Intact joins world’s insurers in pilot UNEP FI taskforce to assess intensifying climate change impacts

To better protect communities and economies, and aligned with its core value of being socially responsible, Intact Financial Corporation (TSX: IFC) today announced it will be part of the United Nations Environment Programme Finance Initiative (UNEP FI) Task Force on Climate-related Financial Disclosures (TCFD) pilot.

The pilot brings together 16 of the world’s largest insurers to  better understand the impacts of climate change on their business – integral for the insurance industry in their role as risk managers.

In addition, Intact signed on to the UNEP FI Principles for Sustainable Insurance (PSI). The PSI is a global best-practice sustainability framework for the insurance industry to address environmental, social and governance (ESG) risks.

“Climate change is one of the most pressing public policy issues facing Canada and the world for the foreseeable future,” says Charles Brindamour, Chief Executive Officer of Intact Financial Corporation. “Being part of the TCFD insurer pilot will help us evaluate the impacts of climate change in a more standardized and transparent way – to help us build a stronger, more prosperous and resilient society.”

About Intact Financial Corporation
Intact Financial Corporation (TSX: IFC) is the largest provider of property and casualty (P&C) insurance in Canada and a leading provider of specialty insurance in North America, with close to $10 billion in total annual premiums. The Company has over 13,000 full- and part-time employees who serve more than five million personal, business, public sector and institutional clients through offices in Canada and the U.S. In Canada, Intact 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. In the U.S., OneBeacon Insurance Group, a wholly-owned subsidiary, provides specialty insurance products through independent agencies, brokers, wholesalers and managing general agencies.

SOURCE Intact Financial Corporation

5 more insurance firms sued for withholding HST from accident victims

By 

Five more Canadian insurance companies have been served with class action lawsuits — in addition to six others first reported by the Star this month — for withholding medical benefit HST payments from car accident victims in violation of the provincial regulator.

After just a week, scrutiny of the issue inspired some reconsideration by the industry, the Star’s investigation has found.

Co-operators, Wawanesa, Economical, Commonwell and Echelon were served individual lawsuits Thursday, each alleging $100 million in damages for HST costs on medical benefits that were passed on to claimants. The practice, according to the claims, is in defiance of repeated demands from the Financial Services Commission of Ontario (FSCO), which regulates the industry.

A week earlier, Intact, Aviva, Unifund Assurance, Belairdirect, Certas Direct and Allstate received nearly identical claims.

The 11 suits, which have not been certified or tested in court, now claim a total of $1.1 billion in damages.

Each statement of claim alleges the companies engaged in “unfair or deceptive acts or practices” by failing to pay or reimburse HST on medical benefits or by including HST in calculating a claimant’s benefit limits.

Since 2009, FSCO has issued a dozen notices and guidelines to the industry making clear HST on medical benefit claims is to be paid by insurers.

Spokespersons for all 11 companies either declined or did not respond to requests for interviews. Only Aviva issued a written statement earlier this month, saying the company “has followed the industry position on HST being included within the maximum benefit amounts … and continues to support this interpretation.”

A week later, new statements from two of the largest insurers signalled change.

A statement Thursday from Aviva spokesperson Fabrice De Dongo continued to defend the company’s HST policy but offered a more conciliatory tone:

“On behalf of our customers, we have actively and repeatedly sought clarification from the government regarding the tax handling on goods and services provided to our customers. This is part of our commitment to continually explore ways to reduce or eliminate complexity for them, and to increase trust in the insurance industry overall.”

An Oct. 18 email from an Aviva claims representative to a claimant — obtained by the Star — says FSCO’s direction to the industry on HST payments is “incorrect and inconsistent,” and says that the regulator’s statements “do not operate to create or change the law.”

“In the absence of legislative change or binding judicial authority to the contrary, Aviva intends to maintain its position that any applicable HST is inclusive of the benefit limit,” the email reads.

Aviva declined a request for comment on the email.

The Insurance Bureau of Canada, which represents the industry, declined to comment on the lawsuits. A statement from the association says the industry is “committed to working with government to provide clear, definitive guidance and to help return injured motorists to good health.”

FSCO is also named in the claims as a defendant for allegedly failing to ensure the “government-designed, mandatory insurance was operated fairly.”

The Star has obtained letters of complaint to FSCO — from injury advocates and the Ontario Trial Lawyers Association — dating back to 2015.

In an August 2016 response to the Trial Lawyers Association, FSCO chief executive Brian Mills wrote that the regulator continues to monitor the issue and that “those insurers who, to FSCO’s knowledge, have failed to pay HST … have indicated that they will follow the direction set out by (FSCO) in future.”

