Genworth Canada says it won’t follow CMHC in tightening mortgage insurance eligibility

TORONTO _ Genworth MI Canada Inc. says it’s holding steady on its credit score qualifications, despite a move by one of its main competitors to toughen mortgage lending standards.

The Oakville, Ont.-based company said Monday its insurance subsidiary, which is among the country’s largest insurers to residential mortgage lenders, “has no plans to change its underwriting policy, related to debt service ratio limits, minimum credit score and downpayment requirements.”

The announcement follows a move by the Canada Mortgage and Housing Corporation last week to raise the bar on its lending standards, making it more difficult for some to borrow money for a home purchase.

CMHC’s qualifying credit score for mortgage insurance was increased to 680 from 600, as part of changes that take effect on July 1. Limited gross and total debt servicing ratios were raised to standards of 35 per cent and 42 per cent, respectively.

Household debt service ratios measure how much income goes to paying interest and principal.

Stuart Levings, president and CEO of Genworth Canada, said the insurer believes its processes and monitoring of conditions and market developments “allow it to prudently adjudicate and manage its mortgage insurance exposure to this segment of borrowers with lower credit scores or higher debt service ratios.”

Companies in this story (TSX:MIC)

Canada’s Film & TV Industry Presents Unique Insurance Solution with Government Support

The excerpted article was written by Manori Ravindran | Variety

Canada’s production community is working towards a bespoke insurance solution as the country looks to jumpstart production after it ground to a halt in March amid the coronavirus outbreak.

Variety can reveal that producers’ trade body, the Canadian Media Producers Association (CMPA), is developing a proposal for a “market-based solution” that asks the federal government to serve as a backstop for coronavirus insurance claims.

An update from the CMPA sent to producers on Monday and seen by Variety details a plan in which producers would pay premiums to access COVID-19 coverage, which would then go into “a dedicated pot to pay for potential claims.”

“The government would only contribute financially if the funds generated [through] the sale of the policies was insufficient to cover the claims made,” reads the memo.

In Canada, like most other countries, insurers are refusing COVID-19 coverage for the production sector. “Left unaddressed, this would mean the financial consequences associated with another industry-wide shutdown, or an on-set COVID-19 incident, would fall primarily to the producer,” said the CMPA, warning that the repercussions of these scenarios would be “potentially devastating” to the sector and threaten its prospects of a smooth restart.

The org has now raised the insurance issue with the government and is to submit a “detailed proposal” in the coming days, outlining what it calls an “industry-wide solution.”

A CMPA spokesperson told Variety: “Without the availability of insurance policies to cover future COVID-19 risks, most production in Canada will not resume. A government-backstopped insurance program will provide confidence to the marketplace, encouraging insurers to offer COVID-19 coverage, allowing producers to purchase policies, and ultimately allowing Canada’s production sector to re-open, once it is safe to do so.”

In recent weeks, the CMPA has hinted at plans to develop a “made-in-Canada solution” to cover productions post-shutdown. The group has been examining international insurance solutions, such as France’s indemnity fund — a $54 million fund that will cover up to 20% of a project’s budget and work on a case-by-case basis — as well as programs being proposed in the U.K. and other territories.

The CMPA said previously that it was also looking at tax credits, shared risk pools and government liability protections.

As revealed by Variety last week, the U.K. recently submitted a proposal to the government for a guarantee around coverage of suspension or abandonment costs relating to COVID-19. This could manifest in the form a government-backed fund that may amount to hundreds of millions of pounds.

The CMPA estimated in April that Canada’s production shutdown put around 172,000 jobs at risk, and could ultimately cost the Canadian film and TV sector — whose service industry supports myriad Hollywood shoots in provinces such as British Columbia and Ontario — around CAD$2.5 billion ($1.8 billion) in both domestic and foreign production dollars if it continues until the end of June.

There is, however, finally some light at the end of the tunnel, with the first signs of production resuming post-shutdown. Manitoba became the first province to allow its production sector to restart as of Monday, with local soundstages opening back up for business.

The first wave of renewed production in Canada is expected to focus on domestic projects due to the limitations posed by mandatory quarantine periods for inbound travel, making it tricky for any international projects, particularly U.S. studios, looking to shoot up north.

Source: Read more articles like this at Variety

CMHC tightens lending standards to protect housing market during COVID 19

By Tara Deschamps

THE CANADIAN PRESS

TORONTO _ Canadians looking to borrow money for a home purchase a home are in for some extra challenges after the Canada Mortgage and Housing Corporation announced changes to its lending standards on Thursday.

