iA Financial Group is another insurer involved in litigation with a universal life insurance policy holder, Ituna Investment, that claims it can make unlimited deposits in its contract. The life insurance contract was issued by National Life, an insurer iA Group acquired in 1988.
The application was heard by the Court of Queen's Bench in Saskatoon, Saskatchewan, in September. The parties are awaiting the court’s decision, iA says.
Last week, a report by short selling firm Muddy Waters Research revealed that Manulife Financial is facing similar litigation. The report predicts that if Manulife loses the case, it could suffer serious financial consequences.
iA Financial Group maintains that Ituna’s position is legally unfounded.
“Ituna's position would result in life insurance contracts being used as deposit accounts or commercial paper, purposes that are unrelated to life insurance and for which they were never intended,” iA mentions in a press release.
The insurer argues that its legal position is strong and expects that it will be successful in its defence.