I wrote to the BC Financial Services Authority on May 4, 2020, asking for some clarifications relating to their Information Bulletin entitled “Charitable Donation of Life Insurance Policies in British Columbia” which we covered here.  On May 8, 2020, they responded to my questions.  Here are the questions and their responses.

 

1) What is a bona fide charity?  I assume this is something other than a registered charity.  In other words not all registered charities are bona fide? Do you have any indicators of what is not a bona fide charity?

BCFSA is not in the position to provide a legal definition as to what are bona fide charities or define a legitimate charitable organization as we do not regulate charities. Our mandate is to administer the Insurance Act (IA) and the Financial Institutions Act. As explained in the bulletin, BCFSA supports legitimate charitable giving activities so donating and accepting insurance policies as a result of proper estate or financial planning is considered acceptable

 

2) Can you give some examples of inappropriate activities that charities should avoid? 

Section 152 of the IA is in place to protect vulnerable policyholders in difficult circumstances from exploitation by unscrupulous parties. If there is evidence that supports a breach, we will review and consider specific circumstances on an individual basis.

 

3) What you mean by “practices harmful to the public”?

An example of activity or practice that is harmful to the public may include, but is not limited to, the use of artificial charities to exploit a vulnerable policyholder, leaving them uninsured and at risk of being denied for insurance in the future.