National Drug Agency Proposed
A national drug agency to oversee national pharmacare would be created if recommendations from the Advisory Council on the Implementation of National Pharmacare are adopted. Its interim report also calls for a national formulary to harmonize coverage across Canada and investment in data on prescription drugs and information technology systems. “Canadians should not have to choose between paying for prescription drugs and putting food on the table,” says Ginette Petitpas Taylor, the federal health minister, and the government is committed to exploring a national pharmacare plan that leaves no Canadian behind. The National Institute on Ageing (NIA) says these recommendations are a solid first step to finally getting Canadians much-needed pharmacare. The three recommendations lay the groundwork for the ultimate plan expected to be announced in June. A national formulary is critical to ensuring that all Canadians have access to a common list of drugs at a common price, it says, and a national agency will be required to co-ordinate amongst provinces which is not possible without a robust data system. The Canadian Life and Health Insurance Association welcomes the interim report. It “is an important contribution to the current discussions on how to ensure access to affordable prescription medicines for all Canadians,” says Stephen Frank, its president and CEO. “Prescription drug reform requires a collaborative effort among insurers, provincial, and territorial governments and the federal government with improvements that ensure all Canadians can access affordable prescription medicines “no matter where they live and work in Canada.” In its submission to the council, the life and health insurance industry called for drug coverage for everyone, the protection of private health benefit plans, affordability for consumers and taxpayers. However, a federal drug agency and limited list of prescription medications alone will not ensure universal access to pharmacare, says Unifor, Canada’s largest union in the private sector, representing 315,000 workers in every major area of the economy. “Canadians need transformative change to address the critical issues of an ageing population and to guarantee the access, value, safety, and, above all, the public ownership of health services,” says Jerry Dias, Unifor national president. “The majority of these evolving issues can be addressed through a universal pharmacare plan.” The union says Canada is the only developed nation in the world with a universal healthcare program that does not include a universal prescription drug plan. Instead, its patchwork of providers has resulted in the second highest drug costs globally, right behind the United States. The final report on pharmacare is due this spring.
Aon Ends Willis Watson Towers Pursuit
Aon plc does not intend to pursue the acquisition of Willis Towers Watson. It was required to issue a statement after reports of its interest in Willis Towers Watson, an Irish company which is subject to Irish regulatory requirements. As a result of media speculation, those regulations required Aon to make the disclosure at a very early stage in the consideration of a potential all-share business combination. It says that consistent with its stated focus on return on invested capital, the firm regularly evaluates a variety of potential opportunities within and adjacent to its industry. Aon had considered such a possibility with regard to Willis Towers Watson.
PRI Addresses Fundamental Legal Questions
The Principles for Responsible Investment (PRI) has launched a project to address ‘fundamental legal questions’ surrounding the consideration of investing activity’s impact on sustainability. It is collaborating with the United Nations Environment Programme Finance Initiative (UNEP FI) and the Generation Foundation on ‘A Legal Framework for Impact’ project. The organizations say assessing and accounting for the sustainability impact of investment decisions needs to become a core part of investment activity within the next decade. The project will involve preparing and publishing legal analysis as well as practical recommendations for investors seeking to make “sustainability impact” a core part of their activity. The PRI says investors are increasingly considering “impact duties” such as decarbonization targets, gender equality, or the impact of their investments on wider society. However, there are fundamental legal questions including whether investors are legally required to integrate the sustainability impact of their investment activity in their decision-making processes or whether there are any legal impediments to investors adopting “impact targets.”
Minor Changes Could Remove Comprehension Barriers
Barriers to comprehension of financial information do exist. However, relatively minor changes to language and graphics can have a significant and positive effect on investor understanding and confidence, says Paul Bourque, president and CEO of the Investment Funds Institute of Canada (IFIC). Testing for its study with BEworks ‒ ‘Behavioural Economics Applied to Enhance Disclosure Practices and Investor Outcomes’ ‒ shows the enhanced statements were more effective at conveying complex information than control statements and also led to a higher subjective understanding and were read more thoroughly than the control statement. Enhanced statements with goal-framing also proved effective in having investors state a willingness to increase future savings. However, in an unexpected finding, the control statement was more effective at conveying basic information.
