Office of the Superintendent of Financial Institutions
OSFI is issuing a discussion paper as part of its review of the reinsurance framework applicable to federally regulated insurers. The discussion paper outlines a number of proposals designed to enhance and maintain an effective framework.
OSFI recognizes reinsurance as an important risk management tool. Reinsurance can also expose insurers to operational risks, among others. Key proposals in the discussion paper aim to address risks associated with large exposures and concentration, particularly for direct writers of property and casualty (P&C) insurance. The discussion paper includes other proposed changes to the reinsurance framework that would affect all federally regulated insurers. These proposals include enhancements to OSFI's guidance on sound reinsurance practices and procedures, and changes to the administration of the statutory requirement to obtain the Superintendent's approval to reinsure with an unregistered reinsurer.
The discussion paper also references reinsurance related amendments that will be made to the next draft Minimum Capital Test (MCT) guideline for federally regulated P&C insurers. The draft revised MCT guideline will be released for comment in the coming weeks.
OSFI is committed to ensuring its reinsurance framework remains appropriate and effective. We appreciate the industry's collaboration and support in this regard. Comments on the discussion paper may be emailed to:
Reinsurance-Reassurance@osfi-bsif.gc.ca by September 15, 2018.
Alternatively, written comments may be addressed to:
Comments specific to the draft MCT guideline should be submitted in accordance with the procedures detailed in that document when it is released.
Neville Henderson Assistant Superintendent, Insurance Supervision Sector
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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