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The CCIR unveils a prototype of the statement of account customer segregated fund


Andrea Lubeck

June 15, 2018 09:45

The canadian Council of regulators of insurance (CCIR) has unveiled a prototype of a statement of account customer segregated funds, with the minimum information to be contained. Although a minimum content is required, it is not mandatory to adopt the prototype of a statement proposed by the organization.

The organization had announced last December in a statement of proposal that the segregated fund will be subject to a disclosure similar to that of mutual funds and the second phase of the Model of adviser-client relationship.

Among the information to be disclosed, clients will find a detailed presentation of the amount of the fee for the year in dollars and as a percentage, the rate of return staff total after deduction of the costs for different periods of time and the dollar amount of the compensation paid during the year in exchange for services related to the contract.

Extensive consultations

The CCIR is said to have conducted “extensive consultations with members of the sector and exhaustive testing with groups of consumers” to determine the minimum content and the format of the prototype.

The organization also emphasizes that it is the insurers who will need to ensure that consumers receive all of the new information, ” but they will enjoy a certain latitude in the shape and layout of their documents “. In particular, they will be able to adapt to what the language and the terminology match those of the insurance contract and the fund facts.

“As consumers will be able to see at the same time the summary information and the detailed information on the costs and performance of the segregated fund, in plain language, they will be more able to compare the products that are available,” says Patrick Déry, president of the CCIR. As advisors, they will be better equipped to discuss the performance and costs of segregated funds, with their customers. “

Reflect the increased transparency required

The CCIR advance that these new expectations reflect the increased transparency required in the financial services sector “.

He also points out that the similarities between the obligations of the segregated funds and mutual funds which go ” beyond the communication of information on the costs of distribution “. Rather, the objective is to harmonise the obligations regarding the transmission of updates of the overview of the fund, to establish a method of risk classification is consistent for both types of funds, and promote a standard of care equivalent to those who practice in the area of segregated funds or in collective investment schemes, specifies the CCIR.

The implementation will be deployed by the members of the CCIR in their respective territory. The agency intends to coordinate with the canadian securities regulatory Authorities of any future intervention and said that it will take account of their work on the communication of detailed information on the cost, a possible standard to act in the best interests, commissions and integrated management of the incentives.

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