The Office of the Superintendent of Financial Institutions has published a new guideline regarding the role of independent actuaries in filings required during insurance company mergers.

The guideline sets out the responsibilities and duties of the Independent Actuary in the preparation of a report as required by the Insurance Companies Act, or by OSFI, for amalgamations, sale of all the assets, business transfers, purchases and reinsurance not in the ordinary course of business, or in any special situation. This guideline modifies and clarifies OSFI’s position regarding the appointment and the role of