Thursday, December 30, 2010

(No.129) Nasty times in America (with Donald Westlake, Lee Child et al)

The United States has produced (and continues to do so) some of the very best English language novelists in what is variously referred to as the genre of mystery/private detective/crime/police procedurals. As I have written in previous columns American authors share the top spots on my favourites list with today's gritty British writers in this genre. My next column on (No.130) will look at some of the latest from the Brits.

Donald Westlake was a prolific novelist, 100+ books written under his own name as well as several pseudonyms ( see "American Crime Fiction", column No.121 on He died on Dec.31, 2008 at age 75 after a long and very successful career.

One of his series involved a group of minor league crooks in New York City led by a sombre chap named John Dortmunder. The books in this series are funny and what turned out to be his last one Get Real (2009) is now out in paperback. It involves the gang being approached to be the subject of a television reality show about criminals planning and executing a crime.

This is the story of a caper told as well as any have been by Westlake. I will miss reading new Westlake novels.

James Swain started writing novels, seven so far, featuring a leading character (Tony Valentine) an ex-New Jersey cop who is expert at detecting and catching casino cheats (see, for example, Grift Sense ). His other series, one begun more recently, involves a Florida private detective named Jack Carpenter, another ex-cop but one who left under a cloud his job as the head of the Broward County Police Missing Persons Unit.

The latest of Swain's three Carpenter novels, The Night Monster (2009), has the central character discovering a connection between an early and unsolved case of his own and the current disappearance of his daughter's friend that involves serial killers.

I have not enjoyed the Carpenter series as much as I have the Swain novels featuring Tony Valentine set in the gambling world. Nor as a writer of crime/mystery novels is Swain yet in the premier league but his stories are an entertaining and satisfying read.

Another fairly new American entrant in the 'detective' genre (at least new compared to Donald Westlake or Elmore Leonard) is Chris Knopf. Several crime/mystery novels set on Long Island New York (in particular that part of the island called 'the Hamptons') have a former engineer/big business executive Sam Acquillo as the central character [see The Last Refuge].

In his latest volume, Short Squeeze (2009) a heretofore peripheral character in the Acquillo novels -- lawyer Jackie Swaitkowski -- takes centre stage. Neither the new central character nor this plot ring as many bells for me as did the Acquillo mysteries. But the book is worth a read.

Lee Child is an Englishman now living and writing novels in the U.S. His books feature a nomadic and extremely tough ex-soldier named Jack Reacher. Thus far Reacher has wandered through 15 novels in a bestselling series, the latest two -- both published in 2010 -- being 61 Hours and Worth Dying For .

On occasion, if the reader pauses to think about it, the Reacher character seems too improbable: a former U.S. Army brat who becomes a tough as nails military policeman and detective. He left the army as a major and under a cloud. He eschews all permanence and travels the U.S., usually hitchhiking, with (literally) no more than a toothbrush and the clothes on his back (lately an ATM card and passport has perforce been added to this short list of possessions).

Reacher is not a superhero but he is a large man highly skilled in weapons and physical combat. These skills and related characteristics combined with his wandering lifestyle facilitate use of different locales and plot points for Child's novels and are among the keys to their considerable appeal.

All the Reacher novels are worth reading with interesting plots, although some are more absorbing than others. These latest two volumes in the series are particularly good.

As a character Jack Reacher most reminds me of the professional criminal named Parker in the series created by Donald Westlake writing under the name Richard Stark. It is also a series I have enjoyed very much.

Yishai Sarid, an Israeli lawyer and journalist, has written his second novel Limassol (2010, translated from the Hebrew by Barbara Harshav). It is a rather dark look at the life and activity of an Israeli secret service interrogator. His marriage is going pear-shaped while he tries to get Arab detainees to divulge information that will allow identification of suicide bombers before the bombs go off.

The core of this novel involves the sending of this lead character on an undercover assignment, one he tries to refuse, to set up a terrorist leader for assassination in the town of Limassol in Cyprus.

This is a novel with a very different tone, setting and perspective than many of this genre that customarily make American bestseller lists.


Alastair Rickard


Monday, December 20, 2010

(No.128) Does God look like Mayor Binwanger?

Browsing in a cruise ship library I came across a 1985 novel, North Gladiola, by an American author of literary fiction James Wilcox. He is the author of nine novels, the first and his best known (Modern Baptists) was published in 1983 and the most recent, Hunk City, in 2007.

Wilcox, who is now a professor at Louisiana State University (LSU) in Baton Rouge, was born in Louisiana and his novels are set in or feature characters from the fictional setting of Tula Springs, Louisiana located near the border with the state of Mississippi.

James Wilcox is a talented writer of comedy of manners and a very funny creator of the whimsical and the complicated. As I remember it one of my earliest experiences of laughing out loud because of what I was reading in a novel involved Mark Twain's Huckleberry Finn. Sadly, in the subsequent decades of my reading novels I have not had that experience nearly as often as I would have liked. Happily one of those times came while reading North Gladiola.

The book's plot revolves around Ethyl Mae Coco, a Mississippi native and a Baptist who converted on her marriage to Roman Catholicism but now at age 57 has become a secret doubter of her faith,. She is the mother of a brood of dysfunctional adult children as well as being a player in and the energetic leader of a local chamber music group called the Pro Arts Quartet. She wants to turn the Quartet into a cultural jewel of Tula Springs but their engagements tend to be playing at the openings of local restaurants. Her relations with the members of this group as well as with her husband and children are a major source of humour and animate the plot.

As the years have passed Mrs. Coco has developed deep-seated religious doubts. As chairperson of the Rosary Altar Society Bake Sale, Wilcox writes, "it depressed her that she would have to stand outside Our Lady [Church] all day selling cakes for a God she wasn't sure she believed in. The trouble was, the more she thought about this God she had been praying to for so long, the more distinct His features became; to her dismay she discovered that He bore a striking resemblance to [Tula Springs] Mayor Binwanger .... Of course, she realized this was absurd, but when she tried to banish this image there was nothing but a vague, beardlike cloud to take its place."

Even after they have novels published writers of literary fiction very often struggle financially to make a living from working as full time novelists. James Wilcox certainly did when he lived and worked in New York City. There is a fascinating article in The New Yorker magazine (July 4,1994) "Moby Dick in Manhattan" by James B. Stewart. It provides a close look at Wilcox's life as a novelist and his financial relationship with publishers.

One learns that the potential American market for a book of literary fiction published in hardcover is not only very far from being in the hundreds of thousands of copies typical of popular fiction bestsellers but distant from even (for most) sales of tens of thousands of copies. Indeed a recognized and critically successful novelist like Wilcox struggled in New York to live off publishers' advances and royalties from his novels. In 2004 he began teaching creative fiction at LSU back in his home state (he is 61).

James Wilcox's novels are still in print, a signal achievement these days for a writer of literary fiction. He is a fine novelist. His clever, witty and accomplished writing deserves to be widely read and enjoyed.

As for North Gladiola, for me it was truly refreshing -- like a cool drink on a hot day. I intend to read his other novels.


the novels by James Wilcox:

1. Modern Baptists (1983) 8 editions

2. Polite Sex (1991) 3 editions

3. Sort of Rich (1989) 4 edtions

4. Plain and Normal (1998) 3 editions

5. Guest of a Sinner (1993) 4 editions

6. Miss Undine's Living Room (1987) 4 editions

7. North Gladiola (1985) 4 editions

8. Heavenly Days (2003) 4 editions

9. Hunk City (2007) 5 editions


Alastair Rickard


Tuesday, December 14, 2010

(No.127) Strange meets unusual: Barcelona's Sagrada Familia

It is not one of the seven wonders of the world but if there existed a formal list of widely recognized architectural wonders and/or oddities, ones with a fascinating back story, then The Expiatory Temple of the Holy Family Church -- "Temple Expiatorio de la Sagrada Familia" in Barcelona Spain would earn a place.

It was the idea of a Barcelona bookseller, Josep Maria Bocabella, who in 1866 founded the Spiritual Association of Devotees of St.Joseph.

The structure and the story both involve a Catalan native son, a giant in the architectural history of Barcelona and Catalonia: Antoni Gaudi (1852 - 1926). Several of his creations can be found in Spain outside Catalonia but the leading examples are in Barcelona (see "Antoni Gaudi of Barcelona: the Catalan Elvis Presley?", column No. 125 of December 2, 2010 on

Gaudi's architectural style has been described, perhaps unkindly but not without some basis, as Art Nouveau run wild. His life became intertwined in the 1880s with the Church of the Holy family, the Sagrada Familia, when he was only 31 and remained so until 1926 when he was knocked down by a Barcelona tram and died a few days later. In death his name lives on, inextricably bound up with one of the most bizarre and long-lived architectural projects imaginable, one that is still ongoing today after 130 years and unlikely to be completed before 2030 (the 'official' goal) -- if then.

