Rudy Maharajh, FSA, FCIA

2008 General MeetingAssemblée générale 2008

Toronto, Ontario

Rudy Maharajh, FSA, FCIA

2008 General MeetingAssemblée générale 2008

Toronto, Ontario

Canadian Institute

of Actuaries

Canadian Institute

of Actuaries

L’Institut canadien desactuaires

L’Institut canadien desactuaires

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Group Living BenefitsGroup Living Benefits

• Marketplace

• Characteristics of Our Company

• Product Considerations

• Product

• Experience to date

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Group Living BenefitsMarketplace

• Prior to 2007:– Brokers, TPAs, consultants, reinsurers– Focus on cost containment– No significant CI sales trends

• 2007 and thereafter:– Market Pressure – brokers, TPAs, consultants – Increasing trends in illnesses – Focus still on cost containment – Signs of increasing CI sales

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Group Living BenefitsCharacteristics of Our Company

• Coverage offered • Target market • Size of company • Size of block of business• Resources

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Group Living BenefitsProduct Considerations:

• Differentiation• Expedite sale with limited work• Apply only to employee • Cover the top 10 illnesses representing more than 90% of

all claims today– Implication is that we cover at least heart attacks, stroke and

cancer

• Pre-existing condition – Minimize anti-selection. Protect the group.

• Include usual exclusions

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Group Living BenefitsProduct

Main Features:

• Attach to LTD– The most volatile coverage – Make a compulsory part of the LTD– Offer an amount with no charge

• Illnesses covered are: Life threatening cancer, heart attack, stroke, multiple sclerosis, blindness, kidney failure, coronary artery bypass surgery, major organ transplant, Alzheimer’s disease, Parkinson’s disease

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• Waiver of CI premiums– Waiver of CI premiums (for sum insured greater than

$5,000) if LTD premiums are waived – again, keep it simple.

• No conversion privileges• Taxability will follow the LTD

– Most of our group is non-taxable – keep it simple• When is amount payable?

– Full amount payable after a waiting period (survivorship period) of 30 days following the date of diagnosis or at the end of the waiting period, if any, as defined for the condition, whichever is longer.

Group Living Benefits

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Group Living BenefitsExperience

• Still too early to tell – launch date was April 1st, 2008

• Positive feedback from the market• Requests coming in for larger amounts of

insurance• Spousal/Dependent CI also being requested