When asked to comment on whether grandfathered status for an LIA would be lost for various types of post-March 20, 2013 transactions, CRA stated:
When the terms of a loan agreement are changed after March 20, 2013 without increasing the amount of borrowings as of March 20, 2013… [and w]hen the changes do not create a new loan agreement… the person or the partnership has not become obligated after that date to repay an amount. A change in the interest rate, an extension of the duration of loan or a change to the terms of repayment may not, in and of itself, result in a new loan. Such a determination can only be made after a review of the terms of the particular loan agreement.
Also… the borrowing of an additional amount from the current lender would cause a person or a partnership to be obligated, after March 20, 2013, to repay an amount… even if the combination of borrowings does not exceed the amount of the borrowings outstanding as of March 20, 2013.
Finally, where a life insurance policy was assigned as security to the lender prior to March 21, 2013 and it is then replaced with a new life insurance policy after that date … this fact, in itself, will not jeopardize the grandfathered status… .