Clash brewing over genetic privacy as insurance industry tries to get as much data as possible to assess risk

Ian MacLeod, Ottawa Citizen

OTTAWA — A clash over genetic privacy and the insurance industry’s need for personal medical data to calculate risk marked the opening day of parliamentary hearings on a Senate bill banning genetic discrimination.

No other generation in human history has had the power to so profoundly investigate and tinker with the essence of life and some believe there should be limits on what people and companies can do with the discoveries, products and knowledge flowing from the rapid commercialization of genetic science.

The Senate human rights committee Wednesday heard how the technology capable of tremendous healing and hope also can be used to discriminate against those found to carry genes that predispose them to potentially developing certain diseases.

“Fear of genetic discrimination is stopping many Canadians from having genetic testing that their doctors believe would benefit them,” said Sen. James Cowan, who is making his third attempt at sponsoring Bill S-201 into law. “In Canada, unlike most other western countries, there is no protection for this.”

The bill would outlaw life and health insurers and others from requiring that individuals undergo genetic testing as a condition of doing business. It would ban requiring a person to disclose previous genetic test results or penalizing those who refuse to undergo the test. And it would add genetic discrimination to the prohibitions in Canada Labour Code and federal human rights and privacy acts.

Life insurance, disability insurance, mortgages and employment would be prime areas of concern.

Bev Heim-Myers of the Canadian Coalition for Genetic Fairness told the committee a key problem is that the insurance industry places too much emphasis in the results of genetic tests, which often indicate a person’s genetic predisposition to developing a disease or condition, but not whether they will actually go on to get the disease.

“If a person has a genetic test and it (reveals) a perceived future disability, who knows if it’s going to happen. Perhaps it won’t,” she said. “But the insurance industry or employers are looking at it and saying this (disease) is going to happen. (That’s) not equal.”

She said people who suspect they’re prone to a disease, “will choose not to be tested because of the risk of being uninsurable,” and won’t know to seek medical therapy or make lifestyle or other changes to try to offset their genetic predisposition to a particular disease.

Although Cowan’s bill does not mention the insurance industry, a battery of insurance executives and actuarial experts lined up before the committee to complain the proposed legislation would unfairly blind insurers to the degree of risk they are underwriting.

They argued insurers and prospective policy holders have an obligation to disclose any relevant health information so the contract is entered into on an “equal information” basis. The same, they said, as people now do when disclosing family histories, cholesterol, hypertension, coronary heart disease, cancer, diabetes and other conditions with a genetic component.

“An essential element for insurance to work properly is an equal access to information by both parties,” said Jacques Y. Boudreau, chair of committee on genetic testing for the Canadian Life and Health Insurance Association. “That is why offers to purchase a house are often subject to inspection, or why the seller of a car must disclose any significant collisions.”

An essential element for insurance to work properly is an equal access to information by both parties

But the proposed law creates a material imbalance of information, he said. “Receiving a bad result from a genetic test would be a strong motivator to acquire more insurance. Under the bill, one would be able to acquire insurance at the same price as the general public and well below its true costs, providing a strong incentive to purchase as much as possible.”

He said the industry is “deeply concerned” that a “vast majority” of the public will have to pay more for insurance as a result.

If the bill makes it through the Senate, then House of Commons and into law, the executives hinted at a constitutional legal challenge over federal incursion into an area primarily regulated by the provinces, which have no such legislation.

Cowan first introduced the bill in early 2013, but it died when Parliament was prorogued. He retabled the bill, but it was gutted last spring by the Senate’s Conservative-dominated human rights committee.

Source: National Post

Insurance that takes risk out of reps and warranties gains favour in weak economy

Drew Hasselback | Financial Post

Wherever there’s risk, there’s usually someone willing to insure it for the right price.

Early last year, we introduced you to a novel product popping up in M&A circles called “representation and warranty insurance” or RWI. Lawyers say the product is starting to become a common feature of private deals, particularly those in which a private equity fund is the purchaser.

Bryan Haynes, a lawyer in the Calgary office of Bennett Jones LLP who specializes in private and cross-border transactions, says 2015 was a “banner year” for the use of RWI.

