OSFI Updates Guideline on Asset Securitization for Insurers

The guideline supplements the Life Insurance Capital Adequacy Test (LICAT), the Minimum Capital Test (MCT), and the Mortgage Insurer Capital Adequacy Test (MICAT). It specifies the capital treatment for securitization exposures, in addition to those arising from investing in securitizations as a third party. The guideline applies to all insurers on an enterprise-wide basis. Insurers should apply the capital treatment in this guideline to traditional securitizations, synthetic securitizations, and other securitization structures that contain features common to both.

The amendments reflect events that have affected securitizations since the guideline was first published in November 2004, including the financial crisis and changes to the Basel framework. The guideline also incorporates relevant content from the Advisory on expected practices in securitization. OSFI plans to repeal the Advisory once the guideline becomes effective on January 01, 2019.

Related Links

• OSFI Letter
• Guideline B-5: Asset Securitization
• Guideline Impact Analysis Statement

Effective Date: January 01, 2019

Keywords: Americas, Canada, Insurance, Securities, Securitization, Guideline B-5, OSFI