Office of the Superintendent of Financial Institutions
International Financial Reporting Standard (IFRS) 17 Insurance Contracts, published by the International Accounting Standards Board in May 2017, has been deferred; it will now become effective for annual reporting periods beginning on or after January 1, 2023. This letter updates the Office of the Superintendent of Financial Institutions (OSFI)
previously communicated timelines to revise its existing capital guidance for insurers, namely Guidelines A:
Life Insurance Capital Adequacy Test (LICAT),
Minimum Capital Test (MCT) and
Mortgage Insurer Capital Adequacy Test (MICAT).
OSFI has made significant progress towards adapting its capital guidelines for insurers:
For life insurers with segregated fund guarantee (SFG) business, development work on the new standard approach for determining associated capital requirements has been following a separate project plan. Additional details related to the plan will be communicated later this year.
OSFI will continue its capital policy development process, including quantitative assessments, to implement IFRS 17 in a robust and timely way in its insurance capital guidelines. The remaining key milestones include:
Consistent with past communications with respect to LICAT and MCT and to the extent possible, OSFI intends on maintaining capital frameworks consistent with current capital policies and minimizing potential industry-wide capital impacts.
Questions regarding this letter should be directed to Lisa Peterson, Managing Director, Life Insurance Capital
(email@example.com), or Henri Boudreau, Managing Director, Property, Casualty and Mortgage Insurance Capital
Bernard Dupont Senior Director Capital Division
For the purpose of this letter, “insurers” refers to all federally regulated insurers, including Canadian branches of foreign life and property and casualty companies, fraternal benefit societies, regulated insurance holding companies and non-operating insurance companies.
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