For Immediate Release
OTTAWA ─ December 15, 2016 ─ Office of the Superintendent of Financial Institutions
Today the Office of the Superintendent of Financial Institutions Canada (OSFI) released the final version of its advisory, Capital Requirements for Federally Regulated Mortgage Insurers, following a public consultation process. Effective January 1, 2017, this Advisory will replace the Advisory: Interim Capital Requirements for Mortgage Insurance Companies.
The Advisory defines a new approach for the regulatory capital requirements for mortgage insurance risk that is more risk sensitive and incorporates key characteristics such as borrower creditworthiness, outstanding loan balance, loan-to-value ratio, and remaining amortization. It also ensures a level of conservatism in the protection provided to policyholders and other creditors of the mortgage insurers, and is adaptable to future changes.
The final version of the advisory incorporates revisions resulting from the public consultation process. OSFI always appreciates the collaboration, time and support of the industry in helping to refine the regulatory capital framework.
“The market has evolved considerably since the capital framework for mortgage insurers was last updated. The new framework places us at the vanguard of understanding and quantifying the risks in mortgage insurance”, noted Superintendent Jeremy Rudin.
The Office of the Superintendent of Financial Institutions (OSFI) is an independent agency of the Government of Canada, established in 1987, to protect depositors, policyholders, financial institution creditors and pension plan members, while allowing financial institutions to compete and take reasonable risks.
OSFI – Public Affairs