Office of the Superintendent of Financial Institutions
For Immediate Release
OTTAWA ─ June 8, 2018 ─ Office of the Superintendent of Financial Institutions
The Office of the Superintendent of Financial Institutions (OSFI) today released its Reinsurance Framework Discussion Paper.
Reinsurance can reduce an insurer's insurance risks, stabilize its solvency, help it better withstand catastrophic events, and increase its underwriting capacity. At the same time, reinsurance can expose an insurer to increased operational, counterparty and legal risks. Prudently balancing the risks and benefits of reinsurance is as complex as it is important.
This paper discusses areas where changes are being considered in OSFI's current reinsurance framework. Key proposals aim to address risks associated with large exposures and concentration, particularly in the property and casualty (P&C) insurance sector. Adjustments to the capital framework for P&C insurers are also being considered. Through this consultation, the industry is invited to share views that will help guide OSFI's assessment of both near term and longer term proposals to strengthen the reinsurance framework.
"In light of the increasing reliance on reinsurance and the emergence of new and evolving business models related to the use of reinsurance, OSFI is working to ensure its reinsurance framework remains appropriate," said Neville Henderson, Assistant Superintendent, Insurance Supervision Sector. "This discussion paper is a key step in OSFI's commitment to engage stakeholders, and all responses that will help maintain an effective regulatory approach to reinsurance will be carefully considered."
The Office of the Superintendent of Financial Institutions (OSFI) is an independent agency of the Government of Canada, established in 1987, to protect depositors, policyholders, financial institution creditors and pension plan members, while allowing financial institutions to compete and take reasonable risks.
OSFI – Public Affairs