Draft MICAT 2023 Public Consultation

Document Properties

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

OSFI is issuing a revised draft Mortgage Insurer Capital Adequacy Test (MICAT) 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 MICAT 2023 guideline aim to:

  • Adapt the MICAT 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.
  • Introduce a capital requirement on the loss components of liabilities for remaining coverage so that the MICAT ratios better reflect the changes in the level of insurance risk during periods when mortgage insurers are under stress.
  • Specify credit risk requirements in a manner consistent with IFRS 9 Financial Instruments terminology.

The MICAT 2023 guideline also directly incorporates the calculations for First-Time Homebuyer Incentive mortgages (FTHBI) specified in the advisory MICAT Total Requirements for FTHBI Mortgages. MICAT reporting forms and instructions have been updated to reflect changes to the MICAT guideline.

OSFI is also conducting a quantitative impact study with mortgage 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 Tara-Lea Herkert, Director, Capital Division at Tara-lea.Herkert@osfi-bsif.gc.ca or at (613) 618-9468.


Ben Gully
Assistant Superintendent, Regulation