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July 14, 2017

OSFI published draft “Guideline E-19: Own Risk and Solvency Assessment (ORSA),” “Guideline A-4: Regulatory Capital and Internal Capital Targets,” and forms for ORSA Key Metrics Report (KMR). The consultation on these documents closes on August 18, 2017 and the guidelines become effective on January 01, 2018.

The Guideline E-19 sets out OSFI’s expectations about the ORSA of federally regulated insurers. The Guideline A-4 sets out OSFI’s expectations on the capital and solvency assessment of federally regulated insurers within the context of its supervisory framework. The ORSA KMR form provides a summary of the results of the insurer's ORSA process for determining own capital needs and internal targets, as per OSFI's expectations (outlined in Guidelines A-4 and E-19). OSFI released a public consultation for the revised versions of the mentioned documents. The updates are largely a result of the upcoming introduction of Life Insurance Capital Adequacy Test (LICAT) in 2018 for life insurers. The LICAT will result in a number of changes to the current life insurance capital framework, which must be reflected in all relevant OSFI guidance. OSFI also published ORSA KMR and accompanying instructions. All federally regulated insurance companies are required to complete a KMR. The KMR is to be submitted to OSFI at least annually and within thirty days of the ORSA report being reviewed by the federally regulated insurance companies’ Board of Directors or signed off by the Chief Agent. To help complete the KMR, OSFI has provided separate KMR instructions for life insurers and property and casualty insurers.

 

Related Links

Guideline E-19 (PDF)

Guideline A-4 (PDF)

KMR (XLSX)

KMR Instructions for P&C Insurers (PDF)

KMR Instructions for Life Insurers (PDF)

LICAT

Comment Due Date: August 18, 2017

Effective Date: January 01, 2018

Keywords: Americas, Canada, Insurance, LICAT, Guideline, Regulatory Capital, ORSA, OSFI

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