As he grew older Gaudi's religious piety and intensity increased. He had been commissioned by the Spiritual Association of Devotees of St. Joseph, to build a cathedral (take your pick) for the poor of the city of Barcelona OR to provide a place of atonement for the city's increasing decadence. On the other hand, the Association's founding objective had been to achieve, through the protection of St.Joseph, the triumph of the Catholic Church in a time in which it believed dechristianization was being driven by the industrial revolution and the accompanying social changes. Few of the original members including Bocabella could have imagined that by 2010 the cathedral would not have been completed.

Gaudi had imagined a church in the form of a Latin cross over the initial crypt; above the crypt the major altar surrounded by seven chapels in the apse. Above each of its three facades there would be four towers, 12 in total, dedicated to the apostles, In the centre the tallest tower (170 m) dedicated to Jesus Christ. Over time he became obsessed with the building of the structure, eventually taking up residence in its crypt so as to be on the construction site. However by the time he died only the church's crypt, part of the apse , one of the facades and one tower had been completed.

The towers of Gaudi's Nativity Facade begin in the shape of a square and at a certain height become circular. The first tower was completed in 1918 and the set of four was finished in 1926, the year he died. The Passion Facade is on the opposite side from the Nativity Facade and has more marked and harder lines. The studies for this facade were completed between 1892 and 1917 but its construction did not begin until 1952 and not completed until 1978. The main facade is still under construction. Inside the church is intended to hold more than 5000 worshippers.

During the Spanish Civil War in the 1930s the church was desecrated by what are now referred to as "anarchists". This seems to be a politically correct reference to people on the Republican side of the Spanish Civil War who were fighting General Franco's Nationalists who were supported by Hitler's Germany and Mussolini's Italy. Nearly all of Gaudi's plans and models were destroyed. His designs were subsequently reconstituted from what photographs and documents could be found.

These days construction of the rest of the Sagrada Familia continues at a pace dictated by the annual inflow of donations and admission revenues from tourists, reportedly at a rate of 1 million Euros per month.

Today the Sagrada Familia exterior looks to a significant extent like a giant construction site albeit one visited by 5 million people each year. On Nov.7, 2010 Pope Benedict came to consecrate the cathedral and the preparations for his visit made the site, as Pat and I saw for ourselves a couple of days beforehand, particularly crowded and chaotic.

In terms of its size and grandeur it is an impressive structure already but a controversial one. Today, under the direction and interpretation of architect Jordi Bonet, the Passion Facade is far more modernistic than Gaudi's Nativity Facade. The former includes giant sculptures on the exterior by Joseph Maria Subirachs; they look, and not just to my eye, out of place in comparison with Gaudi's own facade and original design.

The critic Robert Hughes who, in his book Barcelona, called this facade and the Subirachs sculptures "the most blatant mass of half-digested moderniste cliches to be plunked on a notable building within living memory". Hughes' negative view is more elegantly expressed than mine.

The Sagrada Familia seems to me breathtaking in scope, size and ambition but a dog's breakfast of design. Imagine the following: architects working for owners of one of the giant Las Vegas 'theme' hotels like Caesar's Palace or Treasure Island or The Luxor are commissioned to build a hotel the appearance of which is to suggest to tourists yet unborn an art nouveau European cathedral. I suggest that the exterior of the Sagrada Familia cathedral, or at least one of its facades, could serve as a model.

However it is only fair to point out that there are today just as many if not more fans of the way the Sagrada Familia is evolving as there are critics who deprecate its departures from Gaudi's ideas and style.

At least one thing seems clear to us following our visit to the cathedral: time spent in the magnificent city of Barcelona should not be considered complete without going to the Sagrada Familia.


For information and pictures visit:


Alastair Rickard

Wednesday, December 8, 2010

(No.126) Fox News, Obama & U.S. fantasists

Recently I revisited the U.S. cable news network Fox News including the program The O'Reilly Factor, one of that network's "fair and balanced" programs -- to cite the Fox slogan, one that turns the meaning of that phrase upside down in the view of this Canadian.

Fox News is a major media home for right wing political fantasists and indeed its status can be described as the unofficial broadcast arm of the Republican Party. That reality is underlined by the fact that it currently employs all but one of the current leading contenders for the Republican presidential nomination for 2012: Palin, Huckabee and Gingrich.

I was a bit surprised to hear Bill O'Reilly actually deprecate the intense partisan political divisions in the U.S. and the promotion of hatred of the other side. If one grants that his comments were sincere and not merely disingenuous then one can only assume that he exists in some parallel universe. O'Reilly's program on Fox and even more so those of his colleagues like Sean Hannity and Glen Beck do exactly what he says should not be done: promote intense political division.

For example: Beck's conspiracy fantasies involving prominent individuals like financier George Soros and what Beck refers to as the financier's "surrogates" (apparently including President Obama). This silliness would be funny if it did not appeal to the credulity of too many right wingers and feed paranoia. For me Beck's style recalls the late Senator Joe McCarthy and his witchhunting comments of the 1950s about communists in the U.S. State Department.

I also heard O'Reilly attribute a major part of the massive US government deficit problem to the funds paid by the US federal government to help operate PBS, the American non-commercial Public Broadcasting System. I heard no reference to the hundreds of $billions on the American credit card paid by President Bush and the Republicans to fight two wars while lowering taxes paid by those with the highest incomes. But then PBS has long been a favourite target for the American right because of its 'liberal/leftist' programming, all the more so if it can be coupled (as part of opposition to tax reform) with rhetoric about the top 1% or so of taxpayers paying 40% of American taxes.

There was an interesting article in the Nov. 2010 issue of The Atlantic magazine: "Truth Lies Here -- How can Americans talk to one another let alone engage in political debate when the web allows every side to invent its own facts?" It referred to the comment by the American Senator Daniel Patrick Moynihan that each of us is entitled to our opinions but we are not entitled to our own set of facts. Nowhere does that admonition seem more relevant than in the U.S. today as political arguments from the left and right play out in the blogosphere and the mainstream media, with Fox News as a leading example.

The sort of 'facts' asserted by Fox's commentators to their American viewers will not include, for example, that the top 1% of Americans own 34% of America's private net worth while the bottom 90% own 29%. Or that 57% of U.S. wealth created since 1976 has gone to 1% of the population. Or that the U.S. has the biggest income disparity of any industrialized country. Such facts do not fit into the cloud-cuckoo-land into which far too much of American political discourse has descended in recent years.

Instead, assert as 'facts' threats to American "freedom and values" from the actions of President Barak Obama; call him a fascist or a communist or a socialist. However be sure to ignore the fact that he has been trying to deal with the colossal mess left to him by President Bush based on Republican spending and the favoured tax treatment of the wealthy and the hundreds of billions of dollars spent to prevent the U.S. financial system from melting down. Why? Because of Wall Street pirates and incompetents being able to take advantage of ample opportunities for illegitimate financial gain provided by elected Republicans' sustained and disastrous worship of deregulation icons, genuflection that began with the first President Bush.

The analysis of American political and economic reality offered nightly by Fox News' talking heads may perhaps be most aptly likened to something written for them by Lewis Carroll if Alice in Wonderland had a contemporary American setting.

Barak Obama assumed the presidency in Jan 2009 inheriting gargantuan accumulated deficits and financial bailout commitments already in place from the Bush years (President Clinton left Bush with a substantial surplus). Now Obama is a carrying a political can filled with financial excrement deposited there in large measure by his Republican predecessor and Republican congressional majorities in both houses of the American congress for 6 of Bush's 8 years in office.

The U.S. political system is dysfunctional. Whether it will regain equilibrium in the near future is very much in doubt -- all the more so as one looks at the volume of absolute nonsense that marked the 2010 U.S. mid-term congressional election campaigns.

The Republican electoral gains in November -- control of the House of Representatives and de facto veto power in the Senate -- means that any attempts by Obama to address pressing issues in a substantive way will go nowhere during the next two years. For example: allowing Bush tax cuts to lapse at the end of 2010 for those earning $250,000+.

As this is written it is being reported that a deal has been reached between the White House and the congressional Republicans which will continue all the Bush tax cuts for another two years in return for, inter alia, an extension of long term jobless benefits for another 13 months (financed by borrowing rather than spending cuts), the whole deal at a cost in the hundreds of $billions.

Thus the U.S. continues to move ever closer to the financial precipice with continued deficit spending and levels of foreign borrowing at unsustainable levels -- all in the cause of allowing Americans to maintain a national economic regime they are unwilling to pay for with necessary levels of taxation. The fact is that few American politicians of any standing now in office (including President Obama) will tell the American public clearly and forthrightly that they and their governments must face up to reality: the only way back from the precipice is sharply reduced spending by government AND significant tax increases for taxpayers, not just at top levels but also in the broad middle class.

How likely is it that any realistic political action will occur? One of the many discouraging indications: President Obama appointed a bipartisan Deficit Commission to recommend how this challenge might be dealt with, i.e., to look hard at the fact that government debt is now at 60% of GDP and rising. The Commission had 18 members, including Republican and Democratic co-chairmen, and if its recommendations were endorsed by 14 of the 18 members then they would have to be considered by Congress. It has just reported and only 11 of its members would support their own report's substantive recommendations for action on government spending reductions combined with tax reform and higher taxes.

