The Office of the Superintendent of Financial Institutions (OSFI) is seeking comment on proposed disclosure requirements under the new capital regime for life insurers after issuing the draft rules on Friday.

OSFI’s draft rules set out public disclosure requirements under the new risk-sensitive capital rules for life insurers, known as LICAT (the Life Insurance Capital Adequacy Test).

“The transition to LICAT provides an opportunity to improve the measurement and disclosure of risks associated with insurance activities. In addition, disclosures that are simple, useful and comparable can encourage prudent behaviour through market discipline,” OSFI says in a statement accompanying the proposed guidance.

OSFI also suggests that the disclosure, and accompanying market scrutiny, will promote “good governance and improve oversight of risk taking activities.”

OSFI recommends that the new LICAT public disclosure requirements should provide quantitative and qualitative information to give the market “a broader picture” of insurers’ capital and risk positions; that the requirements will be implemented for the year ended 2018; and that the new disclosure should be published alongside firms’ annual financial reports on their websites.

Comments on the proposed guideline are due by Oct. 20. The new LICAT regime is slated to take effect on Jan. 1, 2018.