News release

Amendments to Insurance Act Protect Nova Scotians

Finance and Treasury Board

Nova Scotians can be vulnerable to financial schemes targeting life insurance policies. That is why government is making changes to protect both consumers and insurance companies.

Amendments to the Nova Scotia Insurance Act introduced today, Feb. 28, will better protect Nova Scotians by providing insurance companies with legal grounds to refuse to transfer ownership of life insurance policies to third parties. Government is also closing the loophole on the use of side accounts.

Currently, third parties are potentially able to buy life insurance policies from seniors or people who are critically ill at a fraction of face value. In addition, they can transfer large sums of money into side accounts to take advantage of fixed interest rates.

“We have listened to concerns from industry and are making these changes to better protect vulnerable Nova Scotians,” said Finance and Treasury Board Minister Karen Casey. “Unfortunately, seniors and critically ill Nova Scotians have typically been the most vulnerable to these predatory tactics and government needs to do what we can to help prevent this from occurring.”

Changes will come into effect upon proclamation.

Quotes:

"Canada's life and health insurers congratulate the Government of Nova Scotia on taking this important step that will help protect vulnerable consumers from predatory practices. This amendment will ensure that life insurance in Nova Scotia continues to fulfil its purpose of providing financial protection to individuals and their loved ones."

– Stephen Frank, president and CEO, Canadian Life and Health Insurance Association

Quick Facts:

  • seniors and critically ill Nova Scotians are particularly susceptible to these tactics and involves them giving up all their rights to the insurance policy to the third party
  • the amendments to the act will ban such sales of insurance policies to third parties and eliminates the risk to consumers and insurance companies