May 9, 1989
HEAD OFFICE Financial Industries Division A.B. Adler (613)957-8962
SUBJECT: Group Sickness and Accident Insurance Plans
Enclosed are copies of two letters from the Vancouver office of XXXX which were, it seems, inadvertently addressed to the Surrey,B.C. Centre rather than to your office.
The issue is whether the XXXX and the XXXX could qualify as group sickness or accident insurance plans, and would therefore fall under the exception in paragraph (g) of the definition of "Retirement compensation arrangement" in subsection 248(1) of the Income Tax Act.
Since the above-mentioned plans are already in existence we asked the taxpayers' representative to write to the relevant district taxation office to ascertain their tax status. Note that both of these plans have apparently previously been classified as health & welfare trusts and have been taxed accordingly. Further, note that it is our general position that contributions to a plan that qualifies for treatment as a health and welfare trust would be considered to be contributions to a group sickness or accident insurance plan.
Thank you for your co-operation concerning this matter.
for Director Financial Industries Division Rulings Directorate