Home Breadcrumb caret Industry News Breadcrumb caret Industry Insurance tax changes would reduce profits, says RBC RBC expects to incur a loss due to proposed insurance tax changes. By Staff | November 14, 2013 | Last updated on November 14, 2013 1 min read RBC expects to incur a charge of approximately $160 million pre-tax ($118 million post-tax) in its insurance segment as a result of proposed legislation brought forward in Budget 2013. This new legislation, Bill C-4, was tabled in the House of Commons for first reading on October 22, 2013. If passed, it would affect the tax treatment of certain individual life insurance policies. That impact would be reflected in the bank’s Q4 2013 earnings, which will be released on December 4, 2013. Read: Planners tell Flaherty to fix tax proposals The details Under Canadian International Financial Reporting Standards (IFRS), the present values of the expected profits for life policies are recognized at the time of sale of those policies. The bank’s current life insurance policies were primarily sold through third-party brokers, and RBC is working with those brokers to ensure potentially affected clients understand their choices in light of proposed tax legislation. Clients will be offered revised options. The expected profit on affected and amended policies would be lower than their previous expected profits due to potential increases to benefits, claims and acquisition expenses. Read: Catch overlooked insurance needs Get Gen Y to talk insurance 10 no-nonsense home insurance tips Staff The staff of Advisor.ca have been covering news for financial advisors since 1998. Save Stroke 1 Print Group 8 Share LI logo