A majority of American voters as well as their political leadership plus their media profess alarm about the fiscal mess (as cable news talking heads and the Tea Party demonstrators repeated ad nauseam in the run-up to the Nov. 2010 mid-term elections). Yet many actually seem to prefer living in a financial, economic and governmental dream world. While there is great upset because of the huge growth in government deficits (federal and state) with widespread calls for reduced government spending -- not, it seems, if it really addresses the biggest political elephants in the room: the rising costs of social security (govt. pensions) and medicare/medicaid (govt. health care).

There is as yet neither sufficient political will nor enough strong elected leadership required to address substantively the U.S. fiscal crisis -- as Canada did under Finance Minister Paul Martin and Prime Minister Jean Chretien and as Prime Minister John Cameron's U.K. coalition government is trying to do now with its draconian spending cuts and tax increases.

If President Obama is re-elected in 2012 for his second term -- and the Republicans' nominee for president may be the best guarantee of that -- and if his re-election were to be combined with Democratic congressional majorities we may see him provide the sort of leadership the United States will need even more desperately two years hence.


Alastair Rickard


Thursday, December 2, 2010

(No.125) Antoni Gaudi of Barcelona: the Catalan Elvis Presley?

One cannot visit Memphis Tennessee without being submerged in references to Elvis Presley. On a different cultural plane the same can be said of Barcelona Spain and the Catalan architect Antoni Gaudi. [The Spanish translation from the Catalan language of his name is Antonio, a rendering one also sees in English.]

Antoni Gaudi i Cornet was born in 1832 in a rural part of Catalonia, a region of Spain then as now a home for the very nationalistic Catalan people -- and Gaudi was a nationalist. Today Catalonia is one of Spain's 17 autonomous regions.

A lifelong bachelor Gaudi grew increasingly eccentric as his religious piety intensified. He was knocked down by a tram in 1926 after leaving his work at the site of the Segrada Familia cathedral in Barcelona (where by then he had taken up residence in the crypt). He died several days later in a pauper's hospital from which, because of his political convictions, he refused to be transferred. He is buried in the crypt of the cathedral.

While Gaudi is not as widely known outside Spain as he deserves to be, in his hometown he is omnipresent as both a Catalan hero and cultural icon as well as the creator of what have become major tourist attractions in Barcelona. He was the key figure in the design and construction of the cathedral Sagrada Familia begun in the 1880s. Today it is still not completed although it was consecrated on Nov.7, 2010 by Pope Benedict. By coincidence Pat and I were in Barcelona that day.

In the older part of Barcelona one can travel up the marvelous avenue Passeig de Gracia and view a five story house, Casa Batllo, the renovation and decoration of which Gaudi designed (it was completed during the 1906-08 period) for the industrialist Joseph Batllo. It forms part of the island of buildings known as the "manzana de las discordia" (block of dissension) because its buildings belong to so many different architectural styles.

Gaudi's work on Casa Batllo included enlarging the building's patio, changing the ground and main floor facade, crowning the roof and redistributing the building's interior spaces. The interior patio was enlarged and covered with ceramic pieces designed by Gaudi. They are dark blue at the top and their hues get progressively lighter toward the ground floor, eventually reaching white.

It is difficult to convey how striking the combination of room design and colour is in Casa Batllo (see the pictures on the websites listed at the end of this column). Gaudi's approach to the design of the interior space makes it remarkably striking. So representative of the architect's style is the space that even in the second floor lounge one can gaze out of the Gaudi-styled bay windows while sitting on a reproduction of one of the chairs he designed.

On the sidewalk fronting the building on de Gracia people often crowd around taking pictures of the exterior of Casa Batllo. The interior is open to the public and attracts visitors in droves. It is in the heart of the old city on a highly fashionable avenue and is considered to be a fine example of the modernista building, a style also referred to as Catalan Art Nouveau.

When it comes to unusual creations in which Gaudi had a major role I would award the leading position to the Sagrada Familia (about which I will write more in another column) but Casa Batllo is unique -- in the proper sense of that word.

Across de Gracia and up a few blocks is Casa Mila, a large Gaudi-designed apartment building. It was the last great civil (i.e., non-religious) work with which Gaudi was involved as an architect before dedicating all his time to the construction of the Sagrada Familia. The owner, Pere Mila Camps, had liked Gaudi's transformation of the Batllo house and asked Gaudi to construct a large building of apartments on land he owned at the corner of de Gracia and Provenca street. Gaudi designed a structure based on wrought metallic girders and Catalan-style vaults and it was built between 1906 and 1910.

Owned since 1986 by a Spanish bank (Caixa Catalunya), the building is popularly referred to as La Pedrera which means the 'quarry". It is another of Gaudi's impressive creations which survive in Barcelona today.

La Pedrera occupies an entire block and has a huge interior space, from bottom to top of the building, for air and light and around which the apartments are situated. The building's rippling facade of roughly finished stone is moulded and rounded to resemble cave dwellings, a supposed reference to caves although I don't see as all that apt. The building's rock-like exterior appearance accounts for its nickname. Its strangely shaped wrought-iron balconies do enhance its exterior appearance.

The building was restored in 1996 and since 1999 the public has had limited access to La Pedrera, limited because most of the floors are still occupied (as they have been since 1911) by private apartments. The roof has strangely shaped chimneys and ventilators with undulating walkways and magnificent views of old Barcelona. On the top floor are located a Gaudi museum and a furnished apartment recreating a bourgeois family's home in Barcelona as it would have been in the first quarter of the 20th century.

Casa Batllo and La Pedrera are both so unusual and impressive that any visit to Barcelona could be considered incomplete if they were not seen. There are other places around the city with which Gaudi and his highly distinctive designs (including furniture and gardens) are also associated but Casa Batllo, La Pedrera and Segrada Familia should provide any visitor to the city more than enough to be getting on with -- unless that visitor is a devotee of both architecture and Antoni Gaudi and wishes to dedicate a Barcelona visit entirely to Antoni Gaudi.


Information about these three Gaudi-related locations can be obtained at the following websites, all of which are excellent and each of which provide impressive pictures of the structure's interior and exterior:





Alastair Rickard


Sunday, November 28, 2010

(No.124) Names to ponder: Great-West Life, Joseph Belth, Alan Press, Primerica

Joseph Belth
, editor of THE INSURANCE FORUM (Ellettsville, Indiana), has long been regarded by many people in and out of the North American life insurance industry as one of the most effective, informed and fearless critics the industry has. He has long been an inspiration for me.

Joe and I first met years ago in Toronto at a hearing of the Ontario Legislature's Select Committee on Company Law. He was testifying as an expert witness because the Committee was looking into the life insurance business.

I have always thought that one of the keys to Joe's effectiveness as a critic of the life insurance business as well as to his understanding of its reality lies with his experience in the business. Before Joe did his graduate academic work and began his long career as a professor of insurance studies, he was an agent. [His Ph.D dissertation was on the subject of participating life insurance issued by stock life insurance companies.]

Unlike too many of the life insurance industry's critics and 'analysts' as well as far too many of its senior executives, Joe Belth learned early on that the business is at the end of the day -- as I never tire of pointing out -- about "selling stuff".

After Joe saw my Oct.8, 2010 column " Great West 0, par policyholders 1 " on (No. 118) about Bill Rudd's successful challenge to Great-West over the use of money from London Life's par policyholder fund to help finance its takeover of London, he invited me to do an article on the subject for his INSURANCE FORUM. It is the monthly publication he's been editing for nearly four decades.

I was pleased to do so and the article, an adaptation for a mainly American audience of my column on, is entitled " An Important Court Decision Relating to Rights of Participating Policyholders in Canadian Stock Companies". It appears in the Dec 2010 issue (VOL.37, NO.12) of the INSURANCE FORUM.

I am pleased to appear in the pages of Joe's publication not only with him but also with another American friend from the life insurance business: Alan Press, CLU. He is today the senior v-p of Wealth Advisory Group and was for 34 years a general agent in New York City for Guardian Life. He is a distinguished and much honoured member of the U.S. life insurance industry.

The first time I recall reading any serious criticism and comment about the A.L. Williams life insurance organization in the U.S. (now called Primerica) was more than three decades ago and it was written by Joe Belth and published in his INSURANCE FORUM.

His work on the subject of A.L. Williams caused me to pay particular attention to the Williams bunch when they came to Canada at the beginning of the 1980s. I editorialized about ALW in the pages of my Canadian Journal of Life Insurance, gave speeches and a guide to ALW in Canada which I prepared enjoyed some popularity with Canadian agents.

Meanwhile in the U.S. Alan Press became the most energetic and hard-hitting industry critic of the Williams/Primerica organization and its distribution strategy revolving (then as now) around systematic and indiscriminate policy replacement. As I recall I got to know Alan at the time of our joint assistance to a Canadian freelance magazine writer in her writing of what turned out to be an award-winning article on ALW in Canada.

