The Office of the Superintendent of Financial Institutions (OSFI) today published its latest sets of capital rules for insurers.

OSFI issued a draft of the new capital rules for property and casualty (P&C) insurers, which are slated to take effect in 2015.

The new guideline updates the capital framework, using a risk-based formula, including the target and minimum capital and margin required. It also defines the capital/assets that are available to meet the minimum standard. On average, the total capital impact of the new rules will increase the minimum capital test (MCT) ratio by four percentage points for the P&C industry overall, from 246% to 250%, OSFI reports.

Separately, OSFI announced its updated minimum continuing capital and surplus requirements (MCCSR) for life insurers, which are due to take effect Jan. 1, 2014.

Among other things, the revised guideline includes enhanced consistency with other OSFI rules; adopts a new specific treatment for assets classified as held-for-sale; requires that collateral pledged under unregistered reinsurance arrangements be available for the full term of the liabilities; and, allows firms to use unsolicited ratings for sovereigns, where solicited ratings are not available.

The final version of the guideline takes into consideration the comments received from the industry, and others, during the public consultation period.