A New Chapter in Life Insurance Capital Requirements - Remarks by Deputy Superintendent Mark Zelmer to the CFA Society Toronto, Toronto, Ontario, April 21, 2016.
In his remarks, Deputy Superintendent Mark Zelmer will discuss the draft Life Insurance Capital Adequacy Test (LICAT) guideline which will replace the current life insurance capital test, the Minimum Continuing Capital and Surplus Requirements (MCCSR) guideline, in place since 1992. The draft LICAT guideline takes into account lessons learned from the financial crisis, recent developments in financial reporting standards, actuarial standards, economic and financial practice, and international trends in solvency frameworks.
"Not only does capital protect existing policyholders and creditors, it also serves as an important signal of a life insurer's financial condition to prospective policyholders and other stakeholders. It gives comfort to prospective policyholders, creditors, sales distribution networks, and regulators that a life insurer is sound, enabling it to attract new business, and continue to grow."