Common Reporting Standard (CRS) and Anti Money Laundering (AML) Important information and transition rules

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1 Common Reporting Standard (CRS) and Anti Money Laundering (AML) Important ination and transition rules 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. AML CRS Effective date June 17, 2017 July 1, 2017 What s changing? In addition to identifying Politically Exposed Foreign Persons (PEFPs), Advisors will now be required to identify Domestic Persons (PEP) and Head of International Organization (HIO), and family members and/or close associates of any of these. Changes to the methods used to verify client identity. CRS tax reporting requirement will be effective in Canada. As a financial institution, ivari is required to collect and review policy owners ination to determine its reportability to Canada Revenue Agency (CRA). CRA may in turn share the ination with participating countries. 1

2 AML CRS Effective date June 17, 2017 July 1, 2017 What do advisors need to do? Collect additional ination to include photo identification, and identify document expiry and issuing country. Complete the IP-LP1165 and make a PEP/HIO determination. Advisors will need to collect new ination about the policy owners 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: Applying for new life insurance or annuity account (other than term or registered policies) When transfer of ownership is requested on such policies When converting a term policy to a permanent insurance contract with value When changing client ination or other transactions (such as foreign address/phone number) on such policies that could indicate a change in tax residency When death benefits are paid to an individual beneficiary with a foreign address or phone number or paid to an entity. Changes to your ivari business We have updated our s and s to comply with the new CRS tax reporting requirement and updates to AML requirement. Life insurance s New paper and electronic versions Forms updated list below 2

3 New Applications/s and eapplication The following s/s are affected and the updated versions are available on ivari.ca in the Administration/Forms section. The printed s will also be available for order on ivari express on June 13. Transition rules for Life Products Name of / Insurance Insurance Policy Change Conversion Notice of Transfer of Ownership Allocation s Politically Exposed and Head of International Organization (HIO) Old number/ version (LP257) 9/15 and 2/16 (LP257) 11/16 (LP386) 11/15 (LP1285) 12/15 (PS371) 12/16 (PS425) 10/16 or (WFG-LP 1221) 10/16 (IP-LP1165) 9/15 New (6/17) version (LP257) 6/17 NOTE: 9/15 & 2/16 will NOT be accepted after August 24, 2017 Effective June 17, 2017: Additional s required if you answer YES to $100K lump sum payment question (LP257) 6/17 (LP386) 6/17 (LP1285) 6/17 (PS371) 6/17 NOTE: 9/15 is no longer accepted (PS425) 6/17 or (WFG-LP1221) 6/17 (IP-LP1165) 6/17 3 Effective July 1, 2017: Additional s required if you are submitting an old version (pre 6/17) Owned by Individuals: Sections 2 & 4 (only if change in ownership is also being made) (only if a payment of $100K or more is being made) Owned by an Entity: IP-LP1747) 6/17 (only if change in ownership is also being made) N/A The must be submitted after June 17, 2017, if a lump sum or more is being made or will be made.

4 Insurance 6/17 version Key updates: Removed Corporate non-corporate entity or trust identification section on pages 10 and 11. If the Owner is an entity (corporation, non-corporate entity or trust), they now need to complete the IP-LP1747. Client identification documents have changed when applying for a Universal Life policy. Only an original non expired government issued photo identification, such as provincial health card (except in PEI, ON and MB), driver s license or Age of Majority are the acceptable s of identification. Document expiry date and issuing country has been added as a requirement for identification Policy Owner section 16 has been updated with the new CRS rules. The advisor must verify identity and tax residency of all Owners. Section 16 g) Persons and Head of International Organization The question about $100K lump sum payment has been revised. If Owner/Payor answers Yes, then they must complete the PEP/HIO (IP-LP1165). Removed the APS and MVR in the Underwriting requirements section because ivari now orders on behalf of the advisor. eapplication June 26 changes All templates related to the Insured, Juvenile, Owner Person, Owner Business for UL were updated with the new rules in place. We also updated the Foreign Person template and renamed it to PEP/HIO. 4

5 Name of / Current number/ version Transition rules for Investment Products Additional s required for AML (effective June 17, 2017) Additional s required for CRS (effective July 1, 2017) Individuals Entities Individuals Entities ivari Guaranteed Investment Funds Application Single Premium Immediate Annuity (SPIA) Application Guaranteed Interest Account Application Transfer of Ownership (IP1299) 11/16 If a lump sum then complete (IP-NB151) 9/15 If a lump sum then complete (IP1303) 9/15 If a lump sum then complete (IP1270) 6/17 If a lump sum then complete the If the new Owner is a corporation, non-corporate entity or trust you must submit a signed and completed. Dealer Nominee Transfer Non-financial Services (IP1186) 6/17 (IP426) 6/17 Complete the Declaration of tax residency section only if the transfer is to client name non-registered plans. If the transfer is to a corporate held non-registered account then must be completed. If a non-canadian address change is requested, then complete the Declaration of tax residency section of the. 5

6 Death Claims Additional requirements may be required at time of claim, please see below: Beneficiary Type Individual with foreign address or phone number Forms required for CRS (effective July 1, 2017) Entity (IP-LP1601) 6/17 Where can I go for more ination? CRS AML If you have any questions, call us between the hours of 8:00 a.m. and 7:00 p.m. ET. Monday to Friday. TM ivari and the ivari logos are trademarks of ivari Canada ULC. ivari is licensed to use such marks. IV1873 6/17 6