Travelers Companies, Inc. today launched a major new enhancement to its SelectOne liability policy for investment advisors and funds in Canada.

The company’s new Independent Review Committee Liability Insuring Agreement will provide superior liability protection to Independent Review Committee (IRC) members.

National Instrument 81-107 requires the creation of an IRC for each investment fund that is a reporting issuer. The Instrument prescribes the functions of the IRC and requires that fund managers submit conflict of interest matters arising out of fund management to the IRC for review. IRC members are charged with making recommendations to the fund manager as to how these conflicts may be resolved. Travelers IRC Liability Insurance Coverage provides superior protection to members of the IRC when the investment fund or the investment fund manager does not provide them with indemnification, and will reimburse the investment fund or advisor when it does provide indemnification.

“IRC members may face liability for breaches of their obligations under National Instrument 81-107, as well as potential liability for negligence, negligent misrepresentation and/or breach of fiduciary duty,” says Phil Baker, vp, Travelers Financial and Professional Services in Canada. Baker notes, “Traditional Management Liability Insurance will not adequately protect the unique needs of the IRC members. Travelers created this policy to protect the personal assets of the IRC members by providing comprehensive dedicated coverage.”

The IRC policy can be combined with the existing mutual funds’ liability coverage with either shared or separate limits or offered on a stand-alone basis.

Some of the coverage highlights include:

  • Separate dedicated limit of liability for IRC members available;
  • IRC Member Individual Coverage may be purchased on a stand-alone basis or in conjunction with the mutual fund or advisor indemnification reimbursement coverage;
  • Non-rescindable against the Independent Review Committee members; and
  • Broad definition of Wrongful Act which provides coverage for IRC members for errors committed in their capacity as IRC members – coverage is not limited to the activities set out in National Instrument 81-107.

Independent Review Committee Liability Insurance Coverage is currently available from independent brokers located throughout Canada.