CLHIA Comments on BIA Statutory ReviewRelease Date: 07/21/2014 Staff Reference: Frank Zinatelli
July 21, 2014
Mr. Paul Halucha
Marketplace Framework Policy Branch
235 Queen Street, 10th Floor, East Tower
Dear Mr. Halucha:
The Canadian Life and Health Insurance Association (CLHIA) appreciates the opportunity to provide input on the Statutory Review of the Bankruptcy and Insolvency Act and the Companies' Creditors Arrangement Act.
Established in 1894, CLHIA represents companies which together account for 99 per cent of Canada's life and health insurance business. The industry, which provides employment to more than 150,000 Canadians and has investments in Canada of $646 billion, protects more than 27 million Canadians through products such as life insurance, annuities, RRSPs, disability insurance and supplementary health plans. It pays benefits of over $76 billion a year to Canadians and administers about 60 per cent of Canada's pension plans.
This letter provides brief comments on a variety of the topics raised in the Discussion Paper. While most of our comments relate to the Bankruptcy and Insolvency Act (BIA) and the Companies’ Creditors Arrangement Act (CCAA), we also suggest how the Winding-up and Restructuring Act should be treated.
Consumer Exemptions: Registered Savings Products
The CLHIA supports the extension of enforcement exemptions to registered education savings plans (RESPs) and registered disability savings plans (RDSPs) in a similar manner to the protection afforded to registered retirements savings plans (RRSPs). This protection would be consistent with the intended purpose of these programs, which is to help ensure that personal/family savings are used to provide funding for post-secondary students or the disabled. As noted in the Discussion Paper, there is potential for abuse but we agree with the identified mitigators for RDSPs. In addition, RESPs are subject to annual contribution limits and there is a lifetime contribution limit of $50,000 for each beneficiary with tax penalties for excess contributions, which would help minimize opportunities for abuse...