The Office of the Superintendent of Financial Institutions has issued an advisory clarifying its methodology for calculating capital requirements for segregated funds.

Last October OSFI announced changes to the capital requirements for seg fund guarantees for companies with an approved internal model, allowing companies to determine the capital requirement using an alternative method. On Tuesday, OSFI published an advisory that provides additional information on how the alternative method is to be implemented.

The new advisory also provides information on the extent to which insurers with seg fund guarantee exposure in more than one business unit may rank scenarios in a way that is consistent across business units.

IE