Get new posts by email:

Short Takes: Insurance Companies Caught by Own Fine Print, Reduced Competition in Canadian Banking, and more

Here is an amusing story of a lawyer who found a way to make money exploiting the fine print in insurance contracts. The insurance companies are trying to sue the lawyer with the argument that they don’t understand their own contracts. There are no angels here, but I’m on the side of the lawyer in this story that kept me interested right to the end.

Scotiabank made a $3.13 billion offer to buy ING Canada. Online banks are an important part of maintaining a competitive marketplace in Canadian banking. Unfortunately for consumers, it looks like competition will be reduced in this case.

The Blunt Bean Counter had some fun describing CRA information requests from taxpayers that make little sense.

Boomer and Echo argues that Canada needs a fiduciary standard for investment advisors.

Canadian Couch Potato reports that a number of ETFs are closing shop.

Preet Banerjee answers the question of whether children have to pay the debts of their deceased parents.

Big Cajun Man muses about when is the right time to downsize your life when the children leave home.

<< Previous Post Next Post >>

Comments

  1. Big Cajun ManAugust 31, 2012 at 6:37 AM

    Musing is what I does goodest, me thinks...

    Enjoy the LOOOOONG weekend

    ReplyDelete
  2. The Blunt Bean CounterAugust 31, 2012 at 8:01 AM

    Michael, thx for the link. I must say I enjoyed your interpretation of the language on the information requests when you said in your blog post "“We need to see documentation to make sure you’re not a lying deadbeat".

    ReplyDelete
  3. EchoAugust 31, 2012 at 9:22 AM

    Thanks for the mention. Have a great weekend!

    ReplyDelete
  4. Michael JamesAugust 31, 2012 at 9:40 AM

    @Mark: It would be interesting to see how people would react to an information request letter that explained the reason for the letter plainly. Of course, I'd want to observe the reaction from a discreet distance.

    ReplyDelete
  5. LifeInsuranceCanada.comAugust 31, 2012 at 3:24 PM

    I read a good part of that lawyer's scheme. he's not robin hood, he's a schemer.

    He basically found one state that doesn't require by law that there be 'insurable interest' in a life insurance policy. There's a reason every other state has laws that do require this. Because the idea that I can take out a life insurance policy without your knowledge, permission or without suffering any loss upon your death (which is a basic premise of any kind of insurance) is bad. What happens generally if I'm allowed to take out life insurance on your life and I profit when, but not until, you die. See any potential issues there? Like I can hardly wait until you're dead?

    You may think that that this is no big deal, screw the insurance company. hey, I sympathize with the attitude. But removing insurable interest in the end screws the consumer most. In the U.S. Walmart has been a big purchaser of COLI policies - corporate owned life insurance policies. Not just on their execs, but on their low paying staff. They put $50,000 policies on all their greeters and cashiers. They have no real insurable interest. they just have enough staff that overall they make money from their staff's deaths.

    Does that not creep you out a bit? See how that can go wrong? think about whether Walmart is financially better off paying life insurance premiums (with Walmart as beneficiary) and just skipping the costs of your drug plan. Got cancer? Why, that's the best news your employer has heard all day. No health plan to increase your chances of recovery?

    In short, this guy isn't finding loopholes, he's perverting the system. And the results are NOT in consumers' best interests.

    ReplyDelete
  6. Michael JamesAugust 31, 2012 at 5:12 PM

    @Life Insurance Canada: As I said, there are no angels in this story. If the lawyer is a schemer then the insurance companies executives were greedy fools.

    I do think it's a big deal to screw insurance companies. Insurance fraud is a major problem that ends up costing consumers a lot of money. However, where is the fraud here? The insurance companies need to ask themselves how they were taken so easily for so long by someone who didn't even do anything illegal.

    ReplyDelete

Post a Comment

Popular posts from this blog

Short Takes: InvestorLine’s HISAs, 24-Hour Trading, and more

I recently moved some cash into BMO InvestorLine’s high-interest savings accounts (HISAs) that are structured as mutual funds.  Their designations are BMT104, BMT109, and BMT114, and they purportedly pay 4.35% annual interest (which they can change whenever they like).  However, the way they report the monthly interest payments is so baffling that I wasn’t able to sort it out in my first 15 minutes of trying.  A further complication is the following text in the HISA description: “The Bank may pay, monthly or quarterly, compensation to your Dealer at an annual rate of up to 0.25% of the daily closing balance in the BMO HISA.”  I couldn’t find any evidence of such a charge, but I haven’t been invested for a full quarter, and I can’t yet say that such a charge isn’t buried somehow in the confusing reporting.  I have more digging to do before I can recommend these HISAs. Here are some short takes and some weekend reading: Preet Banerjee explains the dangers of Robi...
Read more

My Asset Allocation

I’ve resisted discussing my asset allocation for some time, but now is finally the time to describe it and the reasons behind it. I’m not holding it out as a model portfolio; I believe it’s suitable for me and not necessarily anyone else. With that warning, enjoy the discussion and feel free to ask questions or take some pot-shots. The main reason why I haven’t discussed my asset allocation in detail before now is that I don’t want readers to treat it like a model portfolio and follow it blindly. Everyone’s situation is different. The need for variation in asset allocation from one investor to the next usually isn’t huge, but there is no one-size-fits-all portfolio. A secondary reason for keeping my asset allocation to myself is that I can’t be sure I’ll never change it. For example, I recently made the minor change of switching from an ETF of small-cap stocks to an ETF of small-cap value stocks . I don’t have any plans to change my current allocation, but I may think differe...
Read more

What to Do About Crazy Stock Valuations

Image
The last time I had to put a lot of effort into thinking about my finances was back when I retired in mid-2017.  I had ideas of how to manage my money after retirement, but it wasn’t until a couple of years had gone by that I felt confident that my long-term plans would work for me.  I had my portfolio on autopilot, and my investing spreadsheet would email me if I needed to take some action. I was fortunate that I happened to retire into a huge bull market.  I got the upside of sequence-of-returns risk.  The downside risk is that stocks will plummet during your early retirement years, and your regular spending will dig deep into your portfolio.  Happily for me, I got the opposite result.  My family’s spending barely made a dent in the relentless rise of the stock market. However, stock prices have become crazy, particularly in the U.S.  One measure of stock priciness is Robert Shiller’s Cyclically Adjusted Price-Earnings (CAPE) ratio .  In the U.S...
Read more

Archive

Show more