I well remember attending an industry meeting of life insurance agents in Ontario some years ago at which Alan was the featured speaker on the subject of ALW/Primerica. A phalanx of ALW people arrived and tried to give him a hard time with their aggressive questioning and heckling; in short they tried to intimidate him in front of an industry audience -- but they did not know him. He handled them with ease.

I mention this anecdote here because Alan Press recently wrote a very interesting update and critique of the Primerica operation in the U.S. today. It too appeared as an article in the INSURANCE FORUM: "The Primerica Replacement Empire", in the Nov. 2010 issue (Vol. 37, No.11).

For those interested in how much or how little ALW/Primerica has changed as a life insurance distribution organization: contact the INSURANCE FORUM for a copy of the article. To give you a taste of its flavour here are several numbers from Alan's article concerning Primerica's 2009 performance in the U.S.:

-- number of new Primerica recruits in the year: 221,920

-- average number of life insurance licensed Primerica sales reps in the year: 100,569

-- number of policies issued in 2009 per licensed Primerica sales rep: 2.3 [2007 - 2.5]

-- fee income to Primerica derived from its new recruits in 2009: $27.5 million

Joe Belth and Alan Press: two men I am pleased to know and with whom I am happy to appear in any forum.

contact information for the INSURANCE FORUM:

PO Box 245,
Ellettsville, Indiana 47429
(812) 876-6502
Alastair Rickard


Tuesday, November 23, 2010

(No.123) Insurance journalism & James Daw of The Toronto Star

I have been out of the country for several weeks and did not post any columns to during that time. In the previous 22 months I had written 122 columns on various subjects so it seemed that both I and RickardsRead readers were due a respite.


As readers of may know I worked in the life insurance industry at the head office of the first Canadian mutual life insurance company: The Mutual Life Assurance Company of Canada. At the beginning of the millennium the company was unnecessarily and mistakenly demutualized at the instance of its senior management, became a stock company [as Clarica Life] and was soon thereafter taken over by Sun Life Financial.

During more than a decade out of the years I spent at Mutual Life I also (as a spare time activity) published and edited the Canadian Journal of Life Insurance. I conceived it to be my modest contribution to the industry's mental health although whether it had any measurable effect is open to debate.

CJLI was intended to be -- and always was -- an independent forum for informed criticism and comment about the industry and (contrary to the public and private assertions of various know nothings over the years) the Journal was always entirely separate from my then employer. In fact after the first issue appeared (a rather large surprise to Mutual Life's senior management) I came within a hair of being terminated and I was informed in writing by the CEO that my employment was hanging by a thread. It turned out to be a thread with remarkable tensility.

After more than a decade CJLI gradually went to sleep as the spare time I used to prepare and publish each issue was subsumed by the increasing proportion of my 'spare time' on weekends spent working on Mutual Life business.

During these years I became known by and acquainted with various media people who had a regular or occasional interest in the life insurance business. I was contacted regularly by such persons, usually on the basis of being an unnamed and often unacknowledged source by journalists seeking information/perspective/story angles/quotes.

My experience with the financial media over the years as a source, an observer and an informed consumer helped shape my less than worshipful attitude to those to whom I have often referred in these columns as members of the financial services paparazzi.

In this connection my favourite anecdote involves a piece written by a journalist at the (Toronto) Globe and Mail's Report on Business. The deadline was looming for this reporter and an editor was pressing for copy and I was called for help. When the article appeared the next day it was the only occasion in my life I became three people: an "informed observer", an "industry expert" and a "life insurance industry executive".

All of the foregoing is by way of being a preamble indicating that my opinion of the financial media is informed by direct experience over many years.

The leading exception to my scepticism involving the financial services paparazzi and the financial media in particular is financial journalist and columnist James Daw of The Toronto Star, Canada's largest circulation newspaper. After a career of several decades with The Star he is taking early retirement at the end of this month, an occasion that deserves to be marked.

I have known Jim Daw during most of his career (and mine). I made it a point to read his work. I have not been reluctant to offer my opinion publicly and privately that I regard him as the best informed newspaper journalist in English Canada on the subject of insurance and the insurance business -- both life and p & c.

Based on experience, hard work and study he acquired a thorough understanding of what is so often missing in those whose contact with the insurance business is brief and callow: an understanding of how it really works and why it works the way it does. Indeed he has an understanding superior in its breadth to that of many of the insurance executives I have known.

Just a couple of examples: Daw co-authored an award-wining examination of a subject that was opaque to many in both the media and the life insurance business: the financial collapse of Confederation Life. His annual survey of out-of-Canada health insurance is not only superbly useful but unique in its comprehensiveness and reliability. He was the journalist who from the outset (publicly) understood the potential significance of the class action on behalf of London Life par policyholders against Great-West. Since the 1990s Daw consistently paid attention to the subject in print up to and including the judgement ultimately handed down recently in favour of the par policyholders [see "Great-West 0, par policyholders 1", column No.118 on].

Over the years I have respected Jim Daw's integrity, his high standards of reporting and writing, the quality of his research and his informed opinions and perspective. During my decades in the life insurance business as an executive, a writer and an editor there has been no Canadian journalist for a mainstream publication writing about the insurance business who equals the consistent superiority of his work.

I salute James Daw for a journalistic career of fine work and genuine merit -- and so should the life insurance industry, or at least those within in it who know enough about the reality of the business which employs them to recognize quality work.

In January 2011 Jim Daw will be joining on a contract basis the Insurance Bureau of Canada as a senior writer. He will be working initially on an examination of auto insurance systems around the world. The IBC has made a smart move.


Alastair Rickard


Friday, October 29, 2010

(No.122) Banks: rediscovering the past

In September I spoke to a conference of ife insurance brokers held at the Crowbush Resort on Prince Edward Island. The meeting was organized by the MGA firm Younker and Kelly. The column below is derived from that presentation.


Sometimes, in financial services as in life, what's thought to be old is new again. By the 1990s Canada's big banks were looking to shed many of their 'bricks and mortar' branches, not adding more; how old-fashioned branches were in the digital age. Fashionable and trendy business wisdom (and we all know how flawless that is) represented bank branch retailing as the way of the past.

Banks saw the future clearly: they wanted customer use of branches and tellers to be sharply reduced so they could cut their costs and increase their already bloated profits. Indeed they were anxious for their Canadian retail customers, the backbone then as now of their profitability, to pay more and steadily higher fees for the privilege of serving themselves at bank ATMs as well as online.

Today one can see the fundamental shift in that conventional wisdom. While banks still love their ATM fees -- even more than ever -- they have realized that their branches are not only important but a gold mine generating lots of luscious income from (for example) sales of asset products by branch staff (commissioned and otherwise).

The big banks have been adding branches to their extensive national networks and are treating them more like retail sales outlets than ever before. Fifteen years ago or so 70% of the big banks' business was corporate; today it is more like 70% retail. And bank profits continue to set records.

But while many bank customers use online banking to pay their bills and the like, it turns out -- as TD Canada Trust has the led the way in demonstrating (up to and including opening bank branches on Sundays) -- that branch networks are more important to profits than ever in marketing financial products and services to consumers, including those who are already a bank's customers as well as those who are not.

Can one conclude that banks have actually learned more about the value of person-to-person distribution tied to actual service when it comes to distributing financial products which the majority of their customers will not take the initiative to purchase from them online? This is of course a fact of financial services life that many executives in the life insurance business (although, sadly, far from all) have never forgotten.

Finally, I cannot pass by the opportunity to rehearse a point I have made before in these columns as well as in speeches. The praise heaped upon the big Canadian banks and their senior managements for the banks' admirable performance (i.e., comparative record of safety) during the international financial crisis really belongs mostly to the sort of strong Canadian federal banking regulation (about which Canadian bank executives have actually complained) and to strong federal regulators who enforced the rules whether the banks liked it or not.

These were the factors that had most to do with preventing the Canadian banks from following some or much of what their peers in the U.S., the U.K. and elsewhere did. Even so it is interesting that the big Canadian banks in the 3 years 2007 through 2009 wrote off an estimated $21.5 billion they would otherwise have recorded as profit because of their exposure to bets they made largely on American investments that blew up.


Alastair Rickard


Monday, October 25, 2010

(No.121) American crime fiction

Three of my favourite American wrtiers have recently come out with new novels.

Carl Hiaasen, Florida-born and a longtime columnist for the Miami Herald, has built a huge following for his novels set in Florida. They incorporate sharp and effective commentary about the destruction of Florida's natural habitat by developers and their political allies. Star Island (Knopf, 2010) follows Cherry Pye, a young female pop star on her way to being a 'has been', trying to make a comeback. She has a double who appears in public for her when she is too wasted to function. A problem arises when Cherry's double is mistakenly kidnapped by an obsessed celebrity paparazzi. She gets help from a half-crazed ex-governor of Florida.

This latest novel is not Hiaasen's best but it is better than many of the bestsellers out there and well worth reading for pleasure.

