OSFI issues guideline supporting sound residential mortgage insurance underwriting

November 6, 2014 ─ Ottawa, Ontario ─ Office of the Superintendent of Financial Institutions

The Office of the Superintendent of Financial Institutions (OSFI) today released Guideline B-21 Residential Mortgage Insurance Underwriting Practices and Procedures following public consultation. The guideline outlines principles to support sound mortgage insurance underwriting and guide interactions between mortgage insurers and mortgage lenders.


“Guideline B-21 reinforces sound mortgage underwriting by introducing expectations for mortgage insurers that complement those applicable to mortgage lenders, and by requiring mortgage insurers to conduct adequate due diligence on the lenders with which they do business. Implementing these principles, along with OSFI’s on-going supervisory work in this area, will contribute to the continued stability of the Canadian financial system,” said Superintendent Jeremy Rudin.  

Quick Facts

  • Guideline B-21 outlines OSFI’s expectations concerning mortgage insurers’ governance and internal risk management practices.
  • The guideline outlines principles for mortgage insurers’ own internal underwriting operations, including setting prudent requirements for lenders and applying appropriate due diligence to lenders’ practices.
  • The guideline enhances disclosure requirements, which will support greater transparency, clarity and public confidence in mortgage insurers’ residential mortgage insurance underwriting practices.
  • The public consultation process resulted in 15 submissions, which were helpful in refining the guideline. The comments have been summarized and addressed in an annex to the cover letter.
  • Federally regulated mortgage insurers are well positioned to meet the principles set out in Guideline B-21 by the implementation deadline of June 30, 2015.
  • For clarity and consistency, OSFI has made a small number of consequential changes to Guideline B-20, which is also being released today. The changes, which relate to income verification, incentive and rebate payments, and the role of the Board (specifically, the mortgage underwriting declaration), are explained in the Annex to the cover letter. The implementation deadline for revised Guideline B-20 is the same as for Guideline B-21.

Associated Links

  • A copy of Guideline B-21, the cover letter and other supporting documents are available at the following link.
  • A copy of Guideline B-20 is available at the following link.

Media Contact

Annik Faucher
OSFI – Public Affairs

Created in 1987 by an Act of Parliament, OSFI is the primary regulator and supervisor of federally regulated deposit-taking institutions, insurance companies, and federally regulated private pension plans. OSFI's mandate is to advance and administer a regulatory framework that contributes to public confidence in a strong, stable and competitive financial system.