The Canadian Council of Insurance Regulators (CCIR) announced Aug. 29 that it will publish a position paper this fall outlining its recommendations and expectations with the aim of improving disclosure for segregated funds.
In a statement, the CCIR said it expects that its work in this area will result in “significant changes in the regulation of segregated funds; changes that are intended to ensure customers better understand the costs and performance of their segregated fund investments.”
The recommendations to be made in the position paper will refer to issues such as “the delivery of the Fund Facts document for subsequent transactions, risk classification methodology, oversight of sales, needs-based analysis, updating of client records and know-your-product due diligence requirements,” says the announcement.
Performance, fees and charges
The CCIR says it will also publish a prototype disclosure document. This document, expected to be released in winter 2018, will identify minimum required information on performance as well as on fees and charges, says the CCIR.
"Ensuring that customers have the information needed to understand not only how their segregated funds are performing, but also their full costs is of the utmost importance to us." Anatol Monid, Chair of the CCIR’s Segregated Funds Working Group and Executive Director of the licensing and market conduct division of the Financial Services Commission of Ontario (FSCO).
The CCIR’s announcement follows its review which was aimed at assessing the regulatory framework of seg funds, especially in light of recent regulatory reforms impacting mutual funds. In May of 2016, the CCIR's Segregated Funds Working Group published an issues paper for public consultation.