Archer Mayor lives in Vermont and works as an investigator for the state's chief medical officer as well as being a deputy sheriff. He has written more than 20 novels. His series featuring a cast of Vermont police characters led by Joe Gunther are often referred to as 'police procedurals'. I think that makes a novel sound formulaic, even dull. Mayor's novels are not. His latest, Red Herring (Minotaur, 2010), again features Joe Gunther of the Vermont Bureau of Investigation.

It places more emphasis on cutting edge forensic technology than some readers like me may care for but he knows how to use Gunther to advance an interesting plot. While Mayor is not in the same league of crime novelists as the Scot Ian Rankin, most who write in this genre are not. I have followed the Joe Gunther novels for years with considerable enjoyment.

Michael Connelly has for some years written novels featuring L.A. police detective Harry Bosch. More recently he created another series character: criminal defence lawyer Mickey Haller. In his latest novel, The Reversal (Little Brown,2010), Connelly has the two working together on the retrial of a convicted child murderer for which Haller has been persuaded by the LA district attorney to act as an independent prosecutor. The novel has an interesting plot and several surprises.

Donald Westlake died nearly 2 years ago at the age of 75, one of the most highly regarded of American crime/mystery writers with output and longevity combined with quality perhaps rivaled in the American crime genre only by Elmore Leonard. He was an even more prolific novelist than many of his readers knew since he also wrote under pseudonyms (at least 16) including Richard Stark. It was as Stark that he created as the central character of a series of novels a professional criminal named Parker, an unsympathetic individual but a sociopath not a psychopath. In other words he was violent when he saw a reason to be but not gratuitously.

From 1962 until 1974 Stark [Westlake] wrote 16 Parker novels. For years thereafter there were no more and then in 1997 he returned to writing Parker stories. The Parker novels are spare noir crime fiction and well plotted. If you like them you like them quite a bit. And I do. All the Parker novels by Richard Stark are being republished in softcover format by the University of Chicago Press (2010) and are in bookstores now. Try Deadly Edge, The Green Eagle Score, The Sour Lemon Score or The Black Ice Score.

Another long series of excellent American crime novels featured private detective Lew Archer. The series was written over several decades by Kenneth Millar from Kitchener-Waterloo, Ontario who, living in the U.S. where he had been born, wrote under the name of Ross Macdonald. His California location provided apt settings for his novels written beginning in the mid-1940s; he died in 1983.

Some critics regard Macdonald as the literary successor in crime fiction to Dashiell Hammett and Raymond Chandler. I can see why although I am not sure that it is an appropriate category for him. His two dozen novels have been republished in soft cover by Vantage and provide the reader with many hours of reading pleasure. Taste this crime fiction flavour by reading The Goodbye Look or The Way Some People Die or The Barbarous Coast.


Alastair Rickard


Tuesday, October 19, 2010

(No.120) A reply from Conrad Black

On July 23 this year I posted a column (No.104) to "Rooting for Conrad Black" in which I began by referring to my having attended Carleton University in Ottawa at the same time as several interesting people including Conrad Black. I went on to explain why I had been "rooting" for him in his legal difficulties in the U.S. and quoted from an email I had sent to him after he went to prison.

I received several responses to that column, most recently from Conrad Black. With his consent I present below his comments as well as excerpts from selected responses from followers of RickardsRead.

A suggestion: for readers to appreciate the context of Conrad Black's comments (below) they can read or reread my July column to which he is responding. That column (No.104) is easily accessible -- like all columns on -- via the links listed by date appearing in the left hand margin beside every column.


an email of Oct 17, 2010 from Conrad Black:

Your comments about me in July, just as I was released from prison, have turned up in a troll through the heavy message traffic of that time as I was changing residential and email addresses and I apologize for my lateness in thanking you, once again for your kind words.

I was as confident as you say, not because I have much regard for the American justice system, but because I knew the facts and knew the poverty of the government's case and the liberties the prosecution had taken to win every sliver of the charges that they made at trial. They started with 18 counts, 13 went to the unsolomonic jury, and only four were not acquittals, and they were nonsense.

There was, and could be, no evidence of a crime and all their witnesses appeared with rods on their backs extorting perjury. We tore their witnesses to pieces and they dropped three of their counts during the trial. Even during the trial, a good part of the media saw how weak the case was, but flopped back to pile onto me when there were a few convictions. There never was any alternative but to fight it out, and either win or go down fighting.

Your kind words are no less appreciated for that. I share your admiration for Naomi Griffiths [a history professor and Dean of Arts at Carleton University] but have not been in touch with her for some years. In fact, you motivate me to call her.

I knew Esmond Cooper-Key slightly, via my late friend Wilda Lossing. He was as you described. Of course I know his Harmsworth relatives now. I don't recall meeting Patrick Shaughnessy but did meet, presumably, his father, a pleasant man, though no world beater in any field.

I don't think any of us qualify as the British aristocracy. Those are the great Tory and Whig hereditary peers, like the Marquis of Salisbury, the Duke of Norfolk and Lord Carrington. The best of them are impressive people and give a glimpse of how the British controlled so much of the world with what was essentially a confidence trick of an empire.

As you wrote, there was a time when I had few defenders in public, though more, privately, than was evident. Your gracious and, if I may, perceptive comments, were gratefully received initially and when restated. I take the latest piece as a comparison of my personal qualities to those of Rocket Richard and Jean Beliveau and could not fail to be deeply flattered by that.

You are a thoughtful and generous man and I would be pleased if our paths crossed one day.


from an email Oct 18:

As I said I would, I called Naomi Griffiths and had a very nice talk with her. I had had no contact with her for seven years. She is in good health and spirits and is writing a biography of Romeo Leblanc, the former g-g. Thank you for putting me in mind of her. There are no friends like old friends. Best wishes to you.


Conrad Black


Excerpts from selected email responses to column No. 104 "Rooting for Conrad Black" by several current and former financial services executives:

1. I fully agree. He was pursued for politically correct reasons and although some may have found the personal service agreements inappropriate, none were concealed and he built an empire. The naysayers have effectively destroyed [shareholder] value and shareowners are certainly not better off than when Conrad was at the helm.

Thanks for the well stated views.

2. Well said. I admire you for similar reasons. [Also for ] your steadfast dedication to our [life insurance] industry and, most significantly, career field forces.

3. I agree with you. Black is characteristic of one of the better traits in many Canadians and I continue to root for him.


CORRECTION: in column No.118 "Great-West '0', par policyholders '1' ", there was a typo that requires correction. I stated that as part of its financial arrangements for the takeover of London Life, Great-West Lifeco had transferred $20 million from the Great-West par policyholder fund to the shareholders. In fact the amount of that transfer was $40 million.


Alastair Rickard


Sunday, October 17, 2010

(No.119) Great-West & London Life [+Manulife] receives a variety of interesting responses to the views I express in my columns. I periodically select excerpts from a number of them for presentation here (see below).

As in previous presentations of responses from readers, for reasons of privacy I have withheld email writers' identities unless they write to RickardsRead in an official capacity. However in order to provide context for their views I have preceded each excerpt with a brief reference to the writer's role or connection to the subject.

Words in italics are mine.


Ref. -- COLUMN NO.118: "Great-West '0',par policyholders '1' [about the Ontario court decision in the favour of a par policyholder class action against Great-West Lifeco -- $455.7 million -- over its use of par funds in its takeover of London Life.]

1. from a securities lawyer:

A splendid account with historical depth that makes me wish I had at my command a tenth of what you have forgotten. It led me to try to track down a CLU text I used to rely on, Pedoe and Rudd ("D.S." [Rudd], someone else it appears) Life Insurance and Annuities in Canada, ca. 1993 ....

[Note: D.S. Rudd is in fact the 'Bill' Rudd to whom I referred in Column No.118. His first name is D'Alton. He revised and updated the original text by Arthur Pedoe. It is an excellent work of reference.]

2. from a Canadian life insurance executive:

Cheering ... cheering ...cheering... Way to go Bill Rudd and thank you Al for letting us know about it. I had NO idea and of course didn't read about it anywhere.

3. from a former London Life regional manager:

I knew Bill Rudd when he was chief actuary at London Life and to say that he was brilliant is not an overstatement. ... I enjoyed your piece on Bill.

4. from an executive at a major Canadian life insurance company competitor of London Life:

Great article! Here's to Bill Rudd.

5. from an American insurance professor:

Thanks for a great article! I never met Bill Rudd but I wish I had. He is my kind of guy.

Ref. COLUMN NO. 116: "Trying to bury a turd on a frozen pond" [about trying to sell individual life insurance 'directly' without using selling 'traditional' agents]:

6. from a Canadian internationally experienced life insurance executive:

Great article as always. But an important point is missed and it should be more of a positive. Just think of all the expert witness retired [life insurance] underwriters can work on as they prove there was nondisclosure [on direct life insurance sales].

Since the real underwriting will be done at claim time there should be lots of work for all --- just like creditor [group] insurance where more and more it appears risk selection is done after death or disability.

