CRA considers that a s. 88(2) distribution of an insurance policy occurs at FMV rather than CSV

CRA considers that where an insurance policy is distributed on the winding-up of a corporation under s. 88(2), s. 69(5), as "the more specific provision," generally will take precedence over s. 148(7), so that the policy would be disposed of at fair market value rather than cash surrender value.

Neal Armstrong.  Summary of 14 May 2015 CLHIA Roundtable, Q. 4, 2015-0573841C6 under s. 69(5).