OSFI to overhaul Canadian life insurance regulation

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Sept., 2009 – Canada’s insurance and financial services regulator has released a framework of regulatory changes for the life insurance industry.

The Office of the Superintendent of Financial Institutions’ (OSFI) newly-released Life Insurance Regulatory Framework provides life insurance companies and industry stakeholders with an overview of regulatory initiatives that OSFI will be focusing on over the period ending 2016.

“In laying out OSFI’s initiatives, we hope to encourage discussion and strong participation by industry stakeholders in our regulatory development process,” said Mark Zelmer, Assistant Superintendent, Regulation Sector in a statement. “Canadians have benefited from a strong life insurance industry and a flexible, effective regulatory framework. Our initiatives aim to ensure this continues.”

OSFI said the Framework includes initiatives that seek to achieve the following broad objectives:

  • Life insurance companies’ governance infrastructure and culture fully oversee their risk-taking through increased integration between risk measurement, risk management and pricing for risk.
  • OSFI’s regulatory framework continues to support and complement this risk-governance and information-sharing culture.
  • Life insurance companies provide transparent information, allowing stakeholders to better understand the insurance business, understand companies’ risk-taking activities and challenge institutions to continue to better measure and manage their risks.

“This framework addresses OSFI’s key regulatory objectives and its approach to refining regulatory oversight and guidance that is already robust,” said Zelmer. “By issuing the regulatory framework at this time, OSFI hopes it will help life insurers and industry stakeholders in their planning processes.”

OSFI said it intends to have public consultations on the processes, beginning late this year. By the fourth quarter of 2013 and through the first quarter of 2014, it aims to have final guidelines issued.