Accident Victim Learned Self-advocacy
Andrew Lawlor, creative director at Livewire Communications, grew up thinking that if doctors or nurses told you to do something, you did it ‒ an attitude which might be the result of Canada’s universal healthcare system. However, his life changed forever after a speeding car collided with his motorcycle costing him his leg, an eye, the full use of one hand, and more than 40 broken bones. Speaking at the Canadian Group Insurance Brokers’ ‘Humans Behind the Claims,’ he said one lesson he learned is self-advocacy. Patients just can’t accept what they are told. They need to learn to ask questions, make their own recommendations, and advocate for themselves. He also learned that Canada’s healthcare system isn’t free as many believe. If he had not had a good employee benefits program, he would have faced, for example, a $123,000 prosthetic for the leg he lost. He said he was lucky as his accident was declared catastrophic right from the start so the police investigated it more thoroughly. He said the system is good because everything works as it should and he was provided with everything he needed, albeit maybe not as quickly as he hoped. He also cautions he was like many other Canadians and didn’t pay enough attention to benefits seminars at work or filling out forms. He didn’t pay close attention until he needed it. Advisors have an important role to play, says Bill Zolis, a senior employee benefits consultant, at Penmore Callery Group. They need to be where they are needed and often have to be a bridge between LTD administrators and insurance companies who often don’t see the people behind the claims, just the contract with the employer or a brief medical opinion. They also need to tell members of group plans what can happen if they don’t have LTD or life insurance. Many employees just don’t see the need unless the “hearse is backed up to door.”
Strategic Income Funds New Era
Strategic income funds are a new era for fixed income investing, says Stephen Kearns, managing director at Guardian Capital. Speaking at Alternative IQ’s ‘CHFA Winners Showcase Investor Conference,’ he said for the last 35-plus years fixed income investors have seen falling yields and rising risk. Currently, interest rates are low, although unlikely to get lower, making it hard to deliver inflation adjusted returns. As well, the average duration for bonds is really extended meaning the average investor is taking a lot of risk in traditional core funds without a lot of return. These strategic funds address the current low return/high risk environment for income seeking investors. They are income focused and not mandated to own any specific sector. As well, uncorrelated strategies are used to enhance return and reduce volatility. Bryan Nunnelley, managing director of Crystalline Management, said they are getting questions from investors about what to do as the current market cycle is getting long in the tooth. They are looking for true diversification by adding uncorrelated and low volume strategies which arbitrage funds can provide as they offer almost complete elimination of market risk and most of company specific risk.
AI Used As Anti-fraud Tool
Green Shield Canada (GSC) and HBM+ (its health benefit management solutions provider division) are staying a step ahead of health benefits fraud with a multi-layered strategy centred on artificial intelligence (AI) and housed under its ‘Claim Watch’ banner. While today’s range of claims data ‒ which comes in a huge volume in all forms and from all directions ‒ can be extremely time-consuming to analyze, the new AI platform not only finds and compiles data at tremendous speeds, but also identifies patterns and less obvious outliers at a deep enough level to unearth suspicious activity earlier than in the past. Brent Allen, GSC’s vice-president of service operations, says “In the past, preventing and detecting fraud involved manual processes … essentially the focus was on following a paper trail. We were trying to find a needle in a haystack. Fast forward to today and our AI platform is a game-changer in bringing together all our data on claims, health providers, and plan members to form instant insights. The richness of our data is a true differentiator in our industry and that haystack quickly becomes less daunting with an AI-powered microscope.” The AI platform is just a part of ‘Claim Watch.’ All claims are paid on the Advantage system so data flows through a single system (and established claims management policies) to the AI platform without being outsourced. A provider registry ensures that the applicable credentials and licences are in place for any provider submitting claims online via the providerConnect portal.
Use, Don’t Fear, Technology
Despite the fears of technology replacing humanity, group insurance advisors should use it and not be afraid of it, says Dave Patriarche, owner of Mainstay Insurance and head of the Canadian Group Insurance Brokers. Speaking at its ‘Humans Behind the Claims’ session, he said there is a lot of talk about replacing people, but consumers do not want to, for example, use technology to replace their financial advisors. However, he said advisors do need to do a better job of connecting with their clients. They can do this by looking past the technical aspects of their business and remember it is about telling stories to explain how benefits programs work and to educate. While there is concern over whether the future will be bright or bleak, what gives him hope is the great relationships he has seen in the industry. These don’t change because of consolidations or acquisitions because it is not about size or the products sold, it is about the people and the passion they have for their clients. In fact, he said one of the downfalls of consolidation is that larger corporations often start culling their clients, getting rid of those that are too small or high maintenance. For advisors, this means they can focus on building their businesses one client at a time.
