“This is to confirm and reassure you that our system and procedural flexibility means Canada Life will not restrict withdrawals from non-suspended funds even if a suspended property fund is amongst the assets of your clients’ bonds.
“This is thanks to the ability of our onshore and international bonds to accommodate fund specific withdrawals,” the insurer said in a statement issued to International Adviser on Friday.
However, if a suspended property fund is the only asset held in the life wrapper then “we would queue the redemption/withdrawal until the suspension is lifted”, added Canada Life.
Standard Life ban
It comes as earlier in the week, Standard Life confirmed it has put a “temporary” ban on customers withdrawing money from its life assurance bonds if part of their investments – however small – are held in commercial property funds.
The limit applies to three suspended property funds – the £4.4bn ($5.8bn, €5.2bn) M&G Property Portfolio Life fund, the £1.8bn Aviva Investors Property Trust Life fund and the £4bn Henderson UK Property Life fund.
The insurer explained the freeze on withdrawals was down to “how part surrenders are processed on our system”, adding that it is working to “resolve the issue as possible”.
Suspended funds
Last month, five of the largest UK property authorised investment funds (Paifs), among others, suspended trading in the wake of market volatility caused by the Brexit vote.
Standard Life Investment, Aviva and M&G all ceased trading on their respective funds due to an increase in redemption requests triggering share sales in property and asset management companies.
Meanwhile, Aberdeen Asset Management and LGIM both imposed value cuts to their funds in early July to put off investors from pulling their money out, although, at the time Aberdeen said the levy was imposed “solely to reflect the need to dispose of properties quickly in order to provide liquidity”.
