Life Insurance Capital Standardized Approach–Quantitative Impact Study No. 5

Document Properties

  • Type of Publication: Letter
  • Date: November 1, 2013
  • To: Federally Regulated Life Insurance Companies & Fraternal Benefit Societies

OSFI and its Standard Approach Advisory Committee (SAAG) partners would like to thank all insurance entities who participated in QIS#4 and all other stakeholders, including the Canadian Institute of Actuaries (CIA) and the Canadian Life and Health Insurance Association (CLHIA), who provided comments in preparation for this updated study.

At this time, we are requesting that insurance entities participate in a fifth quantitative impact study (QIS#5) to gather information related to all potential methods developed to date for determining capital requirements. QIS#5 includes changes to credit, market, insurance and operational risk calculations based on feedback received on QIS#4, additional analysis and more specific data. The details on these risks are explained in the relevant QIS instructions, along with a summary of changes from QIS#4 to QIS#5. QIS#5 also includes certain additional tests on alternative approaches, for example the solvency buffer cash flow test, requested on a voluntary basis. Along with the completion of the numerical worksheets, your feedback on the potential methods included in QIS#5 is requested.

A Questions & Answers (Q&A) document may be posted on OSFI's website, when necessary, to address questions and issues that arise in the preparation of insurers' response to QIS#5.

The QIS is not intended to be a statement of OSFI’s positions. The methods and scenarios included represent “work in progress” and will be reconsidered in light of additional information, including the results of this and other studies and developments. Therefore, the results of QIS#5 should not be interpreted as OSFI’s final views on the potential total capital requirements for life insurers.

Please complete the attached worksheets and return them to:

OSFI Capital Division
15th floor
255 Albert Street
Ottawa, Ontario K1A 0H2

Attention: Mr. Jean-Guy Lapointe, Capital Division

Questions concerning the completion of the QIS should also be addressed to Mr. Jean-Guy Lapointe.

The QIS#5 worksheets should be completed and returned by January 31st, 2014. The results of the discount rate test and solvency buffer cash flows test in the general instructions and worst scenario dividend test in the market risk instructions may be submitted separately from the results of QIS#5 on or before February 14, 2014. Note that all submissions received will be shared with Assuris and AMF on a confidential basis.

OSFI remains committed to developing appropriate risk-based capital requirements and we appreciate the collaboration, time and support of the industry. Should you have any questions related to the future direction of our capital rules, please contact me at or by telephone at (613) 990-7797.

Yours truly,

Bernard Dupont
Managing Director,
Capital Division