Draft MCT 2023 Public Consultation

Document Properties

  • Type of Publication: Letter
  • Date: June 21, 2021
  • To: Federally Regulated Property and Casualty Insurers and Industry Stakeholders

OSFI is issuing a revised draft Minimum Capital Test (MCT) 2023 guideline, reporting forms, and instructions for consultation. This consultation marks a key milestone announced in the September 30, 2020 Letter to Federally Regulated Insurers.

Key revisions to the MCT 2023 guideline aim to:

  • Adapt the MCT for IFRS 17 Insurance Contracts, including the use of concepts and measurements of insurance liabilities, e.g., the new guideline uses "liabilities for incurred claims" and "liabilities for remaining coverage" instead of "unpaid claims" and "premium liabilities", respectively;
  • Establish principles for allocation methods used for capital purposes; and,
  • Specify credit risk requirements in a manner consistent with IFRS 9 Financial Instruments terminology.

Reporting forms for the MCT calculation under IFRS 17 will be in a new stand-alone return, named the PC4. The new forms and instructions reflect the proposed draft revisions to the MCT guideline.

OSFI is also conducting a quantitative impact study with property and casualty insurers in parallel with this public consultation.

Interested parties are invited to provide comments by September 30, 2021. Please direct your questions or comments to the following mailbox at QISMCT@osfi-bsif.gc.ca


Ben Gully
Assistant Superintendent, Regulation