The country’s national housing agency is increasing the qualifying credit score for mortgage insurance to 680 from 600 and limiting gross and total debt servicing ratios to their standards of 35 per cent and 42 per cent, respectively.

“COVID-19 has exposed long-standing vulnerabilities in our financial markets, and we must act now to protect the economic futures of Canadians,” CMHC head Evan Siddall said in a statement.

“These actions will protect homebuyers, reduce government and taxpayer risk and support the stability of housing markets while curtailing excessive demand and unsustainable house price growth.”

Under the changes effective July 1, CMHC will also no longer treat non-traditional sources of down payment funding, such as a personal unsecured line of credit, as equity for insurance purposes.

It will also suspend refinancing for most multi-unit mortgage insurance.

The move comes just weeks after Siddall appeared before the Standing Committee on Finance in Ottawa to warn of trouble ahead for the housing market.

‘Our support for homeownership cannot be unlimited,” he said.

“Homeownership is like blood pressure: you can have too much of it. Housing demand is far easier to stimulate than supply and the result, as we’ve seen, is Economics 101: ever-increasing prices.”

The majority of mortgages insured by the CMHC will not be affected by the more stringent qualifications.

In the fourth quarter of 2019, the average debt servicing ratios were well below the 35 per cent and 42 per cent thresholds, and depending on the metric, between 63% and 82% of all qualifying mortgages were below the limit.

Spokesperson Leonard Catling said the changes “were not made because of our current book of mortgage insurance business, rather to maintain its integrity.

“High household indebtedness continues to be a concern and the COVID-19 pandemic has exposed the long-standing vulnerabilities in our financial markets.”

The CMHC forecasts a decline of between nine per cent and 18 per cent in average house prices over the next year because of higher mortgage debt and increased unemployment.

Siddall warned the finance committee a growing debt deferral cliff could be headed Canada’s way in the fall, when some jobless Canadians will need to start paying their mortgages again after deferrals run out, and as much as one-fifth of all mortgages could be in arrears if the economy has not recovered sufficiently, he warned.

“We need to avoid exposing young people and through CMHC, Canadian taxpayers to the amplified losses that result from falling house prices,” he said.

“Unless we act, a first time homebuyer purchasing a $300,000 home with a 5 per cent down payment stands to lose over $45,000 on their $15,000 investment if prices fall by 10 per cent,” he said.

This report by The Canadian Press was first published June 4, 2020.

Intact Financial Corporation announces retirement of Martin Beaulieu as Chief Risk Officer and appointment of Benoit Morissette as Chief Risk & Actuarial Officer

Read more

CPA Canada hit by cyberattack affecting data of more than 329,000

TORONTO _ A cyberattack on the Chartered Professional Accountants of Canada website has affected the personal information of more than 329,000 members and stakeholders, the organization said.

The information includes names, addresses, emails and employer names, but passwords and credit card numbers were protected by encryption, CPA Canada said.

It warned the data could be used in email phishing scams and encouraged those affected to  “remain vigilant.”

The attack by  “unauthorized third parties” occurred between Nov. 30 and May 1, according to an internal investigation carried out with the help of cybersecurity experts.

The organization said it beefed up its security measures and contacted the Canadian Anti-Fraud Centre and privacy authorities after learning of “a possible security incident” the week of April 20.

“Upon discovering this, CPA Canada took immediate steps to secure its systems and conduct a thorough analysis to determine what information may have been involved,” the group said in an email.

“There is no evidence that the encryption keys were affected in this incident and we have no reason to believe the encryption was compromised.”

The personal information relates mainly to the distribution of CPA Magazine and everyone affected has been notified, the organization said.

Hacks against a wide range of companies since 2018 have included medical test laboratory LifeLabs and credit union Desjardins, which combined saw the theft of the personal information of more than 19 million Canadians.

 

BC Issues New Orders And Guidance To Employers For Phase 2 Of Its Restart Plan

The excerpted article was written
McCarthy Tétrault LLP

As BC begins Phase 2 of its Restart Plan, the Provincial Health Officer and WorkSafeBC (“WSBC”) have published the following orders, guidance and resources relevant to employers.

Orders by the Provincial Health Officer

On May 14, 2020, Dr. Henry issued an order cancelling her earlier April 16, 2020 order that operators close all personal service establishments and stop providing personal services in any location. Personal service establishments may open effective May 19, 2020.

On May 14, 2020, Dr. Henry enacted an order regarding workplace safety plans (the “COVID-19  Safety  Plans“). Under the order, an employer must post a copy of its COVID-19 Safety Plan on its website, if it has one, and at all of its workplaces so that it may be reviewed by workers, individuals who attend the workplace and members of the public. On request, an employer must also provide a copy of its COVID-19 Safety Plan to a health officer or a WSBC officer.

