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against Priorities

OSFI identified five priorities for 2014-2015 through which to achieve its mandate. This section reports key accomplishments under each of those priorities. OSFI achieved its goals for the reporting year and continues to work on these multi-year priorities. More details are available in subsequent chapters of this report.

Priority A – Anticipating and Responding to Risks Emanating from the Economy and Financial System

Steps Taken

  • Issued the final version of the Residential Mortgage Insurance Underwriting Practices and Procedures guideline
  • Continued development of a new capital framework for mortgage insurers
  • Conducted stress tests for the largest banks and life insurers that included the impact of high consumer debt and other adverse shocks
  • Conducted supervisory reviews focused on cyber security self-assessments and outsourcing
  • Responded to recommendations from the International Monetary Fund (IMF) Financial Sector Assessment Program (FSAP) update for Canada

Priority B – Enhancing Supervisory Processes

Steps Taken

  • Embarked on a multi-year project to improve OSFI supervisory tools and technology, with Phase 1 completed and Phase 2 launched
  • Conducted a pilot assessment of risk culture at a federally regulated financial institution (FRFI), with plans to develop and roll out an OSFI approach over time at large complex institutions
  • Completed reviews of the internal audit function of a number of FRFIs (banks and insurance companies) in the context of their risk management practices

Priority C – Anticipating and Responding to Risks Emanating from Regulatory Reform

Steps Taken

  • Issued new/revised guidelines, advisories or letters, including
    • Liquidity Adequacy Requirements guideline
    • Leverage Requirements guideline
    • Minimum Continuing Capital and Surplus Requirements (MCCSR) guideline
    • Minimum Capital Test (MCT) guideline
    • Derivatives Sound Practices guideline
    • Changes to the Membership of the Board or Senior Management advisory
    • Early Adoption of IFRS 9 Financial Instruments for Domestic Systemically Important Banks advisory
  • Issued a policy paper for the Life Insurance Capital Framework Standard Approach, as well as Quantitative Impact Study No. 6 on various aspects of the framework
  • Participated actively on various international committees that develop regulatory frameworks for banks and insurers, including
    • Financial Stability Board (FSB)
    • Basel Committee on Banking Supervision (BCBS)
    • International Association of Insurance Supervisors (IAIS)

Priority D – A High-Performing and Effective Workforce

Steps Taken

  • Initiated the development of a multi-year Supervision training program to support the needs of Supervision Sector employees
  • Ensured change management work streams were built into all IM/IT projects
  • Continued enhancements to the corporate planning processes to further integrate Human Resources planning and Enterprise Risk Management processes
  • Implemented targeted action plans where necessary to address areas identified for improvement in the 2013-1014 employee survey

Priority E – An Enhanced Corporate Infrastructure

Steps Taken

  • Completed the five-year Information Technology Renewal program, including implementation of
    • an integrated Enterprise and Resource Planning module for Finance-related processes (SAP)
    • a Correspondence and Enquiry Management system for external inquiries
    • a Regulatory Returns System (jointly with the Bank of Canada and Canada Deposit Insurance Corporation) for validation and processing of all regulatory return data
    • an upgraded Business Intelligence solution to provide robust insurance industry data for analysis
  • Continued to apply the Regulatory Data Governance Framework to approve and prioritize OSFI regulatory data requests

The above five priorities will also guide the achievement of strategic outcomes for 2015-2016. Details can be found on OSFI’s website.