Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
Principal Issues: Whether or not a life insurance policy issued by a non-resident insurer can qualify as an exempt policy.
Position: While it could it is our understanding that the required information would generally not be available to the policyholder or even exist.
Reasons: The determination is incumbent on the policyholder and when the policy is issued by a non-resident insurer the required information is usually not available.
XXXXXXXXXX 992390
Attention: XXXXXXXXXX
September 16, 1999
Dear Sirs:
Re: Exempt Policies - Our document # 9917195
This is in reply to your letter of August 25, 1999 where you requested clarification with respect to a comment we made in the above document concerning our view that “generally policies issued by insurers not carrying on life insurance business in Canada will not be able to satisfy the requirements necessary to qualify as exempt policies".
The above comment was not intended to contradict our view that a life insurance policy, which may be issued by a non-resident insurer which is not carrying on an insurance business in Canada, is not specifically precluded from qualifying as an "exempt policy". It also continues to be our view that such a policy could qualify provided the criteria in section 306 of the Income Tax Regulations are satisfied. This would require the provision of evidence to the Department that the life insurance policy satisfied the exempt policy tests in section 306 of the Income Tax Regulations on the date of the first policy anniversary and continuously thereafter. Our comment was intended to reflect our understanding that the required information would generally not be available to the policyholder or may not exist where the life insurance policy was issued by a non-resident insurer which is not carrying on an insurance business in Canada.
We trust that the above comments will be of assistance. Yours truly,
F. Lee Workman
Manager
Financial Institutions Section
Financial Industries Division
Income Tax Rulings and
Interpretation Division
Policy and Legislation Branch
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