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(July 12, 2007) Economic growth and inflation for the first half of 2007 has been stronger than was expected, the Bank of Canada said in its June Monetary Policy Report, and growth won’t be subsiding anytime soon.

Much of this growth has been fuelled by domestic demand bolstered by firm commodity prices. Both total CPI and core inflation have been higher than projected in April and are above the BoC’s 2% inflation target. Longer-term interest rates have increased, and the Canadian dollar has risen sharply, moving well above the trading range assumed in the last report.

The BoC now expects that the economy will grow by 2.5% in 2007 but that in 2008 and 2009 it will grow somewhat more slowly than previously projected. The Bank also predicts inflation to remain slightly higher and be more persistent than had been expected. Total inflation is projected to peak at about 3% in the fourth quarter of this year, as the effects of the GST cut fade.

On Tuesday, the Bank raised its key policy interest rate by one-quarter of one percentage point to 4.5%. The Bank also noted that some modest further increases in the overnight rate may be required to bring inflation back on target over the medium term.

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New data feed tracks underwriting process

(July 12, 2007) Manulife Financial says it’s launching the Canadian insurance industry’s first new business notification feed that allows agencies and their advisors to view the underwriting status of policies on a daily basis.

The new feed is intended to greatly reduce time spent on inquiries and follow-up calls about clients’ applications, Manulife says. It’s also the first process of its kind to meet new guidelines outlined by the Canadian Life Insurance Electronic Data Interchange Standards (CLIEDIS).

“This is a significant advance in service to our managing general agencies and national accounts. These organizations are focusing on improved technologies to increase their office and business efficiency so they can spend more time working with clients,” says Andy White, assistant vice-president of Manulife’s distribution systems.

Manulife says a distributor’s feed will be available for download to its back office system through a phased launch on Manulife’s advisor website.

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IDA fines Quebec advisor $150,000

(July 12, 2007) An Investment Dealers Association hearing panel has shown little sympathy to a Quebec-based advisor, issuing a $150,000 fine and a lifetime ban for his misappropriation of more than $100,000 from an elderly client in poor health.

During a disciplinary hearing held on March 29, 2007, the IDA found Orazio Petriello, a former advisor with Dundee Securities in Pointe Claire, Que., guilty of bilking an 80-year-old woman of $124,000.

Between October 2000 and August 2002, Petriello dispersed his client’s money into the accounts of his father and spouse. To add insult to injury, Petriello continued to collect commissions in the ordinary course of business on the amounts he was siphoning. He thus made total commission revenue of approximately $12,500 Canadian and $4,400 U.S. during the two-year period.

In addition to the fine and lifetime ban, Petriello is required to pay $29,135.18 in costs.

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(07/12/07)