Office of the Superintendent of Financial Institutions
Reinsurance Risk Management Policy (RRMP)
The applicant is generally expected to provide:
details regarding the level of internal review and approval of the applicant’s RRMP (e.g., board of directors, board committee, senior management), based on the applicant's policies, as well as evidence that the RRMP was approved at the appropriate level (e.g., relevant excerpts from the minutes of the meeting at which the RRMP was approved); and
details regarding the due diligence carried out by the applicant in respect of the related party with which the applicant proposes to cause itself to be reinsuredFootnote 1 (Reinsurer), including a confirmation that the due diligence performed complies with Guideline B-3, and where applicable, the applicant’s RRMP.
Proposed Reinsurance Arrangement
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.
Please see paragraph 6 of Administrative Guidance below regarding OSFI’s views as to when a cedant causes itself to be reinsured for the purposes of sections 523 and 597 of the ICA.
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All references in this Transaction Instruction to the term “related party” means a related party as defined by section 518 and subsection 597(2) of the ICA.
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The information provided in respect of item 5 must, at a minimum, address prudential supervision and regulation.
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In this regard, the applicant is expected to provide a comparison between the accounting standards used to complete the Reinsurer’s financial statements and Canadian generally accepted accounting principles, where applicable.
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Please see principle 4 of Guideline B-3 for further details of OSFI’s expectations in this regard.
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In this Transaction Instruction, a “senior officer” means the chief executive officer or a person that reports to the chief executive officer or the Board.
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In this regard, please see OSFI’s Advisory 2007-01-R1 (Insurance in Canada of Risks).
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As this approval is only required in relation to reinsurance with a related party that is not also a federally regulated insurer, the approval and its conditions will no longer be in effect if the Reinsurer ceases to be a related party of the applicant.
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Please see the Guideline Administration section of Guideline B-3 for further details regarding the annual reinsurance declaration.
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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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