FSCO declined repeated requests for an interview. A written statement Friday said the agency is “aware of the recent statements of claim involving FSCO. As the matter is before the courts, FSCO is unable to comment further.”

Paul Harte, one of the lawyers involved in the proposed class actions, says the lawsuits have revealed there is no clear industry position on whether insurers should cover HST costs in car accident medical benefits.

“We have learned that some auto insurance companies have been following the rules all along. Others, such as Intact, have acknowledged their error and have agreed to change their policies. A handful of companies, including Aviva, continue to shortchange their customers. The marketplace may decide this issue before the courts.”

Harte said that since the Star’s first news story, the lawyers have been overwhelmed with calls and that the “unfair practices we identified appear to be widespread.”

Time to buy cattle price insurance

Market Update: Cow-calf producers should sell their feeders with the lofty futures and historically strong basis

By  | Grain News

Alberta packers were buying fed cattle in the range of $151 to $153 on a live basis in mid-October, up approximately $10 from a month earlier. While Alberta prices have been percolating higher, fed cattle values in Kansas have hovered around US$111 on a live basis over the past four weeks. Market-ready supplies of fed cattle in Western Canada appear to be tightening due to lower placements earlier in the spring. This has caused the Alberta fed cattle basis to strengthen.

Yearling prices continue to trade near 52-week highs. Medium- to larger-frame average-flesh 850-pound mixed steers were actively trading in the range of $203 to $210 in southern Alberta. Drier conditions throughout the summer caused cow-calf producers to market feeder cattle sooner than normal. This means available feeder cattle supplies in October and November are lower than anticipated.

U.S. cattle-on-feed inventories continue to run five to six per cent above year-ago levels. It appears fourth-quarter beef production will come in 200 million pounds above last year; similar year-over-year increases are expected in the first three quarters of 2019.

In Kansas, the fed cattle market has hovered around $111 on a live basis which is similar to the average price during October of 2017. The year-over-year increase in demand has offset the rise in production resulting in a similar price structure. Restaurant spending during October and November is expected to finish 10 per cent above last year while retail expenditures are projected to be up three to four per cent.

While the U.S. market has traded in a sideways range, Alberta fed cattle prices have been ratcheting higher through October. I want to draw attention to the placement by weight category during March and April. During March, placements in the 600- to 699-pound category were down 9,467 head from last year; during April, placements in the 700- to 799-pound category were down 11,379 head from April of 2017. This has resulted in lower market-ready supplies of fed cattle during October.

The Alberta and Saskatchewan cattle market has actually divorced from the U.S. for the time being. Basis levels for fed cattle are abnormally high due to the abnormal placement schedule during February through March. Secondly, strong fed-cattle prices in October have caused the feeder cattle basis to also reach historical highs.

Signal to sell

For cow-calf producers, a historically strong basis along with feeder cattle futures near 52-week highs is a signal to sell your feeder cattle. I also want to point out that the April live cattle futures have traded as high as $125 in early October. Over the past year, the live cattle futures have $101 and $130. The risk/reward suggests that there is more downside risk than upside, especially with the year-over-year increase in production.

Backgrounding operators will want to buy price insurance on calves immediately upon purchasing. The March feeder cattle futures reached a high of $155 earlier in October but have since dropped to $148. However, over the past couple of years, the high in the feeder cattle futures has been around $160 but the lows are around $130. It’s prudent to have price insurance this year given the year-over-year increase in the U.S. calf crop. Barley prices are also $50/mt above year-ago levels. The risk reward scenario suggests further downside moving into spring.

The abnormal placement structure during March and April has caused Alberta fed cattle basis to be abnormally strong for October. Feedlots currently have positive margins which has enhanced buying power for replacements. Many cow-calf operators marketed feeder cattle sooner than normal, therefore feeder cattle volumes during October and November are below year-ago levels in Western Canada. These two factors have contributed to the historically strong basis for feeder cattle.

Finally, the April 2019 live cattle futures are trading near 52-week highs which has also caused the November 2018 feeder cattle futures to also trade within the yearly high. Cow-calf producers should sell their feeders with the lofty feeder futures and historically strong basis.

The current environment is also telling backgrounding operators to buy price insurance on their feeder cattle. When you assess the risk/reward, we could see significant downside in the feeder market. The June live cattle futures are trading at a $7 discount to the April contract due to the sharp year-over-year increase in second-quarter beef production.

