Completing OSFI Guideline Consequential Changes as a Result of IFRS 17
Information
Table of contents
To: All Federally Regulated Insurers (FRIs)
OSFI has finalized the outcomes of the consultation on consequential changes as a result of International Financial Reporting Standard 17 - Insurance Contracts (IFRS 17). OSFI has also set out plans for further work to refine any elements that remain:
- OSFI’s insurance capital related guidelines are continuing on a separate timeline.
- Guideline E-16 Participating Account Management and Disclosure to Participating Policyholders and Adjustable Policyholders remains under review in consultation with the industry to refine the expectations with an anticipated public release in Q1 2023.
The first annex to this letter provides links to the affected guidelines as they exist now, and to the revised versions that come into effect on January 1, 2023. The guidelines found in Annex 2 are not being amended or replaced. Older versions and guidelines that are no longer in force will be removed from OSFI’s website in December of 2023. The delayed removal (Dec 31/23 vs Jan 1/23) considers the range of federally regulated institution’s year-end implementation dates.
If there are further questions related to this process or the guidelines referenced, please contact information@osif-bsif.gc.ca.
While work towards institutions’ implementation of IFRS 17 remains, the completion of this work demonstrates the value of consulting with the industry in refining and modernizing OSFI’s guidelines to ensure their continued effectiveness.
Sincerely,
Ben Gully
Deputy Superintendent
| Currently in force guideline | Guideline in force as of January 1, 2023 | Changes since previous consultation |
|---|---|---|
| Guideline D-5 Structured Settlements | Guideline D-5 Structured Settlements | Changes to Guideline D-5 Accounting for Structured Settlements reflect feedback received from the industry for better consistency with IFRS 17, in particular for financial reporting implications of Type 2 structured settlement arrangements. |
| IFRS 9 Financial Instruments and Disclosures | IFRS 9 Financial Instruments and Disclosures | Changes to IFRS 9 Financial Instruments and Disclosures Section 3.2 Annual Disclosures for Property & Casualty Insurers reflect updated references and terminology to ensure it is clear and consistent with IFRS 17. |
| Guideline | Rationale |
|---|---|
| C-1 — Impairment - Sound Credit Risk Assessment and Valuation Practices for Financial Instruments at Amortized Cost | Guideline C-1 discusses incurred loss accounting, which will become redundant as a result of the move to the IFRS expected credit loss model. Therefore, this Guideline will be rescinded upon transition to IFRS 9. |
| D-1A — Annual Disclosures | Has been incorporated into IFRS 9 Financial Instruments and Disclosures Guideline (Section 3.1). |
| D-1B — Annual Disclosures | Has been incorporated into IFRS 9 Financial Instruments and Disclosures Guideline (Section 3.2). |
| D-6 — Derivatives Disclosure | Has been incorporated into IFRS 9 Financial Instruments and Disclosures Guideline (Section 3.3). |
| D-9 — Source of Earnings Disclosure (Life Insurance Companies) | No longer relevant under IFRS 17 as new regulatory reporting forms capture relevant earnings information. |
| D-10 — Accounting for Financial Instruments Designated as Fair Value Option | Has been incorporated into IFRS 9 Financial Instruments and Disclosures Guideline (Section 1.IV). |
| E-12 — Inter-segment Notes for Life Insurance Companies | The guideline was intended to apply to CALM valuations only. |
| F1-F12 — Rescinded Letter (August 22, 2005) | No longer relevant. Will be removed at the end of the consultation period. |