The Canadian Council of Insurance Regulators (CCIR) has released a final version of its proposed content for the client account statement for segregated funds along with a prototype of the statement.

The model disclosure document was released as a follow-up to a 2017 position paper on segregated funds, said the organization in a release. The paper outlined CCIR’s expectations about the information to be provided to segregated fund contract holders.

“CCIR is not introducing a prescribed form for segregated funds disclosures,” said the organization in a release. “Insurers will be expected to ensure that consumers are provided with all of the new information outlined in Appendix IV [of the position paper], and they will have flexibility in terms of the layout and look of their disclosure documents.”

Insurers will also be able to modify their disclosure documents to ensure that the language and terminology are consistent with the insurance contract and Fund Facts documents, added CCIR.

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“The prototype statement provides guidance for insurers with respect to the expectations of the regulators about how the required disclosure is presented,” said Patrick Déry, chair of the CCIR, in a release. “Consumers will be able to see both summary and detailed information on cost and performance of Page 2 of 2 segregated funds, in plain language, and thus will be better able to compare the products that are available to them. This information will better assist advisors in discussing segregated fund performance and costs with their clients.”

The disclosures will give consumers a consistent experience when buying segregated funds and mutual funds, added CCIR in the release. The position paper also recommends “aligning the requirements for the delivery of the updated Fund Facts, establishing consistent risk classifications used for the funds and promoting an equivalent standard of care for segregated and mutual fund dealers,” it said.

Members of the CCIR will begin to implement the disclosure documents in their respective jurisdictions. The regulator will also consider the implications of the Canadian Securities Administrators’ work on expanded cost reporting, a best interest standard, embedded commissions and management of incentives, the release said.

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