Canada Initiates ORSA (And Other Recent Regulatory Developments)

Draft ORSA guideline

Life and property and casualty insurers in Canada may be required to implement their "own regulatory solvency assessment" ("ORSA") by next January. In December, 2012, OSFI¹ issued Draft Guideline E-19: Own Risk and Solvency Assessment (the "Draft Guideline"), proposed to be effective January 1, 2014. OSFI is currently assessing commentary received on the Draft Guideline and expects to issue the final version in the Fall of 2013.

An insurer's ORSA is to reflect the insurer's own view of its risks and solvency requirements (as opposed, for example, to a solvency test or formula imposed by a regulator). As such, each insurer will be expected to individualize its approach to performing the assessment, proportionate to the nature, scale and complexity of the insurer's business and risk profile. Insurers that are part of a corporate group may take a consolidated approach (i.e. at the level of the top OSFI-regulated entity) and subsidiaries and