The Office of the Superintendent of Financial Institutions needs to improve its service to life insurance companies, according to a new report.

On Thursday, OSFI published the report on the results of a survey it commissioned in Spring 2008 concerning its service to the life insurers. The survey carried out by The Strategic Counsel, an independent research firm.

The regulator notes that while it is generally perceived to be effective in the overall discharge of its mandate, some areas for improvement were identified.

Some of the areas that received relatively less positive ratings include supervisory staff knowledge of life insurance practices and trends, and requirements for life insurance companies in the Anti-Money Laundering/Anti-Terrorist Financing area, relative to the perceived risks they are intended to address.

OSFI also tends to receive relatively weaker scores in the following areas, the report notes:

> consistency in life insurance company treatment;

> satisfaction that company views concerning revision of capital requirements are heard in the consultation process;

> responding in a timely manner to market changes or industry suggestions that regulations and guidance need updating;

> developing regulations and guidance that strike an appropriate balance between prudential considerations and the need for institutions to compete; and

> perceived effectiveness of OSFI’s processes for representing the interest of the Canadian financial services industry in international forums; among other things.

Survey participants were asked to identify a number of risk areas that they feel should be priorities for OSFI in the next couple of years, and the most frequently mentioned risk areas were:

> the transition to International Financial Reporting Standards and its impact on capital requirements and solvency;

> capital requirements;

> complex financial instruments and products;

> asset-backed commercial paper/credit risk; and

> the global insurance industry.

OSFI says it appreciates the feedback provided in this consultation and is developing an action plan to address a number of the areas identified for improvement and will keep industry informed of its progress. Future consultations will monitor OSFI’s overall effectiveness and its progress in addressing areas for improvement.

IE