Remarks by Superintendent Julie Dickson, Office of the Superintendent of Financial Institutions Canada (OSFI), to the 2010 Life Insurance Invitational Forum
Cambridge, ON; November 8, 2010 — This conference is being held at an opportune time given the challenges facing life insurers globally � historically low interest rates, transformational accounting changes being proposed by the International Accounting Standards Board (IASB), and the overhaul of life insurance capital rules underway by most global regulators.
The best way to face these changes is to prepare for them. These changes may mean that life insurance companies will have to face some fundamental questions about what business lines they are going to be in, and how they will manage them. If it�s any comfort, banks are also in the midst of fundamental changes with the new Basel III accord, and the regulatory reform process is not over. Among other work, there is a review of capital requirements for trading activities on the horizon, contingent capital requirements in the making, and of course discussions about what makes an institution systemic from a global perspective.
The best thing to say is that nothing is static and gone are the days when companies could go about their business in a relatively benign environment with few changes being imposed externally.
….The comments were in four areas:
- Changes Faced by the Canadian Life Insurance Industry over Time
- Segregated funds and Market consistent approach
- Risk Management
My main message tonight has been to emphasize the challenges that being in a long term business creates and that the changes being debated and implemented now will continue to transform the life insurance industry. I hope you will have a lot of productive discussions over the next day and a half. There is certainly a lot to talk about.
Full text of the remarks are here.
OSFI is an independent agency of the Government of Canada. It reports to the Minister of Finance. For more information visit www.osfi-bsif.gc.ca.