CLHIA-ACCAP

working group to examine a number of the paper's recommendations. Further, many member companies have already adopted the paper's recommendations around eliminating incentive travel for independent agents. c Member companies also recognized that they could improve their practices with respect to the oversight of advisors. After a careful review of the current market and consideration of a range of options, the industry took the proactive step of recommending to regulators that each province establish a licensing regime for distribution firms. In the meantime, we are continuing to work within the industry to strengthen and enhance the standards for advisors. c A further issue has been around the appropriate use of embedded commissions and determining what is the appropriate level of disclosure for consumers. The industry is monitoring carefully the Canadian Securities Administrators' consultation on banning embedded commissions and is working with the Canadian Council of Insurance Regulators (CCIR) to ensure appropriate dialogue, i.e., one that takes into account our industry's unique products and interests. c In group insurance, significant progress has been made in developing a guideline to set standards for intermediary compensation disclosure. The guideline should be finalized by this fall. Capital Issues c The CLHIA's Committee on Capital Adequacy and Solvency, including its five Working Groups, continued to be very active, primarily in influencing the new capital framework for 2018, the Life Insurance Capital Adequacy Test (LICAT), and changes beyond 2018. The Committee provided detailed input to OSFI on multiple occasions on methodologies and calibrations for both Required capital and Available capital, including leveraging results from confidential CLHIA- administered surveys of LICAT results. c The Segregated Fund Guarantee Capital Working Group provided substantive input and recommendations to OSFI on its overhaul of LICAT capital requirements targeted for 2020. Quantitative Impact Study #1 on OSFI's proposals was also completed. c The Committee was also active in contributing to international developments, including a CLHIA submission to the International Association of Insurance Supervisors (IAIS) on the second public consultation on their International Capital Standard. Industry Access to Genetic Information c Bill S-201, the Genetic Non- Discrimination Act, which would preclude insurers from using genetic A Message from the President and CEO Board of Directors Review of the Year's Results CLHIA Code of Member Service Members CLHIA Officers Chair's Message

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