“Three years ago, people didn’t know what it was and they looked at it with a little bit of suspicion and caution. But I think there’s a general acceptance now,” Haynes says. “There’s been a history now of policies being underwritten, of claims being made, and claims being paid. With that, there’s a general comfort level.”

RWI kicks in if a seller is asked to refund some of the purchase price because of a post-closing event that arguably runs contrary to the representations and warranties that were made during the deal talks.

It’s possible to negotiate a deal in which the seller would directly indemnify a buyer if need be. But this can be a hot topic in M&A negotiations. RWI was invented about 20 years ago to bridge indemnity valuation gaps that would otherwise sink deals.

Kurt Sarno, co-head of the private equity group at Blake, Cassels & Graydon LLP, says the weakening economy will likely broaden the cavern between vendors and buyers in negotiating such indemnification agreements. That makes RWI even more relevant today, he says.

“It can get deals across the finish line where, in times like this, the seller wouldn’t want to take the risks that a buyer wants it to hold in respect of indemnification obligations.”


In this day and age, it’s hard to conceive of any company either using or condoning the use of slavery and child labour. Yet the problem persists, at least on a global basis. According to the International Labour Organization, almost 21 million men, women and children work in some form of modern slavery.

Opposing this seems like a motherhood issue, but there’s a hard legal edge to this. Businesses who turn a blind eye to the issue run the risk of having slave labour pop up in their supply chains.

The Canadian Bar Association meets in Ottawa this weekend to consider several policy proposals. One matter on the agenda is a package of “model business principles” a company could adopt to ensure it avoids the use of forced labour, trafficked labour or illegal or harmful child labour in either its own operations or its supply chain.

Putting together the model code wasn’t as easy as you might think. For example, calling for a complete ban on child labour overlooks that there are many situations in which children might work in a family owned business, such as a farm, convenience store or restaurant.

Stephen Pike, a Toronto-based partner with Gowling Lafleur Henderson LLP,  approached a wing of the CBA that represents in-house and corporate lawyers, the Canadian Corporate Counsel Association, with the idea of putting the guideline together. The Canadian model business principles are based on guidelines issued by the United Nations and resemble principles recently adopted by the American Bar Association.

The proposed Canadian principles would be voluntary, and they’re designed so that companies can adopt them to suit their businesses. “They are more of a recommendation than a prescription,” Pike says.

It’s worth noting that some jurisdictions have legislated strict roles. California, for example, requires larges businesses operating there to disclose their efforts to eradicate human trafficking and slavery from their supply chains. The U.K. will mandate the publication of an annual statement on slavery and human trafficking, starting with corporate years that end after March 31 of this year.


Save the date: We can now tell you the 2016 Canadian General Counsel Awards gala will take place June 1 at the Fairmont Royal York in Toronto.

Nominations for the 12th annual CGCAs can be submitted via email ( until March 24. The honours, founded by the National Post and ZSA Legal Recruitment, are the only national awards designed exclusively to recognize excellence in Canada’s in-house counsel community.

The award website ( has a sample nomination form plus detailed information on the eight award categories. Dan Malamet of ZSA ( can also answer questions.

Canada’s Largest Provider of P&C Insurance, Intact Financial Corp, Makes Strategic Investment in Metromile


Today, Metromile, a pioneer in pay-per-mile car insurance in the United States, announced that Intact Financial Corporation (TSX: IFC) has made a strategic investment in Metromile. IFC is the largest provider of property and casualty insurance in Canada. The venture is in line with IFC’s long-term strategy to invest and partner with emerging and innovative businesses.

“Metromile is redefining the marketplace with its unique business model, innovations and smart technology offerings,” said Karim Hirji, Senior Vice-President, International & Ventures, Intact Financial Corporation. “This venture represents an exciting opportunity for Intact Financial to expand its core competencies which will ultimately enhance the customer experience.”

Metromile offers customers a pay-per-mile insurance option that saves low-mileage customers $500 on average each year. With 95 million low mileage drivers in the United States the company has an addressable market of more than $70 billion.

“At Metromile, we work to make owning a car easy and affordable for drivers,” said Dan Preston, CEO at Metromile. “In 2015, pay-per-mile insurance saved our customers an average of $500 per year, and the Metromile app helped customers diagnose their car issues, avoid thousands of parking tickets, and more. We are excited to partner with Intact Financial, who shares similar values in transparency, customer experience, and a technology-driven approach to insurance.”

