*Updated: 13 June 2017
As we let you know in the May 2 issue of ivari info, there are some changes to the way you do business and what you need to collect from your client for CRS and AML compliance.
The CRS was developed by the Organization for Economic Co-operation and Development (OECD), with support of Canada and other G20 countries to combat global tax evasion and improve tax compliance.
It will be implemented in Canada effective July 1, 2017 under Part XIX of the Canadian Income Tax Act.
As a financial institution, ivari is required to collect and review policyowners’ information to determine its reporting requirement to Canada Revenue Agency (CRA). CRA may, in turn, share the information with participating countries.
CRS is an extension of FATCA that requires financial institutions to report information to CRA about certain accounts held by persons who are resident for tax purposes in a country other than Canada and the United States. Although the concept is similar, the application can be different. CRS does not replace FATCA.
CRS takes effect in Canada on July 1, 2017.
You will need to know that we have updated our applications and certain forms to incorporate the requirement for policy owner(s) to declare their tax residency and the entity’s classification.
This requirement applies to all life insurance policies with cash value and non-registered annuity contracts (including segregated funds contract) when:
Advisors should be aware that they will have to collect new information about client’s tax residency status in situations as noted above.
The following applications and forms are affected and the updated versions will be available in the Administration/Forms section on June 9:
*The 2/15 version of the insurance application will not be accepted after August 24, 2017.
If you have the 11/16 version of the insurance application, you must include the new 2017 version of the IP-LP1165, IP-LP1601 or IP-LP782 in order to be compliant with the new CRS legislation.
An example of the CRS requirements for an individual in the application/form consists of the following three statements:
Depending on your situation, you may answer “yes” to more than one.
An example of the CRS requirements for an entity in the application/form consists of the following three statements:
Depending on the entity’s situation, you may answer “yes” to more than one.
The following website provides information about the new reporting requirements.
We will keep you updated on CRS in future issues of ivari info.
If you have any questions, call us at 1-800-846-5970 between the hours of 8:00 a.m. and 7:00 p.m. ET, Monday to Friday.