Featured Product

    OSFI Issues Advisory on MICAT Total Requirements for FTHBI Mortgages

    September 03, 2019

    OSFI issued an advisory, along with an impact analysis statement for mortgage insurers, defining the capital requirements for insured mortgages under the new First-Time Home Buyer Incentive insured (FTHBI) program. The advisory, in conjunction with the Mortgage Insurer Capital Adequacy Test (MICAT) guideline, sets out the regulatory framework within which OSFI assesses whether a mortgage insurance company maintains adequate capital for FTHBI insured mortgages. The advisory will become effective from November 01, 2019. OSFI also published a guideline impact statement. OSFI will monitor the effectiveness of the new advisory and make any necessary modifications.

    At present, the MICAT is not designed to capture the mortgage insurance risk associated with FTHBI mortgages compared to non-FTHBI mortgages with the same risk drivers such as loan-to-value and outstanding balance. OSFI took the following steps to develop an approach to capture the risks associated with FTHBI mortgages and calculate their total requirements in the MICAT:

    • Identified the risks associated with FTHBI mortgages
    • Measured the risks using the methodology that is used to determine the total requirement formulas in the MICAT
    • Designed an approach to calculate total requirements for FTHBI mortgages that uses the existing total requirement formulae
    • Determined a suitable calibration for recommended approach consistent with measurement of the risk

     

    Related Links

    Effective Date: November 01, 2019

    Keywords: Americas, Canada, Insurance, FTHBI Mortgages, Capital Adequacy, Mortgage Insurers, First Time Home Buyers, Credit Risk, OSFI

    Related Articles
    News

    EBA Updates List of Validation Rules for Reporting by Banks

    EBA issued a revised list of validation rules with respect to the implementing technical standards on supervisory reporting.

    September 10, 2020 WebPage Regulatory News
    News

    EBA Responds to EC Call for Advice to Strengthen AML/CFT Framework

    EBA published its response to the call for advice of EC on ways to strengthen the EU legal framework on anti-money laundering and countering the financing of terrorism (AML/CFT).

    September 10, 2020 WebPage Regulatory News
    News

    NGFS Advocates Environmental Risk Analysis for Financial Sector

    NGFS published a paper on the overview of environmental risk analysis by financial institutions and an occasional paper on the case studies on environmental risk analysis methodologies.

    September 10, 2020 WebPage Regulatory News
    News

    MAS Issues Guidelines to Promote Senior Management Accountability

    MAS published the guidelines on individual accountability and conduct at financial institutions.

    September 10, 2020 WebPage Regulatory News
    News

    APRA Formalizes Capital Treatment and Reporting of COVID-19 Loans

    APRA published final versions of the prudential standard APS 220 on credit quality and the reporting standard ARS 923.2 on repayment deferrals.

    September 09, 2020 WebPage Regulatory News
    News

    SRB Chair Discusses Path to Harmonized Liquidation Regime for Banks

    SRB published two articles, with one article discussing the framework in place to safeguard financial stability amid crisis and the other article outlining the path to a harmonized and predictable liquidation regime.

    September 09, 2020 WebPage Regulatory News
    News

    FSB Workshop Discusses Preliminary Findings of Too-Big-To-Fail Reforms

    FSB hosted a virtual workshop as part of the consultation process for its evaluation of the too-big-to-fail reforms.

    September 09, 2020 WebPage Regulatory News
    News

    ECB Updates List of Supervised Entities in EU in September 2020

    ECB updated the list of supervised entities in EU, with the number of significant supervised entities being 115.

    September 08, 2020 WebPage Regulatory News
    News

    OSFI Identifies Focus Areas to Strengthen Third-Party Risk Management

    OSFI published the key findings of a study on third-party risk management.

    September 08, 2020 WebPage Regulatory News
    News

    FSB Extends Implementation Timeline for Framework on SFTs

    FSB is extending the implementation timeline, by one year, for the minimum haircut standards for non-centrally cleared securities financing transactions or SFTs.

    September 07, 2020 WebPage Regulatory News
    RESULTS 1 - 10 OF 5796