Legal notice to Assomption Vie

As part of our zero tolerance policy towards breach of ethics or law, we have send this legal notice to Assomption Vie

Mrs Plourde,

We have been informed of your statement made on the Finance-Investissement web site as to your company position in regards to life settlements. On behalf of your company, you stated you would cancel the life insurance policy if a policy owner decided to sell his policy to a third party under a life settlement. Here is your statement;

“Assomption Vie avait fait une sortie en novembre dernier, disant qu’elle annulerait toute police ainsi transférée. Jointe de nouveau, Marie-Josée Plourde, sa porte-parole, a réitéré la position de l’assureur acadien.” Translation: Assomption Vie made the statement in last November that it would cancel any policy that would be transferred on this basis. When reached again, Marie-Josée Plourde, spokeperson, has reiterated the position of this acadian insurer.

We are outraged by this statement. It shows a complete disregard for the law and we do not intend to sit idly by as your company attacks the integrity of an insurance contract which is based on Insurance Law and Contract law; laws that have been interpreted by many judges in many different court cases. Any 1-year law student would know that your statement is irresponsible, unethical and certainly not supported by law.

In fact, the majority position of the Justice Courts in Canada and the United States stated that the lack of an insurable interest could not be used to void a life policy after it has been issued even when sold to a third party. In Canada, this type of settlement would fall under the Incontestability provision found in the Insurance Act of all provinces. Whether or not a contract is voidable in the first two years of ownership if a change of ownership occurs would depend on the questions contained in your application in relation to any future change of ownership. After two years, the contract would only be voidable if you could prove fraudulent intent to the answer to this question. As a result, your statement is far from being accurate. YOU DO NOT GET TO CANCEL ANY LIFE CONTRACT BECAUSE YOU DO NOT APPROVE OF HOW THE POLICY OWNER IS USING HIS POLICY EVEN IF IT MEANS A LOWER PROFITABILITY…

We consider your statement to constitute a deceptive sale practice violating the Insurance Act of each province prohibiting this practice. This practice also violates the Federal Competition Act. In addition, what you are doing is highly unethical and goes against the application of contract law.

We have reviewed marketing materials from your company such as the product guide for your Universal Life. In this product guide, we have found nothing in writing describing your position against the transfer of a life policy to a third party under a life settlement option. There are no statements in regards to any restrictions pertaining to the rights of ownership of a policy owner. You are therefore deceiving consumers in buying life insurance policies from your company without telling them of your position of cancelling life policies if such transfer occurs. This constitutes a misrepresentation on the part of Assomption Vie.

The following actions need to occur before we act against your company:

1) For existing policy owners, retraction of your statement in the Finance-Investissement stating that you will respect the Insurance Act and contract law by not cancelling policies if a change of ownership occurs even if this is part of a life settlement

2) For new policy owners buying your policies of Assomption Vie, assuming that you want to continue maintaining your position against life settlements, you will modify all of your insurance contracts, applications and marketing materials to clearly indicate that you are limiting the rights of ownership of a policy owner. You may want to look at a life contract of RBC, to see how they limit transfer of ownerships in their policy owner contract.

Consumers have the right of disclosure and you are not respecting this right by hiding your position of unilaterally cancelling policies.

If you do not take the following actions, we will proceed to;

1) Publish through a press release as a Consumer Advisory Warning advising agents not to sell Assomption Vie and consumers not to buy policies of Assomption-Vie until your company has clearly stated that you will respect the law and the integrity of existing life insurance contracts.

2) We will make a complaint to each of the provincial regulator for the use of deceptive sales practices by having intentionally not disclosed to consumers buying one of your life policies that you would cancel such policy if you did not approve of a transfer of ownership.

3) We will make a criminal accusation under the Federal Competition Act against Assomption Vie for having entered into a criminal conspiracy for lowering COI of life insurance policies by limiting ownership rights of policy owners without disclosing such restrictions to the consumer.

Richard Proteau
Consumer Advocate
Financial Services Consumer Alliance

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