Friday, April 27, 2012

(No.195) The London Life/Great-West case: back to court

"The London Life/Great-West case: back to court"


Alastair Rickard

There have been developments involving a class action lawsuit [Jeffery v. London Life Insurance Company] led by D'Alton 'Bill' Rudd, a former London Life senior executive . He opposed the use of London Life participating policyholders' funds by Great-West Lifeco (controlled by the Desmarais family) in its Oct. 1997 takeover of London Life.

I have written several columns on this case for as well as an article for Joseph Belth's INSURANCE FORUM, a leading American publication in its field [see the references at the end of this column].

My view has long been that Canada's federal insurance regulator -- the Office of the Superintendent of Financial Institutions (OSFI) -- should not have allowed the use of ANY of London par policyholders' funds by Great-West to help finance its takeover of London Life.

After a decade or more the class action finally came to trial in Sept. of 2009 and the Oct. 2010 decision awarded $455 million to the par policyholders. London/Great-West appealed the Ontario Superior Court decision and on Nov.3, 2011 the Ontario Court of Appeal released its decision which, according to my somewhat inelegant interpretation, said in effect that London Life par policyholders had been screwed but they were not to be allowed to get anything very much back because of it.

More politely:  the decision had the effect of negating the financial compensation awarded by the Superior Court judge to the par policyholders while upholding certain aspects of the appealed decision. The judgement ended up cancelling the raiding of the par policy accounts but without upholding the $400+ million payout to the policyholders.

In writing about the Ontario Appeal Court's decision in a Jan. 13, 2012 column on I said that "one can still hope that the decision in this class action is appealed to the Supreme Court of Canada. If it is I think it likely that both the rights of par policyholders generally and a tougher look at OSFI insurance regulation might well be part of the benefit of a Supreme Court ruling."

In fact in early January this year a Leave to Appeal to the Supreme Court was filed by those leading the class action. A response was filed by Great-West/London Life to which, in turn, a reply was filed in mid-February. It is expected that by June it should be known whether the Supreme Court will hear the appeal. If it agrees to do so, it may not occur for a year or more.

If the Supreme Court of Canada does not grant leave to appeal, the leaders of the class action will then go back to the original trial judge (as instructed by the appeal court in Ontario) to seek clarification and to decide any differences with Great-West arising from the Ontario appeal decision.

Selected references:
  1. "Class action appeal: London Life & Great-West", posted to Jan.13, 2012 (column No. 185).
  2. "Great-West '0', par policyholders '1' ", posted to Oct.8, 2010 (column No. 118).
  3.  "An Important Court Decision Relating to Rights of Participating Policyholders in Canadian Stock Companies" by Alastair Rickard, INSURANCE FORUM Dec. 2010 (Vol. 37, No.12)



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Thursday, April 26, 2012

(No.196) Casino banking & the Wall Street shell game

"Casino banking and the Wall Street shell game"

by    Alastair Rickard

I have referred frequently in my columns to the greed, incompetence and general thickheadedness of many of the senior executives in the financial services business especially in the U.S. and particularly in big American banks.

I do not exclude Canadian financial services, with which I have both some experience as well as close observation, from concern. But the sort of regulation and enforcement here was absent in the U.S. and kept Canadian bankers from much indulgence in the sort of mind-numbingly stupid excesses which resulted in the financial crisis of 2008 et seq. However Canada's Finance Minister Jim Flaherty knows that the country's big banks are not the paragons that the Wall Street disaster made them seem by comparison.

Indeed, just recently Flaherty warned Canada's big banks that their lending practices have come to bear a troubling resemblance to those that caused the U.S. mortgage crisis. Hence the reason, in part, for the changes just announced by Ottawa involving the activity and supervision of the government's mortgage insurance agency, the CMHC.

The fathers of the financial crisis, after decades of steadily less financial regulation in the U.S., were primarily a club of 20 or so major 'Wall Street'/U.S. financial institutions.