7. from an American life insurance person of long experience:

Years ago (probably 1979) I was in a meeting with Larry Jenkins, then president of Monumental Life and some guys from outside North America. My international friends had heard Larry say in a presentation that Monumental used ordinary, home service, and direct response distribution methods. They asked how the company could use direct response and still keep the sales force happy.

Larry's response was: "We pay them (the agents) a commission if they can prove that they lost a sale to one of our direct response products. If they go into a situation where a prospect tells them that the prospect bought a direct response product in the last year we give the agent the commission he would have earned on the product if he had sold it."

Larry then said: "Guess how many commissions we paid last year! (Pregnant pause) Less than five .... Our agents don't contact the kind of prospects who buy our direct response product."

If companies want to compete with their agents by offering direct response products, they would do well to consider Larry's option. The [direct sales] marketing strategy probably creates a lot more angst than actual damage to the agents, but why annoy those who have made you successful?

Ref. Column No. 113: "Manulife & Sun Life: a safety parallel?"

8. from a policyholder of John Hancock Life Insurance Co. of Boston, a company taken over by Manulife in 2004:

I just read an article on Manulife that you wrote last month comparing their recent financial difficulties to that of Sun Life back in the Depression. As a John Hancock policyholder, how concerned should I be about the parent company's problems? My policies are well in excess of state guaranty limits. Thank you in advance for any advice/comments that you would be willing to make.

[ I exchanged emails twice with this policyholder explaining why I considered Manulife's recent profit performance and related financial matters NOT to be a threat to the safety of the policyholder's contracts with Manulife's subsidiary.]

9. from an executive of a large Canadian life insurance company:

Great article! It's interesting how history shapes us.

10. from a Canadian career agent:

Thanks for the history lesson. Makes you wonder what people learn ... apparently not much.
It would be interesting if you could contrast this with the financial shape of the mutual companies both through that time and now through these current times.


Alastair Rickard


Friday, October 8, 2010

(No.118) Great-West '0', par policyholders '1'

It was at a Queen's Park hearing of the Ontario Select Committee on Company Law that I first met Bill Rudd. The legislative committee was looking into the life insurance business -- and quite a serious effort it was. For example: I recall that one of the invited witnesses was Professor Joseph Belth (one of the best informed industry critics in the U.S.) who gave them a slant on policy disclosure that they did not expect. The Committee's Report on Life Insurance was published in June of 1980.

At this time Rudd was a senior executive of London Life, then still controlled by the Jeffery family. Indeed I recall that there was industry talk that he would be a future London CEO. Control of London Life subsequently passed to a Toronto (non-insurance) company and Rudd left London Life in the early 1980s.

In October 1997 Great-West Lifeco, one of the Desmarais family's financial vehicles, beat out the Royal Bank in a $2.9 billion competition for ownership of London Life. As part of the financial arrangements $180 million from the funds belonging to London Life's participating policyholders (for a stock company, London Life traditionally sold an abnormally high proportion of participating life insurance) and $20 million from a Great-West par fund were used by Great-West to help pay for its takeover of London.

When Bill Rudd received his London Life 1997 annual report in March of 1998 he learned that the par policyholders of London and Great-West were contributing $220 million to the takeover. At the subsequent London Life annual meeting Rudd rose and pointed out that what was being done was illegal under Section 462 of the federal Insurance Companies Act which prohibits such transfers out of par funds ( footnote -- these 'borrowed' funds were not repaid to the par accounts).

At the time Rudd questioned the legality of the transfer the response to his objection was to refer to the opinions of several actuaries who had been commissioned to provide justification for the arrangement. I have long regarded as a disgrace the fact that the Office of the Superintendent of Financial Institutions (OSFI), Canada's federal insurance regulator, turned an accommodating eye to what was being done with and to the financial interests of the par policyholders of a federally incorporated life insurance company. It remains to this day a blot on OSFI's record.

During the remainder of 1998 Rudd tried to persuade various involved parties that this action was a great mistake. He prepared to launch a class action but was pre-empted by another action by a different party which started first. It stumbled along for several years without result.

By 2005 Bill Rudd was able to launch his own class action lawsuit working with James Jeffery, a member of the Jeffery family who was also formerly an actuary with London Life, and a third London policyholder, John McKittrick. The action was on behalf of 1.8 million policyholders. It finally came to trial (judge only) in Ontario Superior Court in London Ontario on Sept. 28, 2009. The trial took 45 days and concluded on Jan. 15, 2010.

On Oct. 4, 2010 Judge Johanne Morissette released her decision. The decision awarded $455.7 million in compensation to the par policyholders. As one of the largest Canadian awards for a contested class action in our history it -- and the reasoning on which it was based -- is very significant, far more so than the financial media's longstanding lack of attention to the class action and the trial itself would indicate. Even when the significance of the decision was clear, the case apparently still could not compete for appropriate editorial attention with the financial ephemera and corporate cheerleading that fills so much of the financial media these days.

Of course Great-West will appeal the decision, not just because of the award's size but also because of the implications in terms of setting a precedent with -- it is to be hoped -- positive implications for the rights of par policyholders of stock life insurance companies. This should have been a much greater concern long since.

I once asked a former federal Supt. of Insurance whether a par policyholders' director in a stock life insurance company (who is supposedly on the board to represent a company's par policyholders) had ever approached the regulator about the way the company's par policyholders were treated? His answer: "never". I suspect, based on my involvement in the industry, that nothing has changed since. This makes it all the more important for OSFI to regard the Great-West decision as a prompt not to fall asleep at the switch.

Bill Rudd had argued from the beginning that what had been done with par policyholder funds was illegal. Finally, 13 years later, Judge Morissette concluded that " there was no legally justifiable method to deprive the participating policy accounts of the merger synergies, except by changing the allocation methods in a lawful and proper manner, which was not done in this case."

Rudd, an actuary and former London Life executive, took the lead in this affair. He was the person who objected to an illegal action by a large conglomerate, an action which federal insurance regulators should have reversed but did not. Bill Rudd refused to be quiet about this case although most of the corporate media were content to be so most of the time (with a few notable exceptions like Toronto Star financial columnist James Daw and Bloomberg News), right the way through the 13 years and the 45 day trial.

Bill Rudd, now age 80, rose to object 13 years ago and he never backed down from the challenge of taking on one of Canada's largest corporate interests. Not only par policyholders of these companies but Canadian life insurance consumers generally are in his debt -- although few will ever realize it. I salute his courage, dedication and perseverance. I thank him for the light he has caused to be directed at the important subject of policyholders' rights.

Quite apart from 'takeovers' of the sort involving London Life and Great-West, it is time for federal insurance regulators to pay far closer attention to what stock life insurance company managements and boards of directors are allowed to do (and not do) vis-a-vis their policyholders (especially par).

The expenses stock life insurance companies charge against the company's par funds (to the profits of which shareholders by statute have restricted access) need more careful monitoring so that par policyholders do not -- in effect -- end up paying for costs which should be charged to non-par business and therefore against shareholder profits. A company's setting of dividends for shareholders versus those on the policies of par policyholders is another subject worthy of scrutiny -- in demutualized companies in particular.

Finally, a prediction: Great-West may well drag out this decision on appeal for as long as it can. But if the case should happen to reach the Supreme Court of Canada, its decision will favour the par policyholders whose interests Bill Rudd represented so doggedly for so long.


Alastair Rickard


Monday, October 4, 2010

(No.117) Nova Scotia treasures

In comparing the painting of Nova Scotia folk artist Maud Lewis with that of Nena Sanchez of Curacao I referred to the role of the Art Gallery of Nova Scotia (AGNS) as the place to visit for anyone interested in the life and work of the late Maud Lewis (see "Maud Lewis & Nena Sanchez, Nova Scotia & Curacao", column No. 89 posted April 25, 2010 on

The time is past due for me to highlight a place that Pat and I visit every time we are in Halifax: the Art Gallery of Nova Scotia whose director and CEO is Ray Cronin. There are two connected gallery buildings in downtown Halifax housing the AGNS. They are well laid out and filled with worthwhile art.

The AGNS regularly presents special exhibitions and is currently mounting (until Nov 21) "The Atlantic Long List for 2010" of the Sobey Art Award. It features the work of this year's five Atlantic region nominees for the national Sobey award. The artists include Lucie Chen, Emily Vey Duke & Cooper Battersby, Mario Doucette, Graeme Patterson and Vanessa Paschakarnis. The art presented is diverse and includes video and sculpture.

The permanent installations draw us back to the AGNS. For the visitor they comprise a rewarding collection including historical Canadian works with a special emphasis on artists and subjects in the Atlantic provinces, expecially Nova Scotian.

At the moment there is a fascinating section devoted to the 300 Years of Nova Scotia's Annapolis Royal settlement which flourished in the late 1770s as a major arrival point for thousands of loyalists fleeing the American Revolution. Particularly interesting are the paintings done in 1775 by Richard Williams, a 2nd Lt. in the 23rd Royal Welch Fusiliers.

