contract. A limitation period provision describes the time period that a client may commence a proceeding for the recovery of benefits (sue the insurer) under the policy. Although Sun Life Financial's contract already includes wording relevant to the commencement of a legal action, the Insurance Act requires us to include notice of limitation wording on certain claims letters to clients.	You do not need to take any action; however, clients may contact you to ask questions upon receiving a denial letter.

Life insurance including accidental death insurance (ADI)

Summary of change	Advisor action
Contract wording Life insurance contracts and policies have been updated to include additional wording. These changes may include new limitation notices, and beneficiary change warning if restrictions exist within the contract.	None
Grace period Although the policy terminates at the end of the grace period, a policyowner can reinstate their policy within 30 days of the grace period (31 days from the date the premium is due), without evidence of insurability, if the insured person is alive.	None
Reinstatement After the 61-day reinstatement without evidence period, policyowners need to apply for reinstatement with evidence of insurability based on the terms in their policy contract.	To carry out the reinstatement from 62 to 180 days from the premium due date, use this form for all amounts of insurance: E67 - Application for reinstatement of life or critical illness insurance After day 180, regular evidence for age and amount and E110 - Application for policy change, reinstatement and/or reconsideration of rating .
For ADI policies, a contingent owner can be named.	E28 - Contingent owner change form is required to appoint a contingent owner, or a written request that is signed and dated by the client can also be sent to head office, including the client name and policy number.
Claims (limitation period) Insurers must include a limitation period provision in the contract. A limitation period provision describes the time period that a client may commence a proceeding for the recovery of benefits (sue the insurer) under the policy. Although Sun Life Financial's contract already includes wording relevant to the commencement of a legal action, the Insurance Act requires us to include notice of limitation wording on certain claims letters to clients.	You do not need to take any action; however, clients may contact you to ask questions upon receiving a denial letter.

Long term care insurance (LTCI)

Summary of change	Advisor action
Contract wording Health insurance contracts and policies have been updated to include additional wording - for Accident & Sickness (A&S). These changes may include new limitation notices, and beneficiary change warning if restrictions exist within the contract.	None
Contingent owner can be named.	The name of the contingent owner must be included in Special Instructions section of the paper application. If the contingent owner is not specifically indicated in Special Instructions, the policy will be issued without a contingent owner, and the E28 - Contingent owner change form will be required to make the change after the policy has been issued.
Return on Premium on Death (ROPD) beneficiaries can now be appointed and can be made irrevocable.	You will need to indicate the name of the beneficiary, the relationship to the insured (or policyowner if Quebec) and whether or not he/she is irrevocable or revocable in Special Instructions section of the application. If the beneficiary information is not indicated, the policy will be issued without a beneficiary for the ROPD. To appoint a ROPD beneficiary after issue or for inforce policies, a request in writing can be sent to head office, including the client name, policy name, and new beneficiary appointment (with a percentage, if applicable). The letter must be signed and dated by the client.
Grace period Although the policy terminates at the end of the grace period, a policyowner can reinstate their policy within 30 days of the grace period (31 days from the date the premium is due), without evidence of insurability, if the insured person is alive.	None
Reinstatement After the 61-day reinstatement without evidence period, policyowners will need to apply for reinstatement with evidence of insurability based on the terms in their policy contract.	To reinstate, use this form: E226 - Application for reinstatement - Long term care insurance
Claims (limitation period) Insurers must include a limitation period provision in the contract. A limitation period provision describes the time period that a client may commence a proceeding for the recovery of benefits (sue the insurer) under the policy. Although Sun Life Financial's contract already includes wording relevant to the commencement of a legal action, the Insurance Act requires us to include notice of limitation wording on certain claims letters to clients.	You do not need to take any action; however, clients may contact you to ask questions upon receiving a denial letter.

Payout annuity

Summary of change	Advisor action
Contract wording Payout annuity contracts will be updated to include a new section "Time limit for recovery of insurance money" with a limitation notice.	No action is required from you. Payout contracts will continue to be forwarded to you for delivery to the clients.
Claims (limitation period) Insurers must include a limitation period provision in the contract. A limitation period provision describes the time period that a client may commence a proceeding for the recovery of benefits (sue the insurer) under the policy. Although Sun Life Financial's contract already includes wording relevant to the commencement of a legal action, the Insurance Act requires us to include notice of limitation wording on certain claims letters to clients.	You do not need to take any action; however, clients may contact you to ask questions upon receiving a denial letter.

Personal health insurance (PHI) and health coverage choice (HCC)

Summary of change	Advisor action
Contract wording Health insurance contracts and policies have been updated with additional wording - for Accident & Sickness (A&S). Examples to show how the travel provision works will be included in the PHI policies effective July 1, 2012 and later.	None
Copy of application provided to client A copy of the application will be sent to the policyowner within a few days of their welcome kit being mailed (applies to Alberta, B.C. and Quebec).	None
Grace period A policyowner has a 30-day grace period for the payment of premiums from the date premiums are owing or a 15-day grace period for the initial premium.	None
Claims (limitation period) Insurers must include a limitation period provision in the contract. A limitation period provision describes the time period that a client may commence a proceeding for the recovery of benefits (sue the insurer) under the policy.	None

Superflex/Income Master

Summary of change

Advisor action

The contract wording on the reverse of the following applications have been updated:

Contracts will have a new section called "Time limit for recovery of insurance money".

Destroy old stock: As of July 1, 2012, if you have printed copies of these applications on hand, please destroy the stock and begin using the new forms.

Transition period: A 60-day transition period will take place where we will continue to accept old versions of the applications. After the transition period is over (starting September 2, 2012), if an old form is submitted, you will be contacted.

Claims (limitation period)
Insurers must include a limitation period provision in the contract. A limitation period provision describes the time period that a client may commence a proceeding for the recovery of benefits (sue the insurer) under the policy. Although Sun Life Financial's contract already includes wording relevant to the commencement of a legal action, the Insurance Act requires us to include notice of limitation wording on certain claims letters to clients.

You do not need to take any action; however, clients may contact you to ask questions upon receiving a denial letter.