Office of the Superintendent of Financial Institutions
The applicant is generally expected to provide:
The applicant is generally expected to provide a minimum three-year business plan for the proposed Branch, including:
The applicant is expected to provide:
The information requirements and administrative guidance are intended to satisfy typical applications. They have been derived from OSFI’s experience in assessing applications. Applicants who provide all information and material requested can generally expect a more timely assessment of their applications. As appropriate to the circumstances, OSFI may request additional information, take into account other matters, impose terms and conditions, or require undertakings.
In this Transaction Instruction, the term “control” includes both de jure and de facto control as set out in section 3 of the ICA.
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Please see paragraph 19 of Administrative Guidance below.
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Please see section 571 of the ICA for the definition of “foreign entity”.
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Please see subsection 2(1) of the ICA for the definition of “WTO Member resident”.
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Please see subsection 574(2) of the ICA.
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Please note that, in certain circumstances, OSFI may request that the applicant provide information that demonstrates that the applicant meets the minimum capital requirements in both its home jurisdiction and in Canada.
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In this regard, the applicant is expected to provide a comparison between the accounting standards used to complete its financial statements and Canadian generally accepted accounting principles, where applicable.
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Please see paragraph 5 in Administrative Guidance below for additional information.
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This should include a description of the applicant’s experience and expertise in the underwriting, offering and servicing of insurance relative to risks that the proposed Branch will insure in Canada.
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Premium volumes and sales targets should be supported by market studies in Canada and projected results should be compared to the peer group or industry as a whole. Major asset, liability, income and expense categories should also be identified, including start-up costs and any amount and description of off-balance sheet activities.
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Please see OSFI Guideline – Minimum Capital Test and Guideline A-4: Internal Target Capital Ratio for Insurance Companies.
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Please see OSFI Guideline - Life Insurance Capital Adequacy Test and Guideline A-4: Internal Target Capital Ratio for Insurance Companies.
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Please see OSFI Guideline E-18 - Stress Testing. Applicants are strongly encouraged to contact OSFI to ensure scenarios correctly stress the Branch’s proposed businesses. Please note that the maximum single loss scenario should be calculated without regard to the the probability of the event occurring leading to that loss. In addition, the maximum single loss scenario should explicitly set out the considerations of the relationship between: (a) the maximum policy limits offered by the Branch; (b) the Branch’s reinsurance arrangements; and (c) the Branch’s vested asset levels and BAAT/LIMAT calculations.
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Please see paragraphs 6 and 7 of Administrative Guidance below for additional information.
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Please see OSFI Guideline B-3 - Sound Reinsurance Practices and Procedures and paragraph 20 of Administrative Guidance below.
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Please see OSFI Guideline B-10 – Outsourcing of Business Activities, Functions and Processes.
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Please see OSFI Guideline E-15 - Appointed Actuary: Legal Requirements, Qualifications and External Review, and sections 623 through 632 of the ICA.
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Please see sections 632.1 through 646 of the ICA.
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Developed in accordance with OSFI Guideline E-18 - Stress Testing.
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Developed in accordance with OSFI Guideline B-3 - Sound Reinsurance Practices and Procedures.
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OSFI generally expects the Branch’s operational risk management policies to include policies related to the following: outsourcing risk, business continuity and disaster recovery, privacy risk, information technology, information management and security, physical security, fraud risk, and records retention. Please also see OSFI’s Supervisory Framework.
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In particular, the Branch’s business continuity plan should ensure that the proposed Branch has in its possession or can readily access all records necessary to allow it to sustain business operations, meet its regulatory obligations, and provide all information as may be required by OSFI to meet its legislated mandate.
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Developed in accordance with OSFI Guideline B-1 - Prudent Person Approach, and, where applicable, OSFI Guideline B-2 - Large Exposure Limits (life) or Guideline B-2 - Investment Concentration Limit for Property and Casualty Insurance Companies. Please see sections 616 and 617 of the ICA regarding the lending limits imposed on foreign insurers.
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The vested asset management policy should detail the internal targeted levels of vested assets and describe ongoing monitoring procedures to ensure that the proposed Branch will meet OSFI’s minimum capital requirements. Please see OSFI Guideline A-4: Internal Target Capital Ratio for Insurance Companies.
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Please see OSFI Guideline E-13 - Legislative Compliance Management System.
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OSFI will accept a Newly Upgraded Automated Name Search (NUANS) report, which includes a list of business names and trademarks that sound similar to the name being proposed. If the applicant intends to conduct business in the province of Québec, a search of the Québec Corporations Database at “Registraire des entreprises” is also required.
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If the proposed Branch will use both an English and French form of the proposed name, a name search report and corresponding analysis must be provided in respect of both forms of that name. Reference should also be made to OSFI Advisory 2002-01-R1 - Corporate Names, Registered Names and Trade Names.
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Please see section 580 of the ICA and paragraph 3 of Administrative Guidance below.
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The letter of commitment that the applicant is expected to sign will be provided by OSFI.
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Material changes to the business plan may include new product offerings, changes in key management personnel or growth of the business beyond what was contemplated in the initial business plan submitted in support of the application for for an Order.
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Paragraph 581(1)(a) of the ICA provides that the initial amount of assets vested in trust in Canada must be $5 million (CAD) or any greater amount specified by the Superintendent. Please see paragraphs 6 and 7 of Administrative Guidance below for additional information.
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Please note that section 591 of the ICA generally requires foreign life insurers with a Branch to become members of Assuris.
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Review by OSFI of the draft Notice will ensure that the applicant has performed the requisite name use analysis, and that the form and information contained in the Notice provides the necessary information to the public. Please see items 49 and 50 of the Information Requirements.
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This does not include the requirement set out in item 54(b), Text for screen readers: 54(b) = (54)(2), of the Information Requirements above, which need only be provided just prior to the making of the Order.
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Please see paragraph 21 below.
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Please see section 589 of the ICA.
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Please see paragraphs 507(15)(d) and 507(16)(d) of the BA
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Please see section 597 of the ICA.
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Please see section 1016.1 of the ICA.
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Please see section 586 of the ICA.
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Please see section 584 ICA.
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Please see Charges for Services Provided by the Office of the Superintendent of Financial Institutions Regulations 2002.
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