


OSFI Publishes Draft of Revised Guideline for Minimum Capital Test for Federally Regulated Property and Casualty Insurance Companies
OSFI Publishes Draft of Revised Guideline for Minimum Capital Test for Federally Regulated Property and Casualty Insurance Companies
As discussed in our previous bulletin found here, in 2015, the Office of the Superintendent of Financial Institutions Canada (“OSFI”) substantially revised the Minimum Capital Test Guideline to implement a more robust risk-based capital test that aligns capital requirements to the level of risk experienced by the property and casualty insurance industry (the “2015 MCT Guideline“).
OSFI has recently proposed several revisions to the 2015 MCT Guideline that will take effect in 2016 (the “2016 MCT Guideline“). The objective of the 2016 MCT Guideline update is to improve regulatory risk-based capital guidance. The most significant proposed change to the 2015 MCT Guideline is the addition of further provisions for equity risk exposures. These provisions include capital requirements for equity derivatives (such as equity total return swaps, futures and forwards) and equity instruments held short, and the recognition of equity hedging strategies used by property and casualty insurers. The other revisions amend the wording of the 2015 MCT Guideline to incorporate clarifications, to make accounting terminology consistent with international accounting standards, and to enhance consistency in capital requirements across the financial services sector.
OSFI has issued a draft 2016 MCT Guideline that contains these proposed revisions. OSFI will receive comments on its draft until September 4, 2015. On January 1, 2016, the revisions will take effect. The draft 2016 MCT Guideline can be found here.
by Sean Brandreth, Carol Lyons, Pat Forgione and Kathryn Hart, Student-at-Law
A Cautionary Note
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.
© McMillan LLP 2015
Insights (5 Posts)View More
Competition Tribunal Does Big Box Office: Insights from the Cineplex Drip Pricing Decision
The Competition Tribunal issued a decision in Commissioner of Competition v. Cineplex Inc., marking the first enforcement of the "drip pricing" provisions
The Pause on the Tariff War: How Businesses Can Use the Reprieve Wisely
Canadian businesses should prepare for US tariffs, set for March 4, 2025, by considering availability of duty drawbacks and remission applications.
Trade Wars and the Workplace: An Employer’s Guide to Temporary Layoffs
Amid the uncertainty of a trade war, employers are well-advised to review the rules and legal consequences of temporary layoffs.
Lobbying 101: Everything You Need to Know During the Ontario 2025 Election
This article covers lobbyists' responsibilities during the writ period for the 2025 Ontario provincial election.
Show Me the Money: Contributions and Doing Business During the 2025 Ontario Election
Ontario's election takes place on February 27, 2025: This article explains how elections are funded and other important business considerations.
Get updates delivered right to your inbox. You can unsubscribe at any time.