The Office of the Superintendent of Financial Institutions is withdrawing an outdated guideline for segregated funds.

OSFI says that it no longer needs its guideline dealing with “Guideline 3-8, Equity-Linked Insurance and Annuity Contracts with Guaranteed Benefits” which was originally issued in June 1971.

In a letter to all federally regulated life insurance companies, Michael Hafeman, assistant superintendent, says, “The guideline addressed reserving practices and some product design features for products of that era.”

With the current reserving guidance and capital requirements in place, OSFI has determined that Guideline E-8 is no longer necessary. OSFI will withdraw it as of May 16.

With reference to the existing guidelines, OSFI’s letter says, “If segregated fund products are developed that differ materially from the forms for which the factors were developed, it is incumbent upon the company or society to follow the Modelling and Calibration requirements found in Chapter 9, Section 10, of Guideline A. Given the potential complexity of assessing and approving the use of specialized factors or internal models, we recommend that applicants provide for substantial lead time for such approvals.”