The regulations of the Insurance Act set a limit on the amounts that secondary accounts associated with life insurance contracts can hold. The case of Mosten Investments LP v The Manufacturers Life Insurance Company (Manulife Financial), 2021 SKCA 36, involved the interpretation of the Saskatchewan Insurance (License Condition) Amendment Regulations, 2018, Sask Reg 75/2018, and universal life insurance policies issued or assumed by the respondent insurance companies.
The Saskatchewan Court of Appeal ruled that the 2018 regulations, which apply to all licensed insurers with respect to all life insurance contracts that are not variable insurance contracts , prevent such life insurers from receiving or accepting on deposit funds or payments in excess of the amounts required to pay the life insurance premium for the qualifying period under the contract and in excess of the required life insurance premium to keep the contract in force until the end of the period in situations where the contract is not exempt from tax payable.
The Insurance Amendment Act, 2021 confirms and codifies the Saskatchewan Court of Appeal’s decision, the statement said. Saskatchewan, in imposing retrospective limits on subsidiary accounts in its insurance legislation, followed the lead of provinces such as Alberta, New Brunswick and Nova Scotia.
The Insurance Law, which entered into force in 2020, is comprehensive legislation covering the general form and content of insurance contracts; which regulates the activities of insurers, insurance agents, representatives of insurers, managing general agents, third party administrators and claims adjusters; which includes implementing provisions; and which grants governance powers to the Superintendent of Insurance to promote compliance.