Line of credit - Standard Life

Protection Solutions
Advisor’s Guide
Cash Surrender
Value (CSV)
Line of credit

Table of contents
Product Description 4
General Information 6
Identification and Third Party Determination 6
Financial Consumer Agency of Canada (FCAC) Regulation 6
Definitions and Information 7
Application Process Overview 8
Non-conformities 12
Appendix I: Documents Accepted for Identification Purposes 12
Communication
National Bank Partnership Branch
Mailing Address:
22 nd Floor
500 Place d’Armes,
Montreal, Qc H2Y 2W3
Tel. : 1-800-901-0172
Fax. : 1-888-307-2997
Centralized Mail Box: pbs@nbc.ca
National Bank Banking Services Centre
1-866-444-1379
National Bank Internet Banking Services Centre
https://bvi.bnc.ca/partnership
Standard Life Life Insurance Services
Life Insurance Services
P.O. Box 250 Station H
Montreal, Qc H3G 2K8
Fax. : 514-499-0255
Centralized Mail Box: LIS-After-Sales@standardlife.ca
Standard Life Customer Services Centre
1-888-841-6633
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Product Description
Features
The Cash Surrender Value Line of Credit Program will
be disbursed in the form of a personal line of credit,
secured by the applicant’s permanent non-registered life
insurance policy(ies) issued by Standard Life. Available
only for eligible permanent non-registered life insurance
policies (current eligible products are Perspecta UL, SLT 100,
SLT 100 – 20 pay, SLT 100 – pay to age 65, Superior Life,
Criterion Life, Omniflex and Indexiflex).
Eligibility Only available to qualified applicant based on the Bank’s standard credit policies and practices, including
the applicant’s credit worthiness. Single or joint applicants. Policy owner may be the applicant(s)
(i.e. individuals) or a corporation. Minimum annual income of $50,000 for single or multiple borrowers.
Applicants must provide balance sheet and proof of income. Applications that do not meet the minimum
income standard will be analyzed on a case-by-case basis taking in consideration the applicant’s total
net worth.
Minimum loan amount $10,000.00
Maximum loan amount The Bank will finance up to the lesser of the following financing limits:
• A line of credit-to-CSV ratio (including any policy loans) of 90 per cent in the event the CSV is in
eligible whole life policies or in fixed income accounts of a universal life policy.
• A line of credit-to-CSV ratio (including any policy loans) of 60 per cent in the event the CSV of a
universal life policy is invested in accounts that are not providing fixed income.
• A pro rata line of credit-to-CSV ratio in the event the CSV of a universal life policy contains both
types of accounts.
Note: The amount of the CSV used to calculate the credit limit shall be reduced by all amounts owed
on the policy (i.e. premiums, etc.)
Loan interest rate • Variable rate (Bank’s prime rate + a spread).
• The spread is 1.00% when the policy owner is an individual, 1.25% if the policy owner is
a corporation.
Access to funds Access to funds by using cheques or through:
• Automatic banking machine (ABM)
• Interac direct payment
• Internet or telephone banking
Repayment options Variable payments: (Variable rate only)
Minimum payment: (by default)
• Interest only
Optional payment:
• Fixed amount of principal
• Percentage of the outstanding balance
Capitalized interest:
Interest can be capitalized provided that the total amount due does not exceed the authorized credit
limit or the Loan-to-CSV ratio. (The provision of a personalized void cheque remains a requirement)
Available frequency:
• Monthly
Regular scheduled payments are set up via automatic transfers from the customer’s personal
National Bank of Canada account or from another financial institution.
A lump sum payment or full payout can be made without penalty by calling National Bank Customer
Service Centre at 1-866-444-1379
Interest Calculation Interest is calculated on the daily outstanding balance.
Client reporting National Bank monthly statement confirms:
• Minimum amount to be paid as well as the due date of the payment
• Payments made and current loan balance
National Bank monthly statement produced in January confirms the interest paid in previous year.
National Bank online statements are also available when subscribed on Internet Banking.
Fees • No application fees
• No monthly or annual fees
Fees applicable for Policies owned by a Corporation (to be debited from customer’s personal National
Bank of Canada account or from his(her) account from another financial institution)
• Negotiation fees (0.5% for the first $500,000.00 of authorized credit facility and 0.3% on any
amount exceeding $500,000.00 of authorized credit facility – payable up front).