A floor of the gallery is devoted to the Folk Art of Nova Scotia, an appropriate allocation of space for the AGNS to make especially since elsewhere in the gallery it displays the tiny house once the home of Maud Lewis. The folk art on display ranges from paintings through ship models to wood sculpture including fish and birds as well as life size figures. It offers an impressive range of creativity including figures of the Obama family.

A particular favourite of mine is the part of the gallery housing the art donated to the AGNS by the Sri Lankan-Canadian businessman, author and philanthropist Sir Christopher Ondaatje. It includes pieces by Canadian artists who are favourites of mine like William Kurelek and Miller Brittain as well as Pat's (Jean Paul Lemieux and Paul Emile Borduas). His donation also bolstered the AGNS's interesting holdings of the Group of Seven.

There are other galleries. For example: the Art Gallery of Nova Scotia rightly devotes special attention to works painted by Wolfville, Nova Scotia resident and well known Canadian artist Alex Colville. The AGNS is currently marking his 90th birthday. This effort and much more make a visit not just interesting but eminently worthwhile.


While in Nova Scotia on this recent trip we also revisited two other provincial treasures, both near or in Annapolis Royal: the North Hills Museum and the Historic Gardens.

In 1964 retired Bank of Nova Scotia executive Robert Patterson, a dedicated art and antique collector, bought an old home built ca 1764 that was in need of repair and restoration. The home is located on what is sometimes called the oldest road in Canada -- the "Settlement Road" dating back to the 1600s -- not far from the early French settlement of Port Royal, also an attraction of the Annapolis Royal area.

Patterson supervised a lengthy and meticulous restoration of this 200 year old house, then installed throughout the house his extensive collection of mainly Georgian paintings, furniture and furnishings. He lived in the house himself, making it his home for the last eight years of his life (he was a bachelor).

On his death in 1974 he left the house, its contents and a fund for maintenance to the province of Nova Scotia. He also attached a couple of what I regard as wise and clever stipulations to this legacy: the objects in his collection must remain in the house and not be dispersed and they must stay in the rooms where he had placed them.

It is a lovely collection of 18th century art displayed in an interesting and historic structure staffed by well-informed guides, a treasure I suspect is often missed by visitors given its out-of-the-way location. It is well worth a visit to the Annapolis Royal area, especially if combined with other attactions in the area. For example: carry on down "the Settlement Road" to the Port Royal site.

From the Patterson house ( officially - the North Hills Museum) we drove into Annapolis Royal to revisit the Historic Gardens, an extensive 17 acre setting overlooking a tidal river valley and located very near the reconstructed Fort Anne just up George Street. It is a stunningly beautiful horticultural collection reflecting the past and present, operated by the non-profit Annapolis Royal Historic Gardens Society.

The Historic Gardens are divided into more than two dozen theme gardens and sections and include a cafe and shop. Pat's favourite was the lush and colourful Victorian garden, as was mine. Her second favourite was the Rose garden.

For a pleasant meal afterwards we dined at the nearby Garrison House Inn also on George Street. It is located in a restored home built ca 1854.

We regard all of these Nova Scotia places as treasures, each worthy of repeated visits and all ranking among the most interesting we have encountered anywhere in Canada.


For more information visit these websites:


Alastair Rickard


Friday, October 1, 2010

(No.116) Trying to bury a turd on a frozen pond

In September I spoke to a conference of life insurance brokers at the Crowbush Resort on Prince Edward Island. The meeting was organized by the MGA firm Younker and Kelly. The column below is, in part, taken from that presentation.


It would be foolish to minimize much less ignore the role of the internet as a rising force in the business of 'selling stuff'. How can one fail to be impressed, for example, by the fact that in 1992 there were only 50 websites and today there are more than 300 million?

Nor can even the technology Luddites with whom I have sometimes been grouped be blind to the contribution (albeit mixed) to the information age of Facebook, YouTube, Twitter and other new social media. I confess however to wondering how to measure the net improvement to the body politic's knowledge in North America when, to take just one current example, 27% of Americans think -- almost two years after the last presidential election -- that their president was not born in the U.S. while 18% believe he is a Muslim.

Such contradictions of the information age abound but do not interfere with the desire of many in business to believe that the availability to consumers of a new method they can use to buy products directly means that most or even many will use it to make a purchase even when it involves a notoriously client-resistant product like individual life insurance.

When it comes to distributing this financial product, and after decades of increasingly sophisticated attempts to take individual life insurance to the public using various non-agent methods, I wonder if these 'direct distribution' methods are not beginning to resemble the state of religious grace: nobody knows for certain where or at what moment it can be said to exist.

Indeed the predictions of the inevitable decline or obsolescence of the active, prospecting, selling agent and broker in favour of the rise of non-agent selling of individual life insurance have moved beyond being merely wrong-headed to being tedious -- but there is no shortage of CEOs and other life insurance executives who periodically discover 'direct' sales as the wave of the future, rather like the late Malcolm Muggeridge rediscovering Jesus.

The reality after years of 'direct' life insurance sales: the proportion of new individual life insurance annual premium in Canada from so-called direct, buyer-initiated, non-agent sales remains far less than 10% of the total.

Even with mutual funds, a financial product many people actually think they want, distribution is a key factor. This is a point the Bank of Nova Scotia would do well to consider carefully when it comes to negotiating a price to buy the rest of the shares of CI Financial (BNS bought Sun Life's 37.6% interest in CI for $2.3 billion in 2008, one that Sun had acquired by trading its own mutual fund operation and Clarica Life's larger one to CI.)

Why exercise caution? To avoid over-paying since an important element in CI's post-2000 sales success has been its preferred access to Sun Life's career agency distribution system, a system which produces quality business. I recall one year when more than 60% of CI's NET sales came from Sun's career agents. Now that Sun Life no longer has an ownership interest in CI it should long since have been actively seeking competitor interest from other mutual fund players for access to its distribution system, access which (unlike CI's sweetheart arrangement) requires an investment in that system's enhancement.

As with so many of the numbers among which life insurance executives can choose to prove their points, beware of the numbers used if there already exists a corporate commitment to demonstrating a growing significance for direct sales of life insurance, online or otherwise. In fact the bulk of current premium from direct, non-agent life insurance sales in Canada actually originates from creditors' group insurance of one sort or another distributed by banks, car dealers and that ilk.

Individual life insurance is less than 15% of the toal direct premium which in turn (including group with individual) is less than 15% of the industry's total premium from all distribution channels. In other words, when it comes to individual policy sales, it is a 15% share of a 15% share.

A life insurance company seeking to inflate the apparent success of its direct sales of individual coverage has various ways available. For example, it might count conversions by group certificate holders (on leaving an employer) of their group insurance to individual coverage as 'direct sales'.

Or a company could introduce for sale to the public online, say, a basic four disease critical illness insurance policy (CII) and when it became clear that consumer-initiated purchases made without the involvement of a traditional intermediary would be embarrassingly small, the company could try to redeem the situation by making the product available for sale by agents. BUT require agents to go online to complete their sales of this CII policy and then count the agents' sales as 'direct/online' sales.

However agency system life insurance companies can and do alienate their sales people when they -- the company -- competes with them (the agents) by introducing policies available directly to the public for purchase, policies the public may even perceive as superior to the same company's policies the agent/broker offers. Sun Life provides a recent example of this with the introduction in Canada this past summer of a yearly renewable term policy for 'direct' sale. After progress had been made at a much needed improving of Sun's career agency system's trust, loyalty and morale, especially following the return of Kevin Dougherty to the Canadian operation's CEO role, many Sun agents were disappointed and ground was lost -- and for what sort of new 'direct' premium?

As one experienced Sun Life agent wrote to me: "I am disheartened at today's announcement that Sun is getting into the online term business. Out of one side of our mouth we are saying 'proper financial planning requires an advisor' and out of the other side we are saying 'analyze your own need and purchase direct from us' ".

The modern history of non-agent selling of individual life insurance in Canada calls to mind nothing quite so much as the image of a cat trying to bury a turd on a frozen pond: there is focus and much concentrated effort but not all that much in the way of results (particularly if one sets aside the industry's promotion and sale of its own form of lottery ticket -- accidental death insurance).

If the sales from direct distribution methods actually increase significantly in future as a share of total individual premium, more than anything else it will be the result of the fact that too many life insurance companies operating in Canada have failed their own agency systems and agency distribution generally to the detriment of the consumer and advisor-based opportunities to buy this product.


Alastair Rickard

email: Alastair.Rickard@

Friday, September 24, 2010

(No.115) Somewhere Towards The End

Since beginning I have from time to time recommended books and authors whose work I have found rewarding. I do so because I assume that many readers of these columns are likely to share my enjoyment of good writing, fiction and non-fiction.

I very much enjoyed several volumes of memoirs by a fascinating Englishwoman, Diana Athill, who is now 93. An Oxford University graduate, raised in a problematic upper middle class home, she worked as a literary editor and herself wrote both novels and memoirs, retiring from her career in 1993 at the age of 75.

