What happens to your life insurance if your insurer fails? Assuris protection explained

If your life insurance company fails, your policy does not disappear. Every insurer licensed to sell life and health insurance in Canada must belong to Assuris, an independent, industry-funded organization that steps in when a member becomes insolvent. It keeps benefit payments flowing, helps move policies to a solvent insurer, and guarantees you keep at least 90% of your promised benefits or a fixed dollar amount, whichever is higher. For a death benefit, that amount is $1,000,000.

Those limits took effect on May 29, 2023, when Assuris raised them from $200,000 or 85%. A lot of Canadian content still quotes the old figures. Everything below reflects the current levels, verified against assuris.ca in September 2026.

Assuris was founded in 1990 (as CompCorp) and is designated under the federal Insurance Companies Act and recognized in Quebec under the Insurers Act. It has participation agreements with all 14 Canadian jurisdictions, so it covers provincially incorporated insurers as well as federal ones. Membership is mandatory for every insurer authorized to sell life or health insurance in Canada, and a member cannot leave while it still has active business here. One nuance: fraternal benefit societies can opt in rather than being required to, so it's worth checking if your coverage comes from one.

Protection applies by type of benefit. The current guarantees, each "or 90% of the benefit, whichever is higher":

• Death benefit (term, whole life, universal life): $1,000,000
• Health expense (critical illness, supplementary medical, travel): $250,000
• Monthly income (annuities, RRIF income, disability, long-term care): $5,000 a month
• Cash value, accumulated value, and segregated fund guarantees: $100,000 each

"Whichever is higher" matters for larger policies. A $2,000,000 term policy is protected to at least $1,800,000, because 90% beats the $1,000,000 floor. Anything at or under the floor is protected in full. And protection applies separately to each policy and to each insurer, so several policies are each assessed on their own.

Protection is calculated on the date of failure, after any policy loans are subtracted. Assuris's own worked example: a whole life policy with a $1,250,000 death benefit and a $50,000 loan has a net benefit of $1,200,000, so $1,080,000 is protected (90%). Its $95,000 cash value becomes $45,000 after the loan, which is under the $100,000 floor and protected in full.

• Joint policies count as one covered person, not two. The same goes for joint-and-survivor annuities.
• Foreign-currency policies generally keep paying in their own currency. The limit is measured at the exchange rate on the day the company fails. Policies issued by a member in a foreign jurisdiction are not covered.
• Participating whole life keeps paying dividends, but the amount may be adjusted. Money left on deposit is protected as accumulated value.
• RRIF payments are fully protected up to $60,000 a year, which is the $5,000 monthly limit annualized.
• Group life through work is covered too, with the same $1,000,000 or 90% death benefit limit. Coverage continues until your plan's next renewal date or six months after the failure, whichever comes first.
• Segregated funds are protected for the contract's guarantee, not for investment performance.

1. The regulator takes control and asks a court for a winding-up order. A liquidator is appointed.
2. Assuris funds the liquidator so claims, annuity and disability payments keep being paid during the wind-down.
3. Policies are sold and transferred to a solvent insurer. If no buyer takes a block, Assuris keeps a dormant licensed subsidiary, CompCorp Life, that can hold it.
4. Your coverage continues at the new insurer, up to the Assuris limits.

You don't apply for Assuris protection and there's no claim form. The one thing to do is keep paying your premiums so the policy stays in force. Assuris is explicit that simply refunding premiums isn't an acceptable outcome, and that people cancelling in a panic erodes value for everyone who stays.

Assuris publishes the outcome of each Canadian failure it has handled:

• Les Coopérants (1992): about 220,000 policyholders, all fully protected.
• Sovereign Life (1993): 249,000 policyholders. 96% fully protected; the other 4% kept at least 90% of their benefits.
• Confederation Life (1994): 260,000 individual policyholders and 1.5 million group participants, with full recovery for Canadian policyholders. Canada Life later took over its Canadian immediate annuity business.
• Union of Canada Life (2012): 22,000 policyholders. 99% fully protected; the other 1% kept at least 95%. The policies moved to UL Mutual.

Read the 4% and 1% carefully: those are shares of people who lost something, not the size of the loss, which was capped at 10% and 5%. And that's why we don't repeat the line you'll see elsewhere that no Canadian policyholder has ever lost money. It isn't true. The accurate version is that coverage continued in every case and policyholders kept all or nearly all of their benefits.

Rare. Four in 36 years, and none since 2012. The federal regulator, OSFI, requires life insurers to hold capital well above their obligations. Under the LICAT capital test, the minimum Total Ratio is 90% and OSFI's supervisory target is 100%. OSFI also runs a staged intervention process and shares information with Assuris about any insurer it's concerned about. You won't see those ratings, though: distress generally stays private until the regulator takes control. That's the practical reason to rely on the protection floor rather than trying to judge an insurer's health yourself.

Assuris is funded by its members, not taxpayers. It keeps a liquidity fund with a $200 million target, then assesses every member company after a failure, whether that company is federally or provincially incorporated. All four past failures were covered this way.

In May 2026, Assuris amended its by-law to cap how much it can assess members for a failure: 4.2% of each member's assessment base over three years. The same month, Stephanie Greer became president and CEO. Neither change touched the protection limits above. Assuris has also been calling for Canada to set up a dedicated resolution authority for insurers, which the IMF flagged as a gap in 2025.

Canada runs four separate protection systems, and they're often confused:

• Assuris: life and health insurance benefits, limits by benefit type as above.
• CDIC: bank deposits, up to $100,000 per category per institution. It's a federal Crown corporation. A 2025 federal consultation proposed raising the limit to $150,000; that hasn't taken effect.
• CIPF: client property missing when an investment dealer fails, up to $1 million per account category. It doesn't cover market losses.
• PACICC: home and auto insurers, now up to $435,000 for auto claims and $545,000 for personal property.

CDIC has nothing to do with your life insurance.

Because membership is mandatory and every member funds the same pool, the protection floor is identical at every licensed carrier. A smaller or less familiar insurer carries the same Assuris guarantee as a household name. That doesn't make all insurers equally strong — capital levels differ — but it does mean that choosing between quotes is a decision about product and price, not a solvency gamble. If your coverage is large enough to exceed the limits, splitting it across more than one policy or insurer keeps more of it inside the floor. You can confirm any company on Assuris's member list.

How much coverage you need, and whether splitting it makes sense for you, is a conversation for a licensed life insurance advisor. This article is educational, not individual advice. Figures verified against assuris.ca and the other linked sources in September 2026.