On May 15, 2020, Dr. Henry issued an order allowing restaurants and bars to open subject to conditions, including implementing physical distancing measures. Patrons must be able to maintain a distance of two metres from staff as well as one another, unless they are in the same party. Further, establishments cannot exceed 50 percent of their usual capacity of patrons present at one time, and they cannot hold events that include more than 50 people. If practicable, establishments must retain contact information for one member of every party of patrons for thirty days in the event that the medical health officer needs it for contact tracing. Finally, nightclubs must remain closed. The order came into effect on May 19, 2020.

The Provincial Health Officer may take enforcement action against any party that violates these orders under Part 4, Division 6 of the Public Health Act.

Recent Guidance

The BC Ministry of Health and the BC Centre for Disease Control recently published guidance for employers and workers in various sectors, including natural resources, farming and hotels.

The guidance for natural resource sector work camps includes conducting a COVID-19 workplace risk assessment for field operations, worker education, increased hygiene and cleaning practices, physical distancing, transportation for workers, guidance for workers while working, guidance for workers during breaks or while in communal spaces, guidance for situations where maintaining physical distance of two metres is difficult, guidance on handling tools and equipment, guidance on COVID-19 and worker accommodation, information regarding First Nations and First Nations Health Centres, physical distancing and local communities, information about face masks, and what employers must do to monitor worker health.

The guidance for farms and farm workers includes conducting a COVID-19 workplace risk assessment for the farm operation, worker education, guidance for training workers and employers on hygiene, guidance for increased hygiene, guidance for increased cleaning, physical distancing, transportation for workers, guidance for workers while working, guidance for workers during breaks or while in communal spaces, guidance for situations where maintaining physical distance of two metres is difficult, guidance on handling tools and equipment, guidance on COVID-19 hygiene and worker accommodation, information regarding First Nations and First Nations Health Centres, physical distancing and local communities, information about face masks, and what employers must do to monitor worker health. The guidance acknowledges that physical distancing between farm workers may be difficult in certain situations. Where workers are required to work together in close proximity to complete tasks, employers should form work pods (of six or fewer workers, if possible) to limit close contact within a small group. Similarly, where workers are required to travel together in vehicles to the work site, workers must travel in designated vehicles with their work pod and frequently clean and disinfect vehicles.

Guidance for the hotel sector covers general cleaning, housekeeping and laundry, waste management, food and beverage services, spas and salons, pools, fitness centres and playgrounds, staff health, and communication, signage and posters.

WSBC Guidance and Resources

WSBC has recently issued guidance relevant to Phase 2, including about COVID-19 Safety Plans, controlling exposure of the virus to workers, and new communication and training requirements.

COVID-19 Safety Plans

Employers must involve frontline workers, joint health and safety committees and supervisors when creating protocols for their workplace. WSBC has published a six-step process to help employers create their COVID-19 Safety Plan. The WSBC template is a fillable PDF that employers can use to develop their policies, guidelines and procedures. Employers are not required to have a formal plan in place prior to beginning operations, but are expected to develop their COVID-19 Safety Plan while taking steps to protect their workers’ safety. WSBC will consider enforcement measures if employers fail to take measures to protect workers from COVID-19.

Controlling Exposure

Employers should develop policies on who can be at the workplace, including policies on sick workers and recent travel. Employers do not have to implement health monitoring, such as temperatures checks or medical questionnaires, and should be aware of privacy issues if they choose to collect potentially sensitive medical information. WSBC notes that wearing masks is not mandatory for workers outside healthcare workplaces, and that masks and other personal protective equipment (“PPE”) should not be used as the only control measure. Instead, employers should offer the following types of protection, listed in order of greatest efficacy: i) eliminate risks (i.e. by limiting the number of workers at any one time, and enforce physical distancing), ii) implement engineering controls (i.e. installing barriers such as Plexiglas to separate people), iii) establish administrative controls (i.e. cleaning protocols) and iv) supply PPE such as non-medical masks.

Communication and Training

Employers should provide information to workers describing how they are managing COVID-19, including COVID-19 symptoms and a reminder not to go to work if workers have them, occupancy limits in common areas and other physical distancing measures, how specific tasks have been changed to prevent the potential spread of the virus, and instructions about hygiene. Employers are also responsible for training workers in tasks that they have changed as part of their COVID-19 Safety Plan, such as limits on the number of people in certain areas of the workplace and cleaning expectations for common areas and equipment. Where workplaces interface with customers, employers should consider adding signage, floor markings and other directions to ensure customers are maintaining physical distance from workers.

Source: Mondaq

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