We are advising the public, in particular those consumers who have older parents that may have purchased a life insurance policy a long time ago to be on guard against an illegal cancellation of these policies by insurers.
Orphan policies are those policies which have no licensed agents/representatives to look after their service and where the insurers give the impression that the agent/representative (referred as the servicing agent) showing on the annual report and other communications is licensed and active when it is not the case. Consumers have the impression that someone is looking after their policy when it is not the case. This leads often to the cancellation of the policy in question.
In Quebec, we have gone to Court seeking an injunction and sanctions against Manulife which we believe is the insurance company which has the most orphan policies and certainly uses the most questionable commercial practices in regards to orphan policies. While the administrative court (Bureau decision et revision) has rejected our demands on the basis it did not have the competency to go after Manulife in order to meet its mandate of protecting the public, our legal initiative has forced the regulator, the AMF, to declared illegal all orphan policies in the province of Quebec while confirming that the Manulife treatment of these orphan policies constituted infractions. However the AMF refused to go further by demanding sanctions against Manulife. No other regulators have followed the decision of the AMF.
In regards to Commercial Union policies, we are advising those who own these policies or those who have family who own these policies to be particularly vigilant. We have proof that Manulife removed the name of agents from these policies. This mean that lapse notices were not acted upon when sent out, if they were sent out at all, for many possible reasons such as a change of address. These lapse notices were instead destroyed. We are currently talking to consumers who are looking for their Commercial Union policies and who have been told by Manulife that no information can be found on their policies. This supports the evidence we have of the destruction of these lapse notices and the resulting consequences.
“Personally I have received a “mise en demeure” from Manulife in my attempt to rectify false information that was provided to 500 orphan policies. Manulife, using my name and attacking my reputation informed these 500 orphan clients that my communications to them, informing them that no one was looking after their policy because the listed agent was not licensed, or was dead… was false which is clearly a lie on the part of Manulife. Now the cat is out of the bag, Manulife wants me to keep quiet and keep this confidential. I refuse to become associated through my silence with the infractions of Manulife,” stated Richard Proteau. He intends to publish the “mise en demeure” of Manulife with a very public response. “Manulife can sue me all it wants. It will only provides me more ammunitions to support my claims as Manulife will be forced to provide full disclosure…”
In the end, there is nothing worse than to see consumers that have paid for their policies for twenty years or more being denied their life insurance through infractions committed by Manulife or other insurers.