OSFI issues Revised Minimum Capital Test Guideline for 2015

OTTAWA – September 24, 2014 ─ Ottawa, Ontario ─ Office of the Superintendent of Financial Institutions

The Office of the Superintendent of Financial Institutions (OSFI) today released a revised Minimum Capital Test Guideline (the Guideline) for property and casualty insurers. The purpose of the revision was to create a more robust risk based capital framework that better aligns capital requirements to the risks faced by property and casualty insurers.

Quick Facts

  • The Guideline introduces new and updated risk factors and margins plus a revised definition of available capital. They have been revised through public consultations, industry input, and robust testing and analysis.
  • The Guideline comes into force on January 1, 2015. Federally regulated property and casualty insurers are well positioned to implement the Guideline, which provides for a three (3) year phase-in period.
  • The new risk-based capital framework results in a slight 2.8 percentage point decline in the capital ratio (MCT/BAAT combined ratio) on average across the entire industry. Although the decline in the overall capital ratio is not material, the impact may vary by individual company as the new framework better aligns each insurer’s capital requirements with its risk profile.
  • OSFI will continue to monitor emerging issues and developments in the property and casualty insurance industry and will periodically revise the Guideline so that it continues to accurately reflect risks.


“This new version of the guideline represents a more robust risk-based test that more accurately aligns capital requirements to the risks faced by the property and casualty insurance industry. This guideline would not have been possible without the industry’s significant cooperation over the past few years,” said Deputy Superintendent Mark Zelmer.    

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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.