In response to recent discussions surrounding charitable giving of life insurance policies and the prohibitions set by Section 152 of the Insurance Act (the Act), the BC Financial Services Authority (BCFSA) has released Information Bulletin number INS-20-003 on May 1, 2020 clarifying their position and interpretation on this matter.
The first activity that Section 152 prohibits is advertisement as a purchaser of life insurance policies or of the benefits under the life insurance policies. BCFSA is of the view that the solicitation by bona fide charities of donations of life insurance policies or benefits is generally not prohibited under Section 152 of the Act.
The second activity that Section 152 prohibits is trafficking in life insurance policies. The following three donation methods were considered:
In consideration of the above three donation methods, BCFSA is of the view that a donation made by an insured directly to a bona fide charitable organization is generally not prohibited under Section 152 of the Act.
While BCFSA remains supportive in charitable giving, they will continue to assess the facts in specific circumstances to ensure that practices remain in compliance with the law and do not harm vulnerable British Columbians.