BUSINESS

RBC to take $118-million hit from change in federal taxes on life insurance

11/14/2013 10:13 EST | Updated 01/23/2014 06:58 EST
TORONTO - Royal Bank of Canada (TSX:RY) says it's grappling with changes to how Ottawa taxes individual life insurance policies.

The bank will record an unusual negative item in the fourth quarter, about $118 million after taxes, to reflect the reduced long-term profit that it expects from policies issued by its insurance unit.

The policies were sold mostly through insurance brokers and RBC says it will work with them to ensure clients understand the impact of the new rules.

The new tax policy was introduced in the House of Commons for first reading on Oct. 22, shortly before the bank's fourth quarter ended.