Is a mortgage acquired by an RRSP a qualified investment under 4900(1)(j) of the Regulations where the mortgage is insured by a life insurance policy?
Where an RRSP acquires a life insurance policy to insure a mortgage, granted to the annuitant, in case of the death of the annuitant, is there an advantage prohibited by paragraph 146(2)(c.4) of the Act?
Is an interest in a life insurance policy a qualified investment?
Question of fact. No definitive answer.
No, unless the conditions stipulated in subsection 198(6) of the Act are met.
Subparagraph 4900(1)(j)(i) of the Regulations deals with insurance against risks in the event of default of the borrowers (see section 8 of the National Housing Act). Subparagraph 4900(1)(j)(ii) of the Regulations requires that the mortgage be insured by a corporation offering its services as insurer of mortgages. Whether or not a mortgage insured by a life insurance policy meets these conditions is a question of fact, which requires a review of the life insurance policy, the mortgage, and the surrounding facts.
Subparagraph 146(2)(c.4)(iii) of the Act excludes only an advantage under a life insurance policy in effect on December 31, 1981. But, it is a question of fact, which requires an examination of the life insurance policy, the mortgage and surrounding facts.
Wording of subsection 198(6) of the Act.