By Jacquie McNish WSJ Mon., March 18, 2019 A Canadian court has blocked a group of investors from pumping unlimited funds into legacy life-insurance policies, a strategy that some of Canada’s largest financial institutions warned could lead to huge losses. The policies, known as universal life insurance, where sold in the 1990s and include both a death benefit and investments accounts that guaranteed interest rates up to 5%. The policies didn’t explicitly limit how much could be invested. Judge Brian Scherman of the Court of Queen’s Bench of Saskatchewan said in a ruling late Friday that although the disputed policies didn’t set investment limits, the contracts were designed to restrict investments for such insurance related costs as taxes and fees. The policies were purchased from original holders in the province of Saskatchewan several years ago by Michael Hawkins, an Ontario actuary and cattle farmer, who was seeking a guaranteed rate above market interest rates. He and other investors pumped 14 million Canadian dollars ($10.5 million) in the policies until the insurers, Manulife Financial Corp., Industrial Alliance Insurance and Financial Services Inc. and the insurance arm of Bank of Montreal suspended or blocked the accounts, triggering a legal fight. Gary Selke,… Read full this story
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