Foresters Insurance | New legislation
Two pieces of legislation coming into effect this summer will have a significant impact on how you conduct your business. It is imperative that you familiarize yourself with these new laws because it will affect you and your clients.
Canada’s Anti-Spam Legislation (CASL)
Starting July 1st 2014, it will be against the law to send any unsolicited Commercial Electronic Message (CEM) to an electronic address in Canada without consent (express or implied) and without certain form and content requirements. A CEM can include an electronic message sent by email, text, sound, voice or image that is sent to encourage participation in a commercial activity. It may also include some messages sent through social media. Failure to comply with CASL could result in fines and penalties of up to $1 million for individuals and $10 million for companies. The law will be enforced by the CRTC, the Office of the Privacy Commissioner, and the Competition Bureau.
Fast Facts
Here are the Fast Facts about Canada’s Anti-Spam Legislation from the Government of Canada’s website.
Canada’s new anti-spam law was passed in December 2010 and, following a Governor in Council order, it will enter into force on July 1, 2014. Once the law is in force, it will help to protect Canadians while ensuring that businesses can continue to compete in the global marketplace. On January 15, 2015, sections of the Act related to the unsolicited installation of computer programs or software come into force.
When the new law is in force, it will generally prohibit the:
- Sending of commercial electronic messages without the recipient’s consent permission), including messages to email addresses and social networking accounts, and text messages sent to a cell phone;
- Alteration of transmission data in an electronic message which results in the message being delivered to a different destination without express consent;
- Installation of computer programs without the express consent of the owner of the computer system or its agent, such as an authorized employee;
- Use of false or misleading representations online in the promotion of products or services;
- Collection of personal information through accessing a computer system in violation of federal law (e.g. the Criminal Code of Canada); and
- Collection of electronic addresses by the use of computer programs or the use of such addresses, without permission (address harvesting).
There are three government agencies responsible for enforcement of the law. When the new law is in force, it will allow:
- The Canadian Radio-television and Telecommunications Commission (CRTC) to issue administrative monetary penalties for violations of the new anti-spam law.
- The Competition Bureau to seek administrative monetary penalties or criminal sanctions under the Competition Act.
- The Office of the Privacy Commissioner to exercise new powers under an amended Personal Information Protection and Electronic Documents Act.
The law will also allow individuals and organizations who are affected by an act or omission that is in contravention of the law to, as of July 1, 2017, bring a private right of action in court against individuals and organizations whom they allege have violated the law. Once in force, the private right of action will allow an applicant to seek actual and statutory damages. Statutory damages may not be pursued if the person or organization against whom the contravention is alleged has entered into an undertaking or has been served with a Notice of Violation.
CASL is a complicated piece of legislation that may affect you or your business in many different ways. Below are some helpful on-line resources, however, Foresters recommends that you obtain legal advice on how to be CASL compliant.
Resources
To see the full text of the new law and regulations:
http://fightspam.gc.ca/eic/site/030.nsf/eng/h_00211.html
As a life insurance advisor and small business owner, you should review the Frequently Asked Questions on the Government of Canada site.
http://fightspam.gc.ca/eic/site/030.nsf/eng/home
It is also important for you to know what types of communications are exempt from this new legislation. An excellent resource has been assembled by the consulting firm Deloitte.
http://www.deloitte.com/view/en_CA/ca/insights/ideas/CASL-Key_exemptions_you_need_to_know_about/index.htm
Foreign Account Tax Compliance Act (FATCA)
With the launch of our new life and CI application, you would have seen the following message in our email communication.
You will notice that Section 1.7 of the application features a new question about the owner’s US tax status. Insurance applicants will be required to answer this question for any permanent life insurance application completed and signed after June 30, 2014 to comply with the Foreign Account Tax Compliance Act (FATCA).
To adhere to the Canada-U.S. Enhanced Tax Information Exchange Agreement, Canadian financial institutions are required by law to report information to the Canada Revenue Agency (CRA) on certain financial accounts held in Canada by U.S. persons.
In addition, we have also introduced two supplemental forms:
- Entity self certification form must be completed and submitted when the proposed owner is an entity, including a corporation, partnership, or trust.
- Individual self certification form must be completed and submitted for any non-registered annuity applications.
Fast Facts
Here are the Fast Facts about the impact of the Foreign Account Tax Compliance Act (FATCA) in Canada from the Department of Finance website.
- Under the agreement, financial institutions in Canada will not report any information directly to the IRS. Rather, relevant information on certain accounts held by U.S. residents and U.S. citizens (including U.S. citizens who are residents or citizens of Canada) will be reported to the Canada Revenue Agency (CRA). The CRA will then exchange the information with the IRS through the existing provisions and safeguards of the Canada-U.S. Tax Convention. This is consistent with Canada’s privacy laws.
- The IRS will provide the CRA with enhanced and increased information on certain accounts of Canadian residents held at U.S. financial institutions.
- Significant exemptions and relief have been obtained. For instance, certain accounts are exempt from FATCA and will not be reportable. These include Registered Retirement Savings Plans, Registered Retirement Income Funds, Registered Disability Savings Plans, Tax-Free Savings Accounts, and others.
- The agreement is consistent with Canada’s support for recent G-8 and G-20 commitments intended to fight tax evasion globally and to improve tax fairness. In September 2013, G-20 Leaders committed to automatic exchange of tax information as the new global standard and endorsed a proposal by the Organisation for Economic Co-operation and Development to develop a global model for the automatic exchange of tax information. They also signaled an intention to begin exchanging information automatically on tax matters among G-20 members by the end of 2015.
Resources
The Canada Revenue Agency has provided comprehensive information for businesses and individuals on FATCA including a robust FAQ section.
The Canadian Life & Health Insurance Association, acting on the behalf of all insurers, has put together a package of information for both consumers and distributors (Advisors & MGAs).