Pension Reduction Prompts Class Action
A class action has been filed in the state of Indiana against the U.S. Social Security Administration claiming that a reduction of U.S. retirement and disability payments for those collecting benefits from Canada as well is unlawful. Dwight D. Dee, of Miller Thomson LLP, says persons who have lived and worked for extended periods of time in both Canada and the United States can often be eligible to receive benefits under both government pension programs. As an administrative practice, however, the U.S. Social Security Administration has reduced U.S. payments to such persons on the basis that they also receive benefits under the Canadian pension system. The heart of the issue is whether the reduction of U.S. pension and disability benefits to individuals who also receive the same benefits in Canada is lawful. Generally, the plaintiffs argue that the wording in the U.S. Social Security Act specifies that employment or self-employment benefits are not to be subject to reduction for citizens or residents of countries with which the United States has social security agreements. The services of persons who worked in both countries and contributed to both countries’ social systems are recognized as equivalent to employment paid work in either country and should be exempt. They also claim that the Canada Pension Plan and the Quebec Pension Plan are based on earnings and residence and are of general application, therefore they should be excluded from any reduction. Canada and Quebec do not apply the same deduction to those receiving both Canadian and U.S. retirement benefits.
Venture Supports Women-led Businesses
Scotiabank and Disruption Ventures have announced a partnership that will provide women with support to take their business to the next level and CI Financial Corp. has made a $2 million investment in Disruption Ventures I Limited Partnership, a venture capital fund that finances businesses founded or led by women. “Research shows that women-led businesses are highly productive, yet face many obstacles in getting funded,” says Sheila Murray, president of CI. ” By investing in female entrepreneurs, we are proudly supporting an overlooked yet dynamic group and helping to foster an innovative and prosperous Canadian economy.” The Scotiabank partnership is part of its omen initiative, which helps women with access to capital, support from senior business leaders, and education tailored to their needs. Scotiabank has committed capital to Disruption Ventures and will assist with marketing initiatives, drive awareness of the partnership, and offer educational content to support women entrepreneurs. Disruption Ventures will proceed with making initial investments and continue to fundraise to reach its objective in 2019, at which point it will be the largest private, independent, and women-only fund in Canada. Only two per cent of venture capital dollars in the U.S. were allocated to female-founded companies in 2017. However, a study by Boston Consulting Group that year found that women-founded start-ups generated 78 cents in revenue for every dollar of funding, versus 31 cents for those founded by men.
CIT Target Date Solution Assets Grow
Mutual fund and collective investment trust (CIT) target date solutions reached $1.77 trillion in assets at the end of 2018, a 1.1 per cent increase from $1.75 trillion the year before, says Sway Research. CIT-based solutions began the year with $638 billion and grew by 6.1 per cent to reach $677 billion. Mutual fund-based solutions, on the other hand, declined by 1.9 per cent, from $1.11 trillion to $1.09 trillion. Poor stock market returns in 2018 and ongoing movement among plan sponsors away from higher-cost mutual fund target date solutions to lower-cost CITs is part of the reason for the growth. Target date series that invest in passively managed underlying funds reached 53.3 per cent of target date solutions, up from 51.2 per cent in 2017 and 47 per cent in 2015. Those series that invest in actively managed underlying funds saw their market share fall to 38 per cent, down from 41.7 per cent in 2017 and 46.1 per cent in 2015. Hybrid target date series that invest in both actively and passively managed funds saw their market share rise to 8.6 per cent, up from 7.2 per cent the year prior and seven per cent in 2015.
Fund Using Developing World Strategy
Artisan Partners is offering an Ireland-domiciled UCITS thematic fund managed in line with its developing world strategy to institutional investors in Canada on a private placement basis. The strategy was started July 1, 2015, and had $1,993 million in assets under management as of December 31, 2018. The developing world fund is the third strategy added to its UCITS complex in the last 12 months and the eighth fund overall. The developing world fund is a high value-added strategy in an asset class that allows active managers to differentiate themselves. Artisan manages $96.2 billion in assets under management including $1.8 billion in Canada across separate account and pooled fund mandates.
Toupin Joins Morneau Shepell
Philippe Toupin is vice-president, retirement solutions at Morneau Shepell. Based in Ottawa, ON, he will be responsible for a portfolio of clients and growth opportunities in this region. Prior to this, he held several senior roles, including vice-president, development, at Optimum Holdings, vice-president roles at Manulife and Standard Life, and senior consulting roles at another large actuarial consulting firm.
Canadian Benefits Introduced
The International Foundation of Employee Benefit Plans’ ‘Certificate in Canadian Benefit Plans’ provides an introduction to Canadian employee benefits, pensions, and human resource practices for those working directly with a Canadian plan or are employed by a U.S. company with affiliates in Canada. Sessions will look at Canadian drug benefit practices, the Canadian retirement system, and compensation and HR practices It takes place June 10 to 12 in Chicago, IL. For information, visit Canadian Benefits