Insurance policies top November’s must-read list for Financial Literacy Month

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$30M class action lawsuit filed against Industrial Alliance

The law firm of Connolly Obagi LLP has today announced the commencement of a proposed $15 million Canada-wide Class Action against Industrial Alliance Insurance and Financial Services Inc. (“Industrial Alliance”), together with a claim for $15M in punitive and exemplary damages.

The proposed Class Action is brought by Kristy Armour, of Ottawa, Ontario, who was employed by the Federal Government for sixteen (16) years as an FI-4 (Manager, Financial Audit) until her medical retirement on October 29, 2016.

The proposed Class Members include all persons employed by the Federal Government, or who were employed by the Federal Government, and who received long term disability (“LTD”) benefits from Industrial Alliance under Group Policy No. G-2400 (previously identified as Group Policy No. G68-1400),  at any time dating back to November 1, 1968 through to the present date.

The claim alleges that Industrial Alliance incorrectly calculated the cost of living increase to which all Class Members were entitled on an annual basis.  It is alleged that Industrial Alliance calculated the cost of living increase based on the Class Members’ net LTD benefit after the application of deductions rather than against the Class Members’ gross LTD benefits prior to the application of deductions.

It is also alleged that Industrial Alliance knew that the manner in which it was calculating the cost of living increase, due and owing to the Class Members, was contrary to the terms of the Policy and that it wilfully mislead the Class Members in doing so.

If any person is employed by the Federal Government, or formerly employed by the Federal Government, and is in receipt of, or was in receipt of, LTD benefits from Industrial Alliance under the terms of the Policy identified herein, please email info@connollyobagi.com, subject line “INDUSTRIAL ALLIANCE CLASS ACTION”, and provide your name, group certificate number, history of employment with the Federal Government and your history of receipt of LTD benefits.

SOURCE Connolly Obagi LLP

5 million claimants expected benefit from reduction of Employment Insurance waiting period

The Government of Canada is commited to help the middle class and  those working hard to join it. As a result of changes made on January 1, 2017, the waiting period for Employment Insurance (EI) benefits has been cut to one week. Reducing the waiting period  provides more money for EI-eligible individuals when they become unemployed or leave work temporarily due to health or family pressures. By October 1, 2019, about five million cumulative claimants will have benefitted from this change.

Today, the Honourable Jean-Yves Duclos, Minister of Families, Children and Social Development, announced that this change has resulted in an estimated additional $650 million dollars a year.

For example, for an eligible claimant who is laid off, and subsequently finds work after 12 weeks, the change means that up to 11 weeks of EI benefits will be payable whereas only up to 10 weeks were payable in the past. The reduction of the waiting period applies to all types of EI benefits—regular, fishing, sickness, maternity, parental, compassionate care, Family Caregiver benefits.

This is just one part of the Government of Canada’s recent actions to provide workers, parents and caregivers with more flexible, inclusive and easier to access EI benefits. These include:

  • making the default rules of the most recent Working While on Claim pilot project permanent and extending them to EI maternity and sickness benefits;
  • providing a choice of duration of parental benefits;
  • providing additional weeks of EI regular benefits to eligible seasonal claimants in 13 targeted regions; and,
  • providing more opportunities for eligible EI claimants to upskill and enhance their employability while still receiving EI benefits.

Finally, new parental sharing benefits that provide additional weeks of benefits to families when parents of a newborn or newly adopted child share parental benefits will be available starting in March 2019.

Quote
“Every Canadian’s situation is unique. By providing support sooner, we are ensuring middle class families has the money they need, when they need it the most.  We are making EI caregiving, maternity and parental benefits more flexible, inclusive and easier to access, we are providing hard-working middle-class Canadian families with more options to better balance their work and life responsibilities.”
– The Honourable Jean-Yves Duclos, Minister of Families, Children and Social Development

Quick Facts

  • The reduction in the waiting period does not affect the speed of the first payment. The current standard of providing payment within 28 days, 80 percent of the time, continues to apply.
  • About two-thirds of claimants return to work before using all their weeks of entitlement.
  • The 2019 EI premium rate will be $1.62 per $100 of insurable earnings—a decrease of 4 cents for employees compared to the 2018 rate and an effective decrease of 5 cents for employers, who pay 1.4 times the employee rate.
  • It is estimated a cumulative total of about 2.2 million claimants would benefit from the Working While on Claim measure as of October 1, 2019.
  • The pilot project aimed at assisting seasonal workers is expected to help approximately 51,500 EI seasonal claimants annually.
  • With Skills Boost,it is estimated that about 7,000 adult learners per year will take advantage of the expansion of EI options to take training while continuing to receive EI benefits.

Associated Link

Reducing the two-week waiting period to one week

Employment Insurance Improvements

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