Regulatory Alerts2007-06-29
Added · Updated
Notice 320 Management of Participating Life Insurance Business
Direct insurers licensed under the Insurance Act must establish an internal governance policy for participating funds, which requires annual board approval and review. The board of directors must assess the fairness of charge and expense allocations annually, while senior management and the appointed actuary hold specific responsibilities for setting guidelines, implementing safeguards, and documenting material reservations. The notice prohibits allocating certain marketing, distribution, and related-party expenses to participating funds unless specific conditions regarding fairness, consistency, and prior approval are met. Insurers must conduct annual expense studies using recognized actuarial methodologies and engage independent audits at least once every three years.
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