Last July, Quebec City-based Assep Financial Centre, a managing general agency (MGA), went bankrupt. It now remains to be seen if creditors will recover their money. Does Assep’s portfolio still have some value? Opinions differ on the subject.

Last July, Quebec City-based Assep Financial Centre, a managing general agency (MGA), went bankrupt. It now remains to be seen if creditors will recover their money. Does Assep’s portfolio still have some value? Opinions differ on the subject.

Jocelyn Renaud, a trustee with the law firm Raymond Chabot, told The Insurance Journal that he was trying to find a buyer for Assep’s remaining policies. But first he has to do an inventory of the assets to see what might be sold.

Perhaps another MGA could be interested, says Phillippe Corriveau, director of administration and finance at MGA Groupe BBA. "What remains of Assep is worth something, that’s for sure. The advisors who used to deal with Assep will have to do business with another MGA. What’s more, if assets have been transferred, the trustee will receive compensation for them. In my opinion, it’s certain that the trustee will receive something."

Michel Kirouac, vice-president at Groupe Cloutier, also thinks that an MGA may want to acquire Assep’s portfolio.

"I don’t know how the trustee will untangle it all and it will be difficult to evaluate. The biggest problem at Assep is that the advisors are now gathered in three or four places. It’s nice to buy in-force business, but it requires control of the advisors," he emphasizes.

Purchasing Assep’s policies remains interesting nevertheless, according to Mr. Kirouac. "Between 70% and 75% of the in-force polices at Assep don’t have an advisor, since the contracts were with companies like Maritime Life and Colonial Life, which don’t exist any more. So it’s certain those policies are still there. The question is whether or not they’ll be kept in-force."

James McMahon, president of Force Financière Excel, is more categorical. He sees no value in Assep’s business.

"It’s not worth much. The problem with these insurance policies is that they were attached to an advisor. Most advisors left before the bankruptcy because Assep had been in trouble for quite a while. So there’s not much left," he says.

AMF is keeping watch

Quebec financial services regulator, the Autorité des Marchés Financiers (AMF) is also paying close attention to the file. Spokesperson Frédéric Alberro told The Insurance Journal that the regulator was in constant contact with Assep’s management. "We are in the middle of this process. We are following it closely. Several scenarios could unfold. The file might be referred to another insurer, another registrant, or the premiums sold. At the moment, we are in discussions with the registrant to wrap up the case," he said.