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The Canadian Council of Insurance Regulators (CCIR) and the Canadian Insurance Services Regulatory Organizations (CISRO) announced that contributions, including pre-authorized chequing contributions (PACs), into deferred sales charge (DSC) options of a segregated fund contract will no longer be accepted.

To comply with this change and in keeping with Canada Life’s commitment to support you and your clients in an evolving regulatory environment, we’re making changes for certain policies with DSC options, effective May 12, 2023.

Impacts to Canada Life Segregated Funds policies
Current segregated funds products
Older segregated funds products

Impacted products

Canada Life Segregated Funds policies

Policies where DSC* is the only sales charge option available, including:

  • Canada Life Generations, Generations Core, Generations I and Generations II 

*This includes back-end load (BEL) options.

Our approach
  • We’ll stop accepting new contributions into DSC options as of May 12

  • Clients with active PAC instructions into the DSC option will be automatically moved into the 0% front-end load (FEL) option of the same fund(s). 

  • There’s no impact to contributions previously made into the DSC option. 

  • There’s nothing you need to do to make these changes. You will need to provide alternate instructions if a fee structure other than FEL 0% is desired by April 28. 

  • Contributions can continue, as long as disclosure about other sales charge options available are provided to the client prior to Canada Life accepting the contribution. 
  • For Flex and Emperor policies that only have the DSC option, contributions can continue but the disclosure is not required since redemption charges no longer apply for these policies.
Client notification
  • Clients with active PACs into DSC options will be mailed a letter starting early April to inform them of the change and suggesting they contact you to discuss their suitability.
  • For clients who added new PAC instructions between Feb. 15 and April 3, and clients who have automatic transfers (AWR) into DSC/LSC funds, letters will be mailed starting at the end of April.
  • Clients with active PACs into DSC options will be mailed a letter starting early April to inform them that their contributions can continue, with added disclosure. 

  • For non-scheduled contributions, new PACs or increased PAC contributions, you will need to provide your clients with the DSC contribution disclosure form before they make a contribution.  

Contact to request a list of your impacted clients. Please include your name, advisor code and office.

Existing contributions into DSC options aren’t impacted. These contributions remain subject to redemption charges if redeemed during the redemption charge period.

For Flex and Emperor policies the disclosure isn’t required.

Intact transfers from registered savings to registered income policies aren’t impacted by the changes to DSC options. DSCs aren’t charged on the source policy; any existing DSC schedule is carried over to the target policy. Please refer to the Transfer Guidelines for further details.

We have no plans to waive the DSC fees on existing segregated fund policies.

No, you cannot transfer any DSC units to chargeback. This is to ensure we provide upfront sales compensation only once for a given invested amount. Please refer to transfer guidelines for more information. 

These options vary depending on the client’s existing policy. Refer to the information folders for more information.

Canada Life is proactively implementing changes to DSC options effective May 12, which coincides with the spring release of segregated funds forms, applications, contracts, information folder and fund facts documents.

  • FEL 0% mirrors what was done for mutual funds when similar regulations stopping DSC contributions were applied there.
  • FEL with 0% upfront commission was chosen as it would ensure that the client’s contributions were fully invested into the policy without any up-front load being deducted. 
  • Some advisors have chosen to not incorporate the chargeback option into their practices, so we didn’t want to default to chargeback (where available).

Yes, clients can choose to put future PAC amounts into CB options, where available. However, CB2 is not available until May 12, so until May 11, the only chargeback option is CB4. 

Due to the volume of changes required to remap all impacted PACs and to ensure that the changes are applied by May 12, we’re asking for the updated instructions by April 28. Updated instructions received between April 28 and May 12 will be handled on a best-efforts basis.

We highly discourage starting new PACs into DSC options between now and May 12. Doing so would require additional notifications to the client who may reach out to you with questions about instructions that were recently submitted.

Your Operations Specialist will deposit the premiums into the FEL 0% option of the fund(s) and notify you of this transaction.

We've focused our efforts and resources on a single, go-forward product post-amalgamation into one company, so that we can be the most productive. 

Starting May 12, new online banking contributions  will go to FEL 0% money market, and we’ll send you an email to let you know a switch can be processed to the funds as chosen by you and your client.

As of May 12, you must provide this form to your client, or their Power of Attorney, prior to accepting the following contributions into policies where DSC is the only sales charge option: 

  • New PAC contributions 
  • Restarting a PAC 
  • All non-scheduled contributions 

Canada Life will provide the DSC contribution disclosure annually for existing PACs. 

For Flex and Emperor policies the disclosure isn’t required. 

We’re not allowed to accept a contribution until the DSC contribution disclosure is provided to clients. You must document in your client file that this disclosure was provided, where applicable, for audit purposes.

No client signature is required for the DSC contribution disclosure.

The following forms will be updated to provide acknowledgement the client was provided the DSC contribution disclosure form. Using the appropriate forms will ensure transactions are in good order and there are no delays in processing. The form date will reflect 5/23.

  • Change form – Premiums (46-5959)
  • TARI (5436 CAN)
  • TANRI (46-10158) 
  • Change form – Premiums – Gens & EP (153CAN) 

If you meet with clients before the new forms are released, we’ll accept it or a letter of direction. The following wording to be must included, otherwise the contribution will be considered not in good order:

“I/We acknowledge receipt of the DSC contribution disclosure form.”

No, we've focused our efforts and resources on a single, go-forward product post-amalgamation into one company, so that we can be the most productive.

If a client transfers an entire non-registered policy, any redemption or transfer is a taxable disposition and may result in a capital gain or capital loss that will be reported to the client on their next tax slip. For registered policies, this type of redemption is a tax-free registered transfer. Transferring an entire policy will impact clients’ guarantees and may result in redemption charges. The features available within the existing policy may differ from the features in the new policy. Refer to the segregated funds Product comparison document for more information.

Yes. You can continue to use a TA for new contributions to policies where DSC is the only option as long as:

  • you provided your client with the DSC contribution form.
  • you added a note to the applicable form and to your client file indicating that the DSC disclosure form was provided to the client prior to accepting the contribution.