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ARTICLE · 18 FEBRUARY 2022

OSFI Releases Final Revised Reinsurance Guidelines To Take Effect In 2025

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The Guidelines are designed the ensure Canada's reinsurance framework remains appropriate and effective given changing industry practices since the last review, conducted over a decade ago.

CanadaInsurance
Darcy Ammerman
Darcy Ammerman
Tayler Farrell
Tayler Farrell
Ricki-Lee Williams
Ricki-Lee Williams
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On February 11, 2022, the Office of the Superintendent of Financial Institutions (" OSFI ") published the final revised Guideline B-3, Sound Reinsurance Practices and Procedures and the final Guideline B-2, Property and Casualty Large Insurance Exposures and Investment Concentration (the "Guidelines"). The Guidelines are designed the ensure Canada's reinsurance framework remains appropriate and effective given changing industry practices since the last review, conducted over a decade ago. The Guidelines will take effect on January 1, 2025, providing federally regulated insurers and foreign branches (as the context requires, " FRIs ") with a three-year transition period.

Reinsurance is an important risk and capital management tool, as it allows FRIs to purchase insurance from other insurers, reinsurers or counterparties (the ceding company or cedant) as a means of sharing risk and limiting the FRI's exposure to large and catastrophic losses. It also allows insurers

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The foregoing provides only an overview and does not constitute legal advice. Readers are cautioned against making any decisions based on this material alone. Rather, specific legal advice should be obtained.

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