Twitter: Off work with a disability takes its toll – 78% say finances are tight & 81% upset while not working
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 www.ambest.com.
Copyright © 2016 by A.M. Best Company, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
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
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.
Aviva Canada works with police to fight fraud and lay charges in false theft report cases
Manulife announced that it has appointed Glenn Hollis as Senior Vice-President and Chief Marketing Officer, Canadian Division for Manulife. Reporting to the President and CEO of Manulife Canada, Marianne Harrison, Hollis will also be a member of the Canadian Division Executive Leadership Team.
“Manulife is innovating to create new and extraordinary customer experiences to set us apart from the competition and become a leading disruptor in our industry,” said Harrison. “Glenn brings transformational leadership to execute a truly innovative and integrated marketing strategy that builds on our brand in Canada.”
Glenn Hollis was most recently with Level 5 Strategy Group as a Senior Strategic Consultant working on various businesses and also directly, through his own consultancy practice, with WestJet as a client. From 2007 to 2015, he was Vice President, Marketing, Brand Strategy and Guest Experience (Canada, USA, & International) with Tim Hortons. Prior to his tenure at Tim Hortons, Hollis worked at the Canadian operations of some of the world’s leading advertising agencies, including J. Walter Thompson, Young and Rubicam, BBDO, and Saatchi & Saatchi.
Manulife Financial Corporation is a leading international financial services group providing forward-thinking solutions to help people with their big financial decisions. We operate as John Hancock in the United States, and Manulife elsewhere. We provide financial advice, insurance and wealth and asset management solutions for individuals, groups and institutions. At the end of 2014, we had 28,000 employees, 58,000 agents, and thousands of distribution partners, serving 20 million customers. At the end of September 2015, we had $888 billion (US$663 billion) in assets under management and administration, and in the previous 12 months we made more than $23 billion in benefits, interest and other payments to our customers. Our principal operations are in Asia, Canada and the United States where we have served customers for more than 100 years. With our global headquarters in Toronto, Canada, we trade as ‘MFC’ on the Toronto, New York, and the Philippine stock exchanges and under ‘945’ in Hong Kong. Follow Manulife on Twitter @ManulifeNews or visit www.manulife.com or www.johnhancock.com.
SOURCE Manulife Financial Corporation
For further information: Media Contact: Sean B. Pasternak, Manulife, 416-852-2745, email@example.com; Investor Relations: Robert Veloso, Manulife, firstname.lastname@example.org, 416-852-8982
Article by Jamie Spotswood
Covenants to insure in commercial leases are special. They obligate a party to obtain insurance. But what makes them special is that they are interpreted to relieve the other party of liability for breaches of that party’s obligations under a lease that relate to the risk being insured against. While it is true that a covenant to insure is one of several clauses in a lease that allocates risk between the landlord and tenant, the covenant often trumps the other clauses that are intended to assign risk when it is engaged.
The law is settled that in a landlord and tenant relationship a covenant to insure prevents the party who agreed to obtain insurance from successfully suing the other party for damages caused by the risk being insured against even if the other party would otherwise be liable for the loss. Subrogated claims in this regard are also barred. The commercial rationale for the immunity is that the party who obtains the insurance assumes the risk of the loss covered by the insurance. The insuring party must deal with its insurer for the loss not the other party to the lease.
The broad scope of the immunity is limited by the terms of the lease. Claims that can be characterized as being unrelated to the obligations in the lease may prevail even if the loss that is the subject of the claim flows directly from the risk of peril that the insurance was intended to cover. This is because the covenant to insure in a commercial lease operates as a matter of contractual law not insurance law, as the Court of Appeal for Ontario emphasized in Madison Developments Limited et al v. Plan Electric Co.,  O.J. No. 4249.
By way of example, a tenant’s claim against a landlord for breach of quiet enjoyment pursuant to a lease following a fire loss would be barred by a covenant to insure against the risk of fire. On the other hand, a claim based on a pre-contractual representation that arises out of the same fire loss may prevail notwithstanding the presence of a covenant to insure in the lease. The misrepresentation claim may proceed to the extent that the alleged misrepresentation does not engage the terms of the lease.
The Court of Appeal for Ontario recently considered this issue and the scope of a covenant to insure on an appeal from a motion to strike in D.L.G. & Associates Ltd. v. Minto Properties Inc.,  O.J. No. 5494. The tenant, D.L.G. & Associates Ltd., had covenanted to obtain “all risk” insurance which included the risk of sewer back-up. The tenant alleged that during the lease negotiations the landlord represented to it that the plumbing was in good order and it relied on these representations to its detriment. After a sewer back-up occurred, the landlord represented that the plumbing was in good repair going forward and that it carried out the necessary repairs, when in fact it had not done so. A second sewer back-up occurred. The tenant sued the landlord.
The tenant advanced claims in breach of contract, negligence, and negligent and fraudulent misrepresentation. The landlord moved to strike the claims, in part, on the strength of the covenant to insure. The motion judge held that it was plain and obvious that the tenant’s claims in breach of contract, negligence, and negligent misrepresentation were barred by the covenant to insure. It was not plain and obvious that the fraudulent misrepresentation claim could not succeed. The tenant appealed.
The Court of Appeal allowed the appeal in part, holding that the motion judge erred in striking the negligent misrepresentation claim. Writing for the Court, Justice Doherty stated that the “covenant to insure was intended to assign risk within the operation of the contractual relationship between D.L.G. and Minto. The alleged tortious conduct, be it fraudulent or negligent, occurred outside of that relationship.” Thus, it was not plain and obvious that the negligent and fraudulent misrepresentation claims must fail.
It is somewhat counter-intuitive to think that the result may have been different if the lease contained a specific representation or warranty from the landlord that the plumbing was in good working order and had been repaired. Of course, the intent of such a representation would be to assign the risk of a faulty sewer system to the landlord. Had such a representation been included in the lease, the alleged misrepresentation claim would arguably come within the ambit of the contractual relationship and would be barred by the covenant to insure as a result.
D.L.G. Associates Ltd. underscores the importance of reading covenants to insure together with other clauses in the lease to fully understand how the parties to the lease intended to allocate risk as between them when litigation arises.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.