OSFI Provides Update On IFRS 17 Adoption

In preparation for the introduction to Canada of International Financial Reporting Standard 17 Insurance Contracts ("IFRS 17"), the Office of the Superintendent of Financial Institutions ("OSFI") will be revising its key capital tests for insurers, in order to align more closely with IFRS 17.

IFRS 17 comes into effect in Canada on January 1, 2021. In advance of this date, the Life Insurance Capital Adequacy Test ("LICAT") and Minimum Capital Test ("MCT"), which set capital rules for insurers, will need to be revised to support IFRS 17. In the meantime, OSFI will be working with other Canadian regulators and the insurance industry on the revised rules and tests, as well as an effective transition from the current accounting state to IFRS 17.