Federal financial regulators are proposing new guidance for insurers’ securitization exposures that aims to reflect developments since the financial crisis.
The Office of the Superintendent of Financial Institutions (OSFI) on Friday proposed a new guideline that sets out the federal banking and insurance regulator;s expectations for insurers regarding asset securitization transactions.
OSFI’s original guideline in this area was published back in 2004, and han’t been comprehensively updated since then.
The proposed amendments are designed to reflect market developments since 2004, including the financial crisis and the resulting changes to the Basel Framework, OSFI states in a letter to insurance companies.
“The proposed revisions incorporate operational and qualitative requirements issued by the Basel Committee on Banking Supervision since the commencement of Basel III,” OSFI explains in its guideline impact analysis statement “They also update the capital treatment applicable to insurers that invest in securitizations, and that sponsor securitizations.”
Comments on the guideline are due by Oct. 12.
OSFI expects to final guideline to take effect on Jan. 1, 2019.