Structures Offer Unparalleled Security

Structures Offer Unparalleled Security

A structured settlement is one of the most secure, guaranteed investments available. In fact, all structures contain three levels of guarantee:

Guarantee #1: The Issuing Life Insurer

McKellar places structured settlements with only those Canadian life insurers that offer the greatest long-term security. Our criteria is as follows:

  1. The life insurer must have an unblemished record of always paying 100% of its obligations on time.
  2. The life insurer must be a Canadian federally-registered insurer which is overseen by the Office of the Superintendent of Financial Institutions (OSFI). OSFI is charged with making sure operating life insurers remain solvent.
  3. The life insurer must issue "Investment Grade" annuities. For this purpose, that is defined as a rating of BBB or above from Standard & Poor's.
  4. The life insurer must have a high MCCSR. This means that it must have significantly more assets than liabilities.
Because of the degree of security offered by these life insurers, the chance of a default is virtually zero. Nevertheless, there are two additional levels of protection.

Guarantee #2: Assuris

Assuris is supported and run by the Canadian life insurance industry. If a life insurer is not able to make the structure payments, Assuris guarantees coverage up to $2,000 per month. If the payment is higher, Assuris covers 85% of the promised amount, but not less than $2,000 per payment. To access their website, click here.

Guarantee #3: The Structure Owner

You do not own your structured settlement. If you did, it would simply be a taxable annuity. For Canada Revenue Agency to approve the structure as tax-free, a separate insurer must own it, and must remain liable for your payments if the life insurer cannot make them, and if Assuris' coverage is insufficient.

 

Important!
The chance that a life insurer meeting McKellar's criteria will default on a structured settlement is extremely remote. Still, it is reassuring to know that these additional layers of protection exist.