In discussions with a large charity, it has recently come to our attention that the BC Financial Services Authority’s (BCFSA, formerly FICOM) position is that accepting life insurance policies as a donation is not permitted under the Insurance Act. Gifts of life insurance policies have, up to now, have been an important alternative when making a legacy gift to a charity.
Margaret Mason of Norton Rose Fulbright has provided some further information on the prohibition on gifts of life insurance policies to charities in British Columbia by BC residents, including recommending that “charities in British Columbia remove information regarding donations of life insurance policies from their websites and suspend any discussions with potential donors of life insurance policies until more information is forthcoming”.
We believe that this position may be based on BCFSA’s interpretation of the provisions of the Insurance Act. We have reached out to the BCFSA for confirmation of their position, but have not received confirmation as of November 26th.
We don’t believe that the Government of BC would be against the donation of life insurance policies to charities as a general policy. I (in my personal capacity) have requested that the Government of BC take immediate action to remove any uncertainty, including making any necessary legislative or regulatory amendments to allow the donation of life insurance policies to continue.