OSFI Issues Revised Capital Requirements For Property And Casualty Insurers

On September 24, 2014, the Office of the Superintendent of Financial Institutions (OSFI) issued the revised Minimum Capital Test Guideline(Guideline) setting forth more robust risk-based capital requirements applicable to federally regulated property and casualty insurance companies (P&C Insurers) beginning January 1, 2015, on a phased-in basis. The Guideline applies to Canadian P&C Insurers and foreign P&C Insurers operating in Canada on a branch basis. It is part of OSFI's broader initiative to better align capital frameworks across financial sectors.

In 2013, OSFI identified the need to update the Guideline, originally issued in 2003, to move toward a more risk-based approach addressing changing risks affecting the property and casualty insurance industry. As a result, OSFI issued in May 2013 the Discussion Paper on OSFI's Proposed Changes to the Regulatory Framework for Federally Regulated Property and Casualty Insurance Companies, outlining proposed changes to