• Registration fees applicable to Policy owned by a Corporation and constituted under Quebec laws.
The current registration fees can be found at the following link:
https://www.rdprm.gouv.qc.ca/rdprmweb/html/tarifs.asp.
Creditor insurance Not offered
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General Information
Identification and Third Party Determination
Identification of each Applicant and
Guarantor:
The “Proceeds of Crime (Money Laundering) and
Terrorist Financing Act” (the Act) requires financial
institutions to respect certain standards for
identifying applicants wishing to open an account
or benefit from a financial service.
In the presence of the individual to
be identified:
In order to establish an applicant’s identity
the Broker must obtain two original identity
documents from the individual to be identified.
The description of these identity documents must
be inscribed in the appropriate section of the
credit application.
The identity documents used to identify the
applicant(s) must be legible, valid and unexpired
originals in good condition. Photocopies are
not acceptable.
Financial Consumer Agency of Canada (FCAC)
Regulation
According to a new regulation from the Financial
Consumer Agency of Canada (FCAC) which is
in effect since January 1 st 2008, co-borrowers
are entitled to receive all regulatory information
including account statements.
Refer to the Appendix I in this guide for more
details on acceptable identity documents for
identification purposes.
Third Party Determination
It is required to determine if the requested product
is to be used under the name of a person other
than the applicant or co-applicant. When it
is the case, it must be indicated in the proper
section of the credit application and “Third party
information appendix” completed and provided.
This information is meant to allow the Bank,
in accordance with the law, to determine if the
Applicant (and Co-Applicant (if applicable)) opens
the account for his/her own financial activities or
the financial activities of another person or entity.
Consequently, co-borrowers can request receipt
of all regulatory information, by selecting the
applicable option in the “Account statement”
section of credit application.
Should that option be selected, the co-borrowers
will receive the following:
• Welcome letter
•
Account Statements
Definitions and information
Gross Monthly Income Employment income before income taxes. An employer’s pension is an
acceptable income, the same as employment income.
Other Gross
Monthly Income
The following types of income can be considered in a credit application if it
has been constant for the past three (3) years. Indicate the average of the last
three (3) years.
• Dividend income
• Interest income
• 50% of gross rental income
Non-Eligible Income • Family allowance
• Social assistance
• Worker’s Compensation benefits (eligible with official document proving
the permanent nature of the disability)
• Employment insurance
• Old Age Security
• Alimony
• Capital Gains
Debt(s) / repayments Amount of money due to a person or creditor:
• Credit Card: Calculate 3% of the outstanding balance
• Line of credit: Calculate 3% of the outstanding balance
• Mortgage Loan: Amount of the monthly payments
• Personal Loan: Amount of the monthly payments
• Other debts: Amount of the monthly payments
Monthly expenses Amount payable on a continuous basis
• Taxes (Municipal + School) (if the property is in joint ownership, include
100% of the monthly cost)
• Condominium Fees, Utilities Cost
• Rent, Leases, Other
• Alimony
Do not include any expenses related to rental property.
Endorser/guarantor • Contract binding a person, the endorser/guarantor, to repay the
applicant’s debt to the Bank should they fail to meet their payments.
• A separate “credit application” must be completed and signed by the
endorser/guarantor to obtain his personal and financial information.
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Application Process Overview
You can find all the proper forms and applications on Advisor Source at the
following link: www.advisors.standardlife.ca/en
1. Confirmation of the amount eligibility with
Standard Life
You must complete part A of the “Request for Eligibility Confirmation” form and fax it or email it to
Standard Life to obtain a confirmation of the eligible amount.
2. Complete all required documentation and
obtain any supporting documents
Documents:
• If it is the first time you submit a
credit application, please fill out the
Broker Enrolment form
• Credit application – CSV Line of Credit
• Security agreement on insurance products and
instructions to the insurer (in duplicate)
• Statement of existing policy to be given
as collateral
• Proof of income and assets (copies from
original documents)
• Personalized void cheque for payments
• Original policy (for Quebec resident when policy
owner is an individual). If original policy has
been lost, provide a “Declaration” form duly
completed and signed by the applicant(s)
(the “Declaration” form will permit Standard Life
to produce a “Certificate” in replacement of
the original)
• Third Party information appendix (if applicable)
(required only when the applicant(s) answer(s)
“yes” to the question related to that subject on
the credit application)
• Statement of existing loan at other financial
institution to be paid (if applicable)
Additional documents for Policy
owned by a Corporation:
• Resolution of the board of Directors (to be
completed and signed by authorized signatories)
For Corporation constituted under
Quebec laws:
• Copy of the most recent Corporation financial
statements
• Certificate of officer (to be completed and
signed by authorized signatories)
Additional information:
Consent of all irrevocable beneficiaries designated
on the policy must be obtained on the “Security
agreement on insurance products and instructions
to the insurer” form. (Please refer to “Beneficiary
section” on the “Security agreement on insurance
products and instructions to the insurer” form for
more details).
