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At issue in the court case is whether a group of investors has the right to put unlimited money into a set of universal life insurance policies, some of which were purchased in Saskatchewan, and collect a guaranteed minimum interest rate.

The investors argue that the terms of their contracts allow them to do that, while the three insurance companies involved, in general, maintain that the policies were never intended to be used that way and could bankrupt them.

The three-day hearing, which will determine whether the new regulations can be applied retroactively and therefore apply to the disputed policies, concluded on Feb. 14. Justice Brian Scherman reserved judgment, but gave no date for his decision.

In an emailed statement, Financial and Consumer Affairs Authority spokeswoman Shannon McMillan said the government could not comment on questions regarding the ongoing litigation.

However, speaking generally, the possible “misuse” of policies by investors looking to treat them as bank accounts came to the government’s attention in the fall of 2018 “from a number of sources,” McMillan wrote.

“For the safety of policy holders, we amended the (regulations) to clarify the conditions under which an insurer may accept funds … in relation to certain life insurance polices by setting a cap on the amount of money an insurer may accept for payment of a life insurance policy and its associated side account.”

Judgment in the original case was reserved following a three-week civil trial in Saskatoon Court of Queen’s Bench last September. The new insurance regulations were brought in about a month later, on Oct. 25, according to government records.