|
February 2020 Charity & NFP Law Update CAGP Provides Update on Gifts of Life Insurance in B.C. In November 2019, Canadian Association of Gift Planners (“CAGP”) reported that British Columbia’s then-regulator for the Insurance Act, the British Columbia Financial Institutions Commission (“FICOM”), now the BC Financial Services Authority (the “BCFSA”), had provided a BC charity with an enforcement letter advising that it had contravened the Insurance Act when it accepted a life insurance policy donation from a BC resident. The enforcement letter indicated that the acceptance of life insurance policies was considered “trafficking” in contravention of the Act, and that charities could not solicit or accept donations of life insurance policies from BC residents. FICOM instructed the charity to specifically note on its website that BC residents cannot donate life insurance policies. CAGP has now released an update on gifts of life insurance policies on February 25, 2020. The update states that CAGP had also been informed of a second charity that had received a similar warning from FICOM. As it has been common for charities to solicit and accept donations of life insurance policies, CAGP indicates that the BCFSA’s current stance is concerning. Although the matter is currently relegated to BC, this issue could also emerge in other Canadian jurisdictions because equivalent provincial insurance statutes contain similar language. In providing further clarity, CAGP indicates that: 1.Despite efforts to gain clarity from the BCFSA on the matter, little clarity is available to date. The BCFSA is now reviewing the matter and will provide a response upon completion. 2.This issue pertains only to situations involving the transfer of an insurance policy itself, and not situations where the donor remains the owner of a policy and names the charity as a beneficiary of that policy. 3.Insurance companies have provided differing views on the meanings of the enforcement letters, adding to the confusion concerning what may be permissible. 4.Donors and charities should both seek legal advice where gifts of life insurance are being considered, other than where a charity is being designated as a beneficiary. CAGP will continue to monitor the issue, and will provide clarification as it becomes available, a hugely valuable service to the charitable sector. Competition Bureau’s Role in Digital Advertising: Implications for Charities and Not-for-Profits |
Subscribe
TO OUR NEWSLETTER & STAY UP-TO-DATE