She spent 50 years in London publishing including helping Andre Deutsch build his British publishing house. She never married but had affairs, several long term relationships but no children.

Of several volumes of memoirs her first, published in 1962, Instead Of A Letter [Norton], is like all her non-fiction: still in print and available in softcover. It is about her youth and young adulthood including a broken engagement with a member of the RAF who later died during World War II.

It was for her one of a series of formative events and years later, writing this volume ca 1960, she said prophetically that "I see my story, ... sad though much of it was, as a success story. I am rising forty-three, and I am happier in the present and more interested by the future than I have ever been since I was a girl .... But is it a story which will seem worth having lived through, of value in itself, when I come to die?"

Doubtless Athill at age forty-three would never have predicted that she would still be alive and writing in her nineties -- but she is, and the reader is the more fortunate because of it.

During her career in publishing Athill worked with many well-know authors about whom she has interesting insights, including Philp Roth, Mordecai Richler, Simone de Beauvoir, Jean Rhys and V.S. Naipaul. Her 2000 memoir, Stet: An Editor's Life [Grove] is a refreshing look at the reality of literary publishing in post-war Britain. But she is not one one to look to the past as a literary golden age.

"It is, of course, true that reading is going the same way as eating," she wrote,"the greatest demand being for the simple, instantly recognizable flavours such as sugar and vinegar or their mental equivalents: but that is not the terminal tragedy it sometimes seems to the disgruntled old. It is not, after all, a new development: quick and easy has always been what the majority wants."

The Athill book which had the most impact on me (as I suspect it might on anyone who thinks about the end of life, including their own) is her prize-winning Somewhere Towards The End [Granta] written mostly when she was 90 and published in 2008. In all her books she writes not just well but with a pleasing clarity. Her use of the English language is so pleasing that one stops and rereads paragraphs to savour both a thought and its expression.

In this, her last book, she looks back with a complete absence of sentimentality and no hint of an aged curmudgeon. "It seems to me," she writes,"that anyone looking back over eighty-nine years ought to see a landscape pockmarked with regrets. ... Regrets? I say to myself. What regrets? This invisibility may be partly the result of a preponderance of common sense over imagination: regrets are useless, so forget them."

Athill offers views which will resonate with many readers and for different reasons. For example, with those who devoted their working lives to the service and interests of one or two employers and did so loyally, only to be tossed aside by the employer because of this merger or that corporate expense reduction. "Loyalty unearned," she concludes, "is simply the husk of a notion developed to benefit the bosses in a feudal system." Amen.

If only the average 50 year old CEO could think half as clearly and express himself or herself half as well as this 93 year old Englishwoman.

Somewhere Towards The End is an extraordinary book by an amazing woman who has lived a thoughtful and interesting life -- and has thought about that life in a serious way and shared those thoughts over several volumes.

It is both timely and welcome that Athill has written this volume now when popular culture still too often portrays people who reach age 80, much less 90 as little more than child-like, if not gaga. Her book thus provides the reader with a welcome antidote to the toxicity of pop culture. Just as, in the realm of Canadian politics, 89 year old Hazel McCallion does as mayor of Mississauga, one of Canada's largest cities.

Diana Athill has written an impressively thoughtful volume about approaching the end of life, the most affecting I have read on the subject. She has lived a long and worthwhile life that began during the First World War, reaching her old age with mental acuity intact in the second decade of the 21st century.

Nearing the end of her life she concludes that "digging out past guilts is [not] a useful occupation for the very old, given that one can do so very little about them. I have reached a stage at which one hopes to be forgiven for concentrating on how to get through the present."


In 2009 a 670 page volume of memoirs selected from four of her books was published by Granta: Life Class:The Selected Memoirs of Diana Athill.


Alastair Rickard


Tuesday, September 21, 2010

(No.114) Canadian banks: mistakes & excessive praise

Earlier this month I spoke to a conference of life insurance brokers at the Crowbush Resort on Prince Edward Island. The meeting was organized by the MGA firm Younker and Kelly. What follows is taken from that presentation.


In the wake of the financial services meltdown in the U.S. and Europe I have read and heard much praise heaped upon Canadian banks for their admirable strength and stability during the international financial crisis. The credit actually belongs mostly to strong Canadian federal banking rules (about which Canadian bank executives have periodically pissed and moaned) and even more important, to strong federal regulators who enforced the rules whether the banks liked it or not. Both of these key regulatory elements were deficient in the U.S. and Europe.

Those were the factors that had most to do with preventing Canadian banks from following some of the worst of what their American and British peers were doing in their pursuit of the financially ridiculous. Nor is it true that the Canadian banks received no crisis-related financial backing from Ottawa unless one excludes a $200 billion low interest line of credit.

In any case it is interesting that the big Canadian banks, despite their supposed superior management, in the three years 2007 through 2009 wrote off an estimated $21.5 billion they would otherwise have recorded as profit because of their exposure to bad bets they made largely on U.S. 'investments' that went down the porcelain convenience. [For other comments on this subject in, see column No.90: "Banks, stability & insurance: the silly & the wise".]

Still, not to worry; the huge profits the banks make quarterly from the Canadian retail banking customer serve as far more than an adequate offset for these and other losses in their non-Canadian adventures. It reminds me of the profits Sun Life derives from -- as its corporate perspective would have it -- its 'small population market' Canadian operation (compared with Sun Life in China, India, Indonesia and the U.S.). Funny thing though, these Canadian dollars serve as a predictably reliable financial foundation supporting the company in the absence of sufficient profits from its international operations.

In terms of government expansion of the big Canadian banks' still limited ability to retail insurance (life as well as property insurance) in their branches I do not look for any change, at the very earliest, before the election of a majority federal government, and probably not then. Keeping the status quo is a political reality that has been reconfirmed by federal finance Minister Jim Flaherty, in major part because no federal government (including his) wants another political fight with insurance agents, and all the more so if it is a minority government.

If it is also a government, like Prime Minister Harper's Tories, whose core political support is in areas of the country like the prairies where historically dislike for the big eastern banks is almost bred in the bone, it will not be seeking ways to accommodate the Bay Street banks' insurance wish list no matter how fervent their desire for change.

Even if the feds decided to change the rules for bank branch retailing of insurance (something they could do tomorrow by regulation rather than statute) it would still be a matter for each province to decide on what basis they would permit expansion of bank insurance retailing. Remember: which individuals can sell insurance, where and how has been confirmed by the Supreme Court of Canada to be a matter of provincial jurisdiction.

I confess that for more than two decades I longed both privately and publicly for the big banks to make the mistake to which I believed their unique combination of size, arrogance and ignorance might eventually lead them: to challenge in court provincial jurisdiction over insurance distribution as it involved federally chartered and regulated banks and how banks could and could not go about selling insurance.

I published (in a series of articles by the late life insurance company general counsel Benson Rogers in my Canadian Journal of Life Insurance) the definitive treatment, then and now, of the legal and regulatory history of the Canadian federal/provincial constitutional divide in insurance. I was confident that the bankers would lose, blinded as they were by their Pavlovian view that whatever banks do (including selling insurance) is banking and therefore excluded from provincial regulation even when it involved agency insurance distribution. And they did lose -- big time, to quote former U.S. Vice-President Dick Cheney.

The mistake I had long awaited was made by the banks in challenging Alberta insurance legislation. The banks lost their challenge in Alberta court, lost again on appeal and then compounded their mistake (God bless their arrogance and high-priced legal advice) by appealing the Alberta case [Western Bank v. Alberta] to the Supreme Court of Canada --- where in a May 2007 SCC precedent-setting decision they lost on all important counts, as I had predicted they would.

As for what the big banks can hope for in terms of provincial regulation, provincial governments have shown little affection for them and their persistent efforts to get their own way, not least because lobbying by p&c and life insurance agents can be even more politically potent at the provincial level than it has been in Ottawa. In fact at both the federal and provincial levels the p & c side of the insurance business has become the strongest element in the political fight over expansion of bank branch retailing of insurance.

When I think of the big Canadian banks' indefatigable commitment to getting ever larger as well as their dependence on the Canadian retail banking customer to bankroll their extra-Canadian financial adventures, I recall a comment made by K.R. MacGregor, Canada's federal Superintendent of Insurance and later CEO of the Mutual Life Assurance Company of Canada which he said "is not seeking growth merely for the sake of growing, but rather growth in order to serve better and more completely. The dinosaur's lesson is that if some bigness is good, an overabundance of bigness is not necessarily better."

While that seems today both wise and prescient it also sounds quaintly old-fashioned in an era when the pursuit of inflated executive compensation ensures that ramping up short term corporate profit through questionable activity (leveraged and otherwise) is too often the guiding light for senior management. Consider what has happened since 2007 in North American financial services and the economy (indeed the western world's) and one appreciates not only the foresight of Mr. MacGregor's observation but its relevance today to the largest Canadian banks and life insurance companies.

[For background on the reality of banks and insurance in Canada see also, for example, in column nos. 33, 34, 47, 48 & 69.]


Alastair Rickard