B4 - Wednesday, March 28, 1984 - North Shore News

S| business |

INSURERS READY TO EXPAND

They want more than life

THE CANADIAN life insurance industry has re- quested a major overhaul of federal insurance legislation to enable the industry to compete on an

equal footing with banks,

trust companies and

other financial institutions for a wider range of

consumer products and services.

A 204-page submission from the Canadian Life and Health Insurance Associa- tion, representing 123 member companies, says changes to The Canadian and British Insurance Companies Acts and The Foreign Iin- surance Companies Act are

‘“‘of immediate and para- mount importance to the industry.”’

The industry is being plac- ed at a competitive dis- advantage through a number of recent events including the shifts in consumer preference

have been able to dominate new areas, notably residential mortgage lending. Credit unions have moved out of church basements to become distinct banking systems with broad powers.

wants to have more flexibility in choosing investments. Diversification would enable the industry to remain competitive, while the public would benefit from that com- petition through product in-

market Bonds. Sell financial products of other companies or institu- tions on a_ fee-for-service basis.

Meet the needs of their

Canada Savings

TELEK FOR

per month.

for new kinds of investment

vehicles because of the im-~

pact of inflation. Other fac- tors include changes in federal tax policies affecting insurance; changes in policy concerning Canadian owner- ship of resources; and the growth of diversified finan- cial services companies. EVOLUTION

In its submission to the Minister of State for Finance, CLHIA notes that because of their size, branch office net- works and 10-year legislative reviews, Canadian banks

Finance companies have purchased trust firms and trust companies have been competing for savings dollars, often through in- novative marketing strategies. The ‘‘one-stop shopping’’ approach has been instituted in Canada by organizations like Eaton Bay Financial Services.

The main thrust of the CLHIA submission is that the insurance industry needs to be able to diversify into more financial products and services - in addition to in- surance and annuities - and it

” NEWS photo Stuart Davis

ADDING SOME Oriental pizazz to the opening of Japan Cameras second North Shore store in Westlynn Mall were June Kasuya (foreground) and Masum! Hamazaki along with other members of the Otowa Japanese Dance Group. They will perform next at Foth Festival April 28 at the Queen Elizabeth Theatre

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novations, better service, lower costs and improved convenience.

Investment flexibiltiy would maximize returns on assets to the benefit of policy- holders and_ shareholders, and aid economic develop- ment by providing invest- ment capital where it is need- ed and in the most ap- propriate form.

CLHIA has recommended that life companies be authorized to acquire sub- sidiaries engaged in any lawful business activity, sub- ject to a specific limitation on aggregate amounts that could be invested in subsidiaries.

WIDER RANGE

Under the proposals, life companies would be able to offer directly, rather than through subsidiaries, those services closely related to their own operations. These would include trusteeship,

premium financing and

marketing of government securities.

The use of appropriate subsidiaries of ‘‘affiliates’’ to engage in cross-sectoral ac- tivities would preserve, in the interest of the public, a clear separation among the ‘‘core’’ activities of the four main sectors of the financial ser- vice industry, i.e., insurance, banking, trust and security.

At the same time it would ensure that all financial in- stitutions would be subject to the same regulatory and ad- ministrative supervision when marketing equivalent products and services.

The changes would enable life companies to:

eFully service, as ad- ministrative trustees, death benefits proceeds, pension

plans and savings plans. *Provide financial assistance to those consumers wishing to buy insurance and annuities.

elssue and redeem securities on behalf of any government in Canada (federal, provin- cial or municipal). This would include the power to

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customers for custodial and safekeeping services.

Raise money by the sale of bonds and debentures. Participate more actively in the financing of equipment for Canadian enterprises.

eEngage in the insurance brokerage business. eEngage in real estate

brokerage, and the offering of mortgage brokerage and real estate services. TOO MUCH RESTRAINT

As for investment policy, limited flexibility allowed under current investment restrictions “is seen as a restraint on a life insurer’s ability to operate. For these reasons, CLHIA endorses the *‘prudent managemet’’ con- cept.

West Van. 926-0139

CORA GRAY

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