In late October, Transamerica Life Canada announced that it would stop selling ImaxxGIF segregated fund contracts. The decision took effect on Nov. 16.

Holders of ImaxxGIF policies purchased before this date will not be affected. They can continue to pay lump sums and use the pre-authorized debit plan, and can make changes as they wish. Shortly before this announcement, Transamerica launched the product that is replacing the ImaxxGIF: Transamerica Guaranteed Investment Fund.

Transamerica seems to be one of several insurers fine-tuning their product lines, a trend that emerged some months ago. Certain companies are withdrawing products and replacing them with less risky ones.

Others are trimming guarantees and the range of funds offered, or are requiring clients to hold a portion of their assets in fixed income securities. Management fees are also rising. The goal: risk reduction. The economic crisis is prompting insurers to review their product structure.

Industrial Alliance has informed its advisors that the guaranteed surrender balance fees of its guaranteed lifetime benefits product, Ecoflextra, will increase by 0.10% on Dec. 31. This increase will apply retroactively to contracts issued since Jan. 1, 2009.

Another change: asset allocation of the new Ecoflextra contracts must include a minimum of 20% of fixed income securities and a maximum of 80% of equity.

In an announcement to advisors in October, the company justified these changes by stating "The Canadian GMWB category experienced significant changes following market volatility of the past year, and Ecoflextra was not immune to these events. IA is therefore revising the product, which nonetheless remains one of the most competitive offerings in Canada."

AXA Assurances also took industry watchers by surprise recently when it announced in late September that it would leave the segregated fund market. By closing its 12 accumulife segregated fund options launched just over a year ago, the insurer signalled its intention to focus on individual and group insurance (See The Insurance Journal, October 2009).

The myriad of changes in the segregated fund landscape reported in the last few editions of The Insurance Journal affect both traditional guarantees and guaranteed minimum and lifetime benefits. Guarantees at maturity and death have also been subject to risk mitigation measures.

Desjardins Financial Security not only temporarily suspended sales of its Helios guaranteed minimum withdrawal product, but also suspended sales of its 100/100 guarantee (100% guarantee at death and maturity).

Sun Life Financial also dropped its 100/100 guarantee. The guaranteed minimum withdrawal charges increased from 0.1% to 0.3%. In addition, new clients must hold at least 30% of their assets in fixed income securities.

What's new in the table?

Changes to the comparison table of segregated funds offered in Canada this year (see pages 12 and 13), include Manulife Financial's GIF Select, which comprises three series: InvestmentPlus, IncomePlus and EstatePlus.

IncomePlus and EstatePlus clients can purchase contracts and make deposits until age 75. Manulife no longer offers 100% guarantees at maturity; only the 75% guarantee is still available. Automatic reset can continue until age 80 for the guarantee at death. Over 40 funds are available.

Another change worth mentioning: the age limit for resetting Empire Life contracts. The maximum age is now 80 if less than ten years remain until maturity. Before, there were no limits on resets. The same change applies to contracts held in nonregistered plans. Empire Life now restricts purchases and deposits to clients aged 80 and under.

Industrial Alliance is still offering 100% guarantees at maturity and death, but the company recently increased the cut-off age for total guarantees on issuance of the contract. For the guarantee at maturity, clients must opt for 75% coverage at age 72 or higher (previously age 70 and up), and for the guarantee at death, they must choose 75% coverage starting from age 80 (previously 70).