Just as damning in its way as the institutional mismanagement which produced a near meltdown of the west's financial system was the silence of (and in the case of the rating agencies, the active participation in) what I refer to as the financial services paparazzi: the so-called experts in the rating agencies, the financial analysts in the various brokerage firms and consulting houses, the financial media, et al.

In terms of the pre-crisis activity of the financially self-aggrandizing mental midgets in charge of the Wall Street firms, the question is:  except for the very occasional lonely public voice, where were all the 'experts' as the billions and then trillions of  of dollars in toxic assets were "securitized" and resold? Did it not occur to any of these experts that what these firms were doing with their actual financial risk was deliberately structured to avoid New York state insurance regulation of what were in fact insurance contracts, regardless of the euphemisms used to avoid using the word insurance: e.g., credit default swaps and synthetic collateral debt obligations?

Of course the private, opaque and unregulated market for these derivatives was ever so much to be preferred to insurance regulation with all of its awkward and restrictive insistence on financial reserves to back risk. This was of course the sine qua non for the casino banking that produced the financial crisis, with the major rating agencies providing the triple A ratings of the financial crap that were needed to keep the shell game going.

Even as late as early 2008, where were the battalions of investment gurus and talking heads who are still the ubiquitous ornaments of the financial media including the cable news/business outlets? Where were the voices questioning the competence (never mind wisdom) and indeed the understanding of senior financial executives of what they were doing and the financial devices they were using to make their multi-million dollar bonuses while taking American and European financial stability ever closer to the edge of the cliff? The public silence of most experts and insiders  was deafening even after the first European bank  (Germany's IKB) choked on U.S. real estate bubble-generated, securitized, toxic sub-prime mortgages.

All of this is by way of being a prelude to praise of the recent 4 hour investigative report by the American Public Broadcasting System's program Frontline called "Money, Power and Wall Street". It's 4 segments were broadcast in 2 parts of 2 hours each on April 25 and May 1.

The PBS program eclipsed anything yet done on the subject by commercial television in the U.S.  It featured interviews with dozens of the key players and observers in the Wall Street firms, among federal regulators and politicians and the financial media in the US and Europe. It provides a clear and impressive analysis of who did what and who failed to do what they ought to have done. It is absolutely superb and a fine example of how PBS news and public affairs programming regularly outshines its commercial peers.

Such incisive and hard-hitting programming on a nationally and internationally significant subject is rarely to be seen on American commercial television networks apart from an occasional segment on CBS's long running "60 Minutes". The 24 hour cable news networks in the U.S. are not even players in the same game.

This recent PBS program also stands as an excellent example of why the big business cheerleaders as well as the ideological groupies and apologists to be found among Washington Republicans are forever trying to curtail or eliminate the limited funding provided by the federal government to the Corporation for Public Broadcasting.

Frontline's "Money, Power and Wall Street" is just the sort of reality-based education that should be required viewing by, for example, the depressingly numerous Americans who still believe that their President is a Muslim socialist born outside the U.S. However I have to admit that even if such a thing could be mandated it would likely fail to have much beneficial effect on the politically paranoid and the conspiracy-minded who would (and will) dismiss it out of hand.

The PBS program will doubtless be repeated but all four segments can be viewed online at




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Friday, April 13, 2012

(No.194) Reading without disbelief


Alastair Rickard

The fiction genre in which I increasingly find reading enjoyment is the one variously called crime/mystery/police procedural. In this type of novel a key ingredient for me is a believable plot. Too many novels these days in this as well as other genres call for a suspension of disbelief by the reader that requires a crane.

From time to time I write columns for in which I recommend novels I have enjoyed reading but I try not to waste readers' time on novels unworthy of their attention. In the age of 3 minute attention spans plus Twitter and Facebook as substitutes for conversation and reading, I remain among those (like regular readers of RickardsRead) who are happy to spend time on 'long form' reading but not on what may be fashionable but is still rubbish.

What follows in this column are some comments about a few novels I have enjoyed reading and rereading recently. I include no 'spoiler alerts' since I avoid what incenses me elsewhere: reviews that ruin a novel one might enjoy reading by revealing too much of the plot.