Co-applicant may request to receive all Regulatory
information by selecting the appropriate
check-box in the “Account statement” section of
the credit application.
Two original identity documents from the
applicant (and co-applicant, if applicable) must
always be seen by the Broker and recorded in
the identity documents section(s) on the credit
application. Refer to the Appendix I in this guide
for a list of documents accepted for identification
purposes.
Applications received without the identity
document information cannot be processed
until it is completed.
Broker signs Credit application as witness in the
“Completed by (witnessed by)” section (If the Broker
is submitting a credit application for himself, the
person who witnesses the signature must be another
Broker who is enrolled in the loan program).
3. Provide a Personalized Void cheque
Acceptable types of proof of
income and assets:
Proof of income:
• Salaried: copy of a recent pay stub (less than
30 days with cumulative salary) or past year’s T4;
• Most recent notice of assessment from
Revenue Canada;
• Self-employed: notices of assessment of the
last 2 years;
• Or any other documents required.
Proof of assets:
• Recent investment(s), RRSP, mutual fund
statements, etc.;
• Copy of the property tax notice or any other
municipal statement showing the value of the
land and building;
• Or other documents required.
In all cases (including the “Capitalized interest” payment option), to establish loan payments, always
attach a personalized void cheque from the applicant’s personal bank account. Business/corporate bank
accounts are not acceptable for establishing payments.
4. Leave copies with Applicant(s)
Non eligible assets: Jewellery, art collection,
employer’s pension plan, and Applicant’s business
assets, should not be considered when completing
the balance sheet section of the credit application.
Note: It is a legal requirement that the Broker
sees the original proof documents;
however, copies of the original documents
can be submitted with the application.
In all cases, leave a copy of all completed and signed documents with the Applicant(s).
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5. Sending the documents by fax to the
National Bank Partnership Branch for
submission of the Credit application
The Broker will:
• Send all required documentation including the
“Request for Eligibility Confirmation” and the
Broker Enrolment form (if applicable) by fax
to the National Bank Partnership Branch at
1-888-307-2997.
6. Receiving the credit decision
Documents to be faxed:
• Credit application – CSV Line of Credit
• Security agreement on insurance products and
instructions to the insurer
• Statement of existing policy to be given
as collateral
• Proof of income and assets (copies from
original documents)
• Personalized void cheque
• Request for Eligibility Confirmation
• Statement of existing loan at other financial
institution to be paid (if applicable)
• Third Party information appendix (if applicable)
Partnership branch will confirm the final credit decision to Broker and Standard Life by fax.
• The Broker informs the Applicant(s) about the decision
Note: Should a Guarantor be required, a separate Credit application form will have to be completed and
signed in order to obtain his(her) personal and financial information.
7. Sending the original loan package
to Standard Life
After having received the credit decision, the Broker sends the original loan package, including CSV
Checklist to Standard Life (declined requests must also be sent).
Refer to step 2 for documents listing.
When policy owner is an individual
who resides in Quebec:
• First page of original Policy or “Declaration”
form (if applicable)
When policy owner is a Corporation:
• Resolution of the board of Directors (to be
completed and signed by authorized signatories)
• Copy of the most recent Corporation financial
statements (if applicable)
• Certificate of officer (if applicable)
Once they have received all
documentation, the National Bank
Partnership branch will:
• Verify conformity of the documents received
• Enter and submit request into the Point-Of-Sales
(POS) system
8. Indicating the National Bank of Canada as
the first ranking secured creditor
9. Loan opening
10. Loan payout to another
financial institution
11. Final step
After having received the credit decision and original loan package, Standard Life will indicate the National
Bank of Canada as a first ranking secured creditor on the collateral, provided the policy has not already
been hypothecated or assigned to a third party. In that case, please refer to step 10. Standard Life will also
send a notice to the applicant, confirming the assignment.
