Quebec National Assembly exterior

In its pre-budget submission, the Canadian Life and Health Insurance Association (CLHIA) is calling on the Quebec government to protect seniors by prohibiting speculative trading in life insurance policies.

Speculative trading can take the form of life settlement transactions, viatical settlements or stranger-owned life insurance (STOLI).

These types of transactions should be banned in Quebec, CLHIA says, as they often target vulnerable clients, and may be exploiting their short-term need for money.

“This phenomenon is on the rise in Quebec,” CLHIA says in its submission. “Indeed, unregulated groups are working to develop a market around the trafficking of life insurance policies for commercial or speculative purposes. The promoter’s profit depends on how early the insured dies: the sooner the person dies after the purchase of the policy by the promoter, the higher the profit from the investment (purchase).”

According to CLHIA, these sorts of transactions are a particular threat to seniors.

“Quebec’s population is aging. Seniors in the province live longer, and their financial circumstances are more precarious. Their risk of dementia is higher. Financial mistreatment is unfortunately on the rise. These factors conspire to make seniors an ideal target for those groups specialized in life settlements,” it warns.

“The risk is real. Is Quebec destined to become a safe haven for life settlements? The government must urgently prohibit this practice to stop it from taking hold in Quebec, and work with our industry to define an effective and sustainable solution,” CLHIA says.

In its submission, CHLIA also calls on the Quebec government to lighten the province’s tax burden, and reduce taxes on insurance in particular.

CLHIA also says it supports “any government action on climate change aimed at reducing air pollution and emissions of greenhouse gas and protecting our lakes and waterways.”