Metromile currently offers pay-per-mile insurance in seven states including California, Oregon, Washington, Illinois, Virginia,Pennsylvania and New Jersey. Availability in these seven states means that 30 percent of drivers in the United States can now get car insurance coverage through Metromile.

Metromile also launched an innovative partnership with Uber earlier this year in California, Illinois and Washington and debuted an updated smart driving app experience including a new look and feel as well as data about trips, street sweeping alerts (in select cities), and parked location.

Since Metromile launched in 2011, the company has grown from a small team to more than 150 strong with headquarters in San Francisco and offices in Tempe, Ariz. and Boston. In the last few months, the company has also focused on growing its executive team, which included hiring Chief Financial Officer Joe Selsavage, Chief Marketing Officer James Moorhead and General Counsel John Orta as well as promoting former Vice President of Engineering, Jose Mercado, to Chief Technology Officer.

Policies are sold through Metromile Insurance Services LLC (the Managing General Agent for insurance policies) and are written by insurers in the National General Insurance Group.

About Intact Financial Corporation
Intact Financial Corporation ( is the largest provider of property and casualty insurance in Canada with $7.3 billion in premiums. With over 11,000 employees, the company insures more than five million individuals and businesses through its insurance subsidiaries and is the largest private sector provider of P&C insurance in British Columbia, Alberta, Ontario, Québec and Nova Scotia. The company distributes insurance under the Intact Insurance brand through a wide network of brokers, including its wholly owned subsidiary, BrokerLink, and directly to consumers through belairdirect.

About Metromile
Metromile is revolutionizing car insurance through technology with its pay-per-mile insurance model. By offering affordable car insurance, transparent pricing based on the miles you actually drive, data to optimize how you use your car, and instant access to detailed vehicle diagnostics via the driving app, Metromile is transforming car insurance — and car ownership — to be more intelligent, seamless, and accessible than ever before. Metromile is expanding across the US, and currently empowering drivers in California,Illinois, New Jersey, Oregon, Pennsylvania, Virginia and Washington. For more information, visit

SOURCE Metromile

Twitter:  Off work with a disability takes its toll – 78% say finances are tight & 81% upset while not working

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A.M. Best Assigns Rating to The Empire Life Insurance Company’s New Preferred Shares

A.M. Best has assigned an issue rating of “bbb” to the recently issued CAD 130 million non-cumulative rate reset Series 1 preferred shares of The Empire Life Insurance Company (Empire Life) (Kingston, Ontario, Canada). The outlook assigned to the rating is stable, which is consistent with the outlook for the existing ratings of Empire Life. (For further details, please see A.M. Best’s press release dated May 19, 2015).

Empire Life intends to use the net proceeds from the sale of the preferred shares for regulatory capital and general corporate purposes. The Series 1 preferred shares’ initial dividend rate is set at 5.75%, payable quarterly until April 17, 2021. Subsequent to this initial period, and every five years after, Empire Life will determine on the 30th day prior to the first day of the subsequent fixed rate period the annual fixed dividend based upon the five-year Canadian bond yield. A.M. Best notes that Empire Life’s overall financial leverage is expected to remain below 30%, while interest coverage is expected to remain above five times. Both measures are within A.M. Best’s guidelines for Empire Life’s current rating level.

The rating recognizes Empire Life’s continued earnings growth and sustainable market presence in Canada with multiple lines of business. Empire Life is among the 10 largest life insurance companies in Canada (based on general and segregated fund assets), although the company has a 6% market share or less in its three major product lines. Empire Life markets a broad range of life insurance and investment products, employee benefit plans and financial services to individuals, professionals and the small to medium group market through multiple distribution channels. Additionally, A.M. Best will continue to monitor the company, which has been challenged due to sustained low interest rates and recent equity market volatility given its large segregated fund block of business.

This press release relates to rating(s) that have been published on A.M. Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see A.M. Best’s Recent Rating Activity web page.

A.M. Best is the world’s oldest and most authoritative insurance rating and information source. For more information, visit

Copyright © 2016 by A.M. Best Company, Inc. and/or its affiliates. ALL RIGHTS RESERVED.