The CSV Line of credit will be opened within a delay of 24 hours after the National Bank has received
all original documents properly completed and signed including a Statement of Security Interest from
Standard Life.
Should the proceeds of the CSV Line of credit
be used to pay another financial institution, the
National Bank Partnership branch will forward a
draft in the amount necessary to the Broker for
repaying the financial institution along with a
Payout letter.
The Broker will:
• Obtain the applicant’s signature on the
Payout letter.
• Remit the draft and obtain signature of the
other financial institution on the Payout letter.
• Retrieve the original policy from the other
financial institution (if the owner resides in the
Province of Quebec).
• Send the signed Payout letter and, if applicable,
the original policy to Standard Life.
Following this, Standard Life will indicate the
National Bank of Canada as a first ranking secured
creditor on the collateral.
In all cases, National Bank Partnership branch will send a “Welcome letter” to the applicant(s)* , as well
as a “Strictly between you and us” pamphlet and a “Banking Guide to Fees” brochure. If applicable, a
start-up kit for cheques, a client-card and/or enrolment for telephone or internet banking services will also
be sent with documentation.
*Note: The “Welcome letter” will be sent to the co-applicant only if the option was properly selected
in the “Account statement” section of the credit application.
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Non-conformities
Upon reception of the documents, the
National Bank Partnership Branch will verify the
conformity of the documents.
List of possible non-conformities:
• Missing signatures on document(s);
• Incomplete information on document(s) or
containing errors;
• Personalized void cheque missing for the
payment set-up;
Appendix I: Documents accepted
for identification purposes
The “Proceeds of Crime (Money Laundering) and Terrorist Financing Act” (the Act) requires financial
institutions to respect certain standards for identifying Applicants wishing to open an account or benefit
from a financial service.
Identification Methods Prescribed by the Act
• Information related to the identity documents
(2) missing or non-compliant on the “Credit
application” (see Appendix I for the accepted
documents) (for all new applicants and
guarantors);
• Any other missing document;
• Etc.
For any non-conformity, the National Bank
Partnership Branch will contact the Broker or
Standard Life for corrections.
In the presence of the individual to be identified
In order to establish an Applicant’s identity, the Broker must obtain two original identity documents from
the person to be identified. The following identity documents are accepted for identification purposes
(one document must come from Category A).
Category A
• Birth certificate issued in Canada.
• Driver’s licence issued in Canada.
1
• Provincial health insurance card
• Canadian passport.
• Social insurance card issued by the
Canadian government.
• Canadian citizenship certificate.
• Certificate of naturalization in the form
of a document or a card (excluding a
commemorative document).
• IMM 1442 immigration form issued by
Citizenship and Immigration Canada (CIC)
• IMM 1000 immigration form issued by CIC (for
permanent residents prior to June 28, 2002)
• Permanent resident card or IMM 5292
(confirmation of permanent residence from CIC)
• Certificate of Indian status issued by the
government of Canada.
• Old Age Security card issued by the
government of Canada.
• Identity card or document issued by one of the
following authorities and bearing the photo and
signature of the individual being identified:
- Insurance Corporation of British Columbia;
- Alberta Registries;
- Saskatchewan Government Insurance;
- Department of Service of Nova Scotia and
Municipal Relations;
- Department of Transportation and Public
Works of the Province of Prince Edward
Island;
- Service New Brunswick;
- Department of Government Services and
Lands of the Province of Newfoundland and
Labrador;
- Government of the Northwest Territories
Department of Transportation;
- Department of Community Government
and Transportation – Nunavut.
Category B
• Passport from a foreign country.
• Employee identity card issued by an employer
who is recognized in the community bearing
the photo of the individual to be identified.
• Applicant card issued by the Canadian National
Institute for the Blind (CNIB) bearing the photo
and signature of the individual to be identified.
• Applicant card or ABM card issued in the
person’s name by a member institution of the
Canadian Payments Association and bearing
the name and/or signature of the person to be
identified.
• Credit card issued in the person’s name by a
member institution of the Canadian Payments
Association bearing the name and/or signature
of the person to be identified.
N.B. – When checking the identity of an
individual, any documents presented must
be valid originals, not copies.
1 Manitoba, Ontario and Prince Edward Island do
not allow the use of health insurance cards for
identification purposes. It is also forbidden to
document the information on them.
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www.standardlife.ca
The Standard Life Assurance Company of Canada
6268-02-2008