OSFI released updates to the Minimum Capital Test (MCT) Guideline, which sets out capital requirements for federally regulated property and casualty (P&C) insurance companies. The revised guideline is effective from January 01, 2018.
The revisions follow an annual review, including a public consultation that closed on August 04, 2017. This year’s amendments to the guideline are not substantive. They remove transition requirements that are no longer applicable and provide clarifications to a number of provisions where OSFI has received multiple industry inquiries over the past year.
A draft MCT Guideline reflecting the amendments was published for consultation on June 15, 2017. After reviewing the limited number of comments received from stakeholders, OSFI determined that no further substantive changes to the guideline were required. The guideline provides the framework within which the Superintendent assesses whether a P&C company maintains adequate capital and whether a company operating in Canada on a branch basis maintains an adequate margin. The guideline describes the capital required, using measures based on risks, and defines the capital that is available to meet the minimum standard.
Effective Date: January 01, 2018
Keywords: Americas, Canada, Insurance, Property and Casualty Insurance, MCT Guideline, Capital Requirements, OSFI
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