A.M. Best
Erik Miller, 908-439-2200, ext. 5187
Senior Financial Analyst
Edward Kohlberg, 908-439-2200, ext. 5664
Managing Senior Financial Analyst
Christopher Sharkey, 908-439-2200, ext. 5159
Manager, Public Relations
Jim Peavy, 908-439-2200, ext. 5644
Assistant Vice President, Public Relations

ICBC’s Hall of Shame: Cyber Fraud Files of 2015

ICBC’s Hall of Shame: Cyber Fraud Files of 2015

A woman too hurt to go to work yet finds time for roller derby, a man who sets his own truck on fire then tries to make a claim, and a man who completes a grueling 12-mile obstacle race despite claiming to be severely injured — these are just three phony cases caught by ICBC, using evidence found publicly available online. Many of those who exaggerate claims expose their own lies by posting photos and updates on their social media profiles that are inconsistent with their claims.

Insurance industry estimates indicate 10 to 20 per cent of auto insurance claims contain an element of fraud or exaggeration. Meaning, fraudulent claims like these cost B.C. up to $600 million each year, or every driver more than $100 on their annual insurance policy.

In order to combat fraud and keep costs down, ICBC has enhanced its Special Investigations Unit by taking many of its investigations online. Last year, 2350 cyber cases were opened. ICBC has also beefed up its training program to help frontline staff detect fraud, and later this year, ICBC will purchase special fraud software that will help to quickly flag patterns and high predictors of fraud at the beginning of the claims process.

While the vast majority of ICBC’s customers are honest, there are some drivers that choose to exaggerate or make false claims. ICBC’s anti-fraud campaign intends to raise awareness about fraudulent insurance claims and its financial impact to all B.C. drivers.

Here are some cases that happened in 2015 of people caught red-handed online:

Roller Derby Ruse
After getting into a crash, a woman complained that her injuries were preventing her from going back to work as a hairdresser. But according to her Facebook and Twitter accounts, although she may not have been able to go to work, she still had the energy to go hiking, running, and join a roller derby team. A rising star on the rink, her updates regaled the many injuries she incurred as one of the ‘hardest hitters’ on the team. When confronted with the evidence, the woman agreed fair compensation was about half of what she was originally demanding, and she settled her claim.

Kung Fu Cure
A Lower Mainland man claimed that he was unable to go back to his desk job due to his injuries, following a collision in Vancouver. Shortly after his claim was submitted, investigators found pictures of him on Facebook showcasing his athletic prowess, while supposedly recovering from his crash. In one photo, posted by a friend, he’s seen crossing the finish line of a grueling 12-mile obstacle race in Whistler. In another, it’s a video of him taking down an opponent at a mixed martial arts facility. After the evidence was shown to him, he quickly settled his claim, citing a miraculous recovery from his injuries.

When There’s Smoke…
A Kamloops man reported to police and ICBC that his truck – which he claimed was in good working condition – had been set on fire by vandals. The representative who took his claim smelled smoke, so ICBC’s cyber investigators did some digging and found the same truck listed for sale on Craigslist. In the description, the owner revealed his motive when he wrote that he was putting his vehicle up for sale because he couldn’t afford to pay for the repairs his truck sorely needed. Furthermore, the estimator inspecting the vehicle uncovered physical evidence confirming that the fire was suspicious. The man was denied payment on his claim, and was left with an idle truck.

Million Dollar Mischief
A Kelowna woman was involved in a minor MVA when she was hit by a motorcycle while walking in a crosswalk with friends. The case went to trial where she demanded $1M for her injuries. In court, the judge heard the woman make inconsistent statements, and found the reports from her father and medical providers contradictory to her claims as well. ICBC investigators also submitted social media posts that challenged her claims. As a result of the overwhelming amount of evidence that showed she had grossly exaggerated her injuries, the judge denied her $1M request and awarded her only $20,000 for her actual injuries. She was also required to pay for ICBC’s legal costs – about $34,000.

Insurance fraud increases claims costs, which leads to higher premiums for every British Columbian needing auto insurance.

The public can protect their wallets by reporting suspicious activities related to insurance fraud to ICBC’s toll-free tips line at 1-800-661-6844. Tip information is confidential and callers can remain anonymous.

Media contact:
Joanna Linsangan

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