The Canadian Council of Insurance Regulators (CCIR) has released its final version of the proposed minimum required content for the client account statement (Appendix IV), for segregated funds along with a prototype client account statement.
The release of the prototype follows the Canadian Council of Insurance Regulators (CCIR) publication in December 2017 of a position paper on segregated funds, which outlined the regulators' expectations with respect to the information to be provided to seg fund contract holders.
Not a prescribed form
In a June 14 statement, the CCIR underlined that it is not introducing a prescribed form for segregated funds disclosures. "Insurers will be expected to ensure that consumers are provided with all of the new information outlined in Appendix IV, and they will have flexibility in terms of the layout and look of their disclosure documents," says the CCIR. Insurers are also expected to adapt their disclosures to ensure that the language and terminology are consistent with the insurance contract and Fund Facts documents.
The CCIR underlines that the new seg fund disclosure expectations come at a time of increasing demands and requirements for a greater degree of transparency in the financial services industry, including around costs.
Will better assist advisors
"The prototype statement provides guidance for insurers with respect to the expectations of the regulators about how the required disclosure is presented," said Patrick Déry, Chair of the CCIR. "Consumers will be able to see both summary and detailed information on cost and performance of segregated funds, in plain language, and thus will be better able to compare the products that are available to them. This information will better assist advisors in discussing segregated fund performance and costs with their clients."
The CCIR says that when implemented, the expectations outlined in its position paper, will provide consumers with a more consistent experience when purchasing segregated funds and mutual funds.