All About Estates

Electronic Beneficiary Designations for Insurance Products

In 2018, the Ontario government introduced amendments to the Pension Benefits Act to permit pension plan administrators to accept electronic beneficiary designations. Specifically, the Pension Benefits Act was amended to include the following provision (among others):

Electronic designation of beneficiaries

30.1.1  (1)  Despite anything to the contrary in the Succession Law Reform Act, an administrator may permit members, former members and retired members to designate beneficiaries electronically for the purposes of any provision in this Act permitting the designation of a beneficiary.

On April 11, Ontario Minister of Finance Victor Fedeli introduced the current government’s first budget. Schedule 33 to Bill 100, the budget implementation bill, proposes to extend electronic beneficiary designations to insurance products. With respect to life insurance in particular, the budget proposes to amend section 190 of the Ontario Insurance Act, which deals with life insurance designations, to add the following subsection (among others):

Electronic Declaration

(1.1)  Despite anything to the contrary in the Succession Law Reform Act, a declaration under this section may be provided electronically.

The reference to the Succession Law Reform Act (“SLRA”) in the amendments to the Pension Benefits Act makes sense, since Part III of the SLRA applies to beneficiary designations in respect of a “plan”, which includes a pension plan. The reference to the SLRA in the amendments to the Insurance Act is puzzling since subsection 54(2) of the SLRA specifically provides that Part III of the SLRA “does not apply to a contract or to a designation of a beneficiary to which the Insurance Act applies”. It is also puzzling why the government is taking a piece-meal approach to these changes, which are welcome changes, as opposed to a systematic approach. The first set of amendments included only pension plans. They did not address insurance products or any other “plans” that are governed by Part III of the SLRA, such as RRSP’s, RRIF’s, and TFSA’s. This set of amendments, if passed, will extend electronic beneficiary designations to life insurance (and other insurance products), but the other plans noted above remain excluded. It is hoped that this gap will addressed in due course.

About Darren Lund
Darren Lund is a member of the Trust, Wills, Estates and Charities at Fasken, Toronto office. Darren has expertise in a broad range of estate planning matters, including multiple wills, inter vivos trusts, disability planning, estate freezing, and planning for beneficiaries and assets outside Canada. Darren advises trustees and beneficiaries on all aspects of estate administration, both contentious and non-contentious, and his experience includes passing of fiduciary accounts, trust variations, post-mortem tax planning, and administering the Canadian estates of non-residents. He also speaks and writes on a variety of related topics such as estate planning for spouses and couples, inheriting overseas property and estate planning for persons with disabilities. He previously practised estates law at a large national law firm. Email: dlund@fasken.com

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