AMF published guideline on capital adequacy requirements for self-regulatory organizations and reciprocal unions in Quebec. The guidelines become effective as of June 13, 2019. The guidelines aim to increase the transparency and predictability of criteria used by AMF to assess the quality and prudence of management practices of insurers for which these criteria are intended.
The risk-based capital adequacy framework is based on an assessment of insurance, market, credit, and operational risks, through the application of various risk factors and margins. The guideline on capital adequacy requirements outlines the capital framework, using a risk-based formula for target capital requirements and minimum capital requirements, in addition to defining the capital that is available to meet the minimum standard. The Minimum Capital Test, or MCT, determines the minimum capital required and not the optimum capital required at which a self-regulatory organization or reciprocal union must operate.
Effective Date: June 13, 2019
Keywords: Americas, Canada, Quebec, Insurance, CAR, Self-Regulatory Organizations, Reciprocal Unions, MCT, Minimum Capital Requirements, Capital Adequacy, AMF
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