What happens to your policy if your insurer fails?

How rare is failure, really?

Canadian insurer insolvencies are uncommon. The reference case is Confederation Life, which failed in 1994 — one of the largest insurance failures in North American history at the time — yet policyholders were protected and coverage was transferred to solvent insurers. That's exactly the system working as designed. You don't need to obsess over an insurer's balance sheet for coverage within the guarantee limits below.

Assuris — life and health insurers

If a member life insurer becomes insolvent, your policy is transferred to a solvent insurer, and Assuris guarantees at least the following (each is the greater of the stated amount or 90% of the benefit):

For the large majority of Canadians, whose policies fall under these limits, coverage is fully protected.

PACICC — home and auto (P&C) insurers

If a member property-and-casualty insurer fails, the Property and Casualty Insurance Compensation Corporation steps in:

Don't confuse these with CDIC

People mix these up constantly. CDIC (Canada Deposit Insurance Corporation) protects bank deposits — chequing, savings, GICs — up to $100,000 per category. It does not cover insurance policies or segregated funds. Assuris and PACICC are the insurance backstops; CDIC is the banking one.

What this means for you

For coverage within the limits, you can choose an insurer on price, service, and product fit without losing sleep over solvency — the backstop is there. The one practical planning move: if you're buying a death benefit above $1,000,000, consider splitting it across two insurers (say, two $750,000 policies) so every dollar sits inside the Assuris guarantee. The same logic applies to very large annuities or cash values.