The Office of the Superintendent of Financial Institutions (OSFI) published a set of proposed changes to the capital rules for life insurers on Friday.
Specifically, OSFI is proposing changes to the rules regarding its expectations for insurers when setting their internal capital targets based on their in-house assessment of risks, capital needs and solvency position; and changes to the rules that define regulatory capital and internal capital targets, which also outlines the role of capital in OSFI’s risk-assessment process.
The proposed changes are largely due to the planned introduction of the Life Insurance Capital Adequacy Test (LICAT) for life insurers in 2018, which will necessitate changes to the existing capital framework for insurers.
Comments on the proposed changes to the existing rules are due by Aug.18, in anticipation of the final rules being published in the autumn. The changes would take effect in January 2018.