I have just reread the first three novels by the Scottish writer Philip Kerr which feature the Berlin policeman and private detective Bernie Gunther: the first two set in the Berlin of the 1930s (March Violets and The Pale Criminal) and the third in post-war Berlin and Vienna (A German Requiem). They were republished in 1993 in one volume as Berlin Noir.

I have reviewed novels by Philip Kerr previously in these columns including the novels featuring Gunther which, after a long interval following the Berlin Noir novels, Kerr resumed writing. They are absolutely superb novels, wonderfully plotted and written. As with the European pre-war novels of American Alan Furst the atmosphere created by the writing and the sense of doom are almost palpable. It will not be the last time I reread these novels. I recommend them without reservation.

Rereading the Berlin Noir trilogy prompted me to think about novels that offer guaranteed pleasure to readers who share my tastes in fiction. There are many novels and authors among which to choose. I place in this category, for example, almost any by Alan Furst set in pre-war Europe and any of the novels by his countryman the superb novelist David Liss. I have praised the writing of both in these columns.

Lawrence Block has been for decades a prolific writer of crime novels set in the U.S. Perhaps his best known series has as its lead character the ex-NYPD detective and alcoholic Matthew Scudder. This character has aged through the course of more than a dozen novels. In his latest novel, A Drop of the Hard Stuff, Scudder reminisces with an old friend about his first year as a member of AA struggling to stay off booze while investigating several Manhattan murders. This story is up to Block's best standard.

I just encountered a police procedural series I quite enjoy. The novels are set in the small fictional English city of Crowby in the Midlands. The novels feature Detective Chief Inspector Frank Jacobson and Detective Sergeant Ian Kerr. Jacobson is an old style copper with little patience for modern police bureaucracy but with a very modern, almost liberal approach to cases and criminals. Kerr is preoccupied with his own extra-marital affairs.

The author is Iain McDowall. His plots are far from run-of-the-mill and his characters come alive. There are a half dozen novels in this series so far. Check out the recent Envy The Dead.

Another English author whose crime novels I have enjoyed recently is I.K. Watson. Some of the novels feature criminals, others have cops as their lead characters. All are dark, gritty and absorbing. In terms of cops as the lead characters, see A Little Bit of Previous; for one of Watson's novels with a criminal family as the focus, read Manor.

Finally I cannot recommend too highly a novel by English novelist and art historian Iain Pears titled Stone's Fall. It is so well written and plotted that it is a sort of literary equivalent to those small Russian 'egg dolls' that fit one inside the other, and then inside another and so on. The novel begins with a funeral in Paris in 1953, then a death in 1909 in London, to Paris in 1890 and to Venice in 1867. The plot is fascinating and the novel a gem.




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Wednesday, April 4, 2012

(No.193) Kurelek, Tissot & Canaletto: something in common


Alastair Rickard

Early in the 1980s Mary McLaughlin, a colleague of mine at the Mutual Life of Canada, persuaded the CEO to have the company sponsor a major exhibition by the Canadian painter William Kurelek. Her success in that effort was far from being a slam dunk.

Thirty years on this sort of sponsorship may not seem unusual with companies like Sun Life of Canada (which two decades later took over Mutual Life) being active corporate sponsors of cultural activity across Canada. Back then however such corporate activity was not so common, especially at Mutual Life and particularly when it involved a painter like Kurelek whose paintings' style and content were a long way from traditional in this country.

Mary, a former press secretary to federal Liberal cabinet minister Marc Lalonde, was an able political player in the corporate context although I recall some executive grumbling sotto voce about the Kurelek sponsorship. The national tour of the Kurelek exhibition had more than a dozen stops and made a significant contribution to raising Kurelek's artistic profile. Although a prolific painter he had died at age 50 in 1977.

Three Canadian galleries have worked together to organize and mount the first major Kurelek special exhibition since then. It is called "William Kurelek: The Messenger".

The three co-curators have done an impressive job in selecting and then gathering the more than 80 paintings in this exhibition: Andrew Kear of the Winnipeg Art Gallery, Tobi Bruce of the Art Gallery of Hamilton and Mary Jo Hughes of the Art Gallery of Greater Victoria. They have worked for several years preparing a fascinating representation of Kurelek's work.

This was no easy task given the various periods and themes of his life, from his prairie boyhood in Manitoba to his time in England during the 1950s during which he received psychiatric treatment and became an expert picture frame maker (he made frames for many of his own paintings, in some cases extending his art onto the frame itself). His 1957 conversion from atheism to an obsessive Roman Catholicism married to an apocalyptic vision of the Cold War was another major influence as was his focus on his Ukrainian family heritage.

Kurelek's paintings included but were by no means limited to explicitly religious works like the 160 panels of "The Passion of Christ". But religious references were often included in seemingly non-religious paintings like the Virgin Mary at the base of a huge snow-covered prairie haystack on which children play.

Or a 1963 painting he entitled "Dinnertime on the prairies": empty of people, fence posts lying along the edge of a ploughed field, part way along is Jesus Christ on a cross. What was Kurelek's explanation of this painting? On the label for the back of the painting he wrote that "this is an intuitive painting. I was wondering how to paint a Western religious painting and suddenly this idea came to me so it is open to interpretation. The meaning I put on it is that sin, which crucifies Christ over and over, can just as easily happen on a summer day on a Manitoba farm as anywhere else. The farmer and his sons doing the fencing may have had an argument just before dinner or one of them enjoyed a lustful thought. Or got an idea how to revenge himself on neighbours, etc."

The Globe and Mail critic, in his review of this exhibition , called Kurelek "among the most bizarre painters this country has produced". The Winnipeg Free Press reviewer of the exhibition's opening referred to Kurelek having been called "Canada's Norman Rockwell" and "Canada's Cornelius Krieghoff".

Such labels are attractive shorthand to use in referring to a painter who indeed was a very different sort of painter and did not fit into prevailing Canadian fashions in art. However the exhibition's co-curators are right when they characterize such labels and comparisons as being too narrow for Kurelek's diverse body of work, comprised as it is of more than 3,000 paintings and drawings as well as several books.

William Kurelek has long been one of my favourite painters, a smallish group which also includes inter alia the Frenchman James Jacques Joseph Tissot (1836-1902) and the Venetian Giovanni Antonio Canal, known as Canaletto (1697 - 1768). Aside from their being painters all three have something else in common: a period of artistic creativity spent away from their respective homelands in England. Kurelek's painting, like Tissot's (but in Tissot's case it happened after the death of his English mistress) came to place a heavy emphasis on religious themes.

Critical references to Kurelek as a 'prairie Hieronymous Bosch' or a 'flatland Pieter Brueghel' are facile but not really apt. His art reflects the peculiar troubles, contradictions and obsessions of a life spent mainly in Canada, especially on the prairies, and made real through his brilliant and unusual artistry.

A visit to this special exhibition of Kurelek's work is a truly rewarding experience. The exhibition's time in Winnipeg is past but it is currently at the Art Gallery of Hamilton through April 28, 2012 and then completes its three city schedule at the Art Gallery of Greater Victoria from May 25 to Sept. 3, 2012.

Sources and references:

1. The Kurelek special exhibiton, "The Messenger" has its own website:

2. Art Gallery of Hamilton --

3. Art gallery of Greater Victoria --

4. The Niagara Falls Art Gallery [Ontario] houses a William Kurelek art collection and the artist's personal papers and library --

5. The expanded Art Gallery of Ontario [Toronto] houses extensive collections of art donated by the late Ken Thompson. These include, for example, not only the world's largest collection of Cornelius Krieghoff paintings but enough works by William Kurelek to fill one of the new permanent galleries --

6. A ten minute film about Kurelek made in 1967 by the National Film Board of Canada can be viewed by going to the NFB's website --

7. There are several books about Kurelek. These include 1999's Kurelek Country: The Art of William Kurelek by Ramsay Cook and Avrom Issacs (Key Porter Books). Kurelek's autobiography Someone With Me was published in 1973, then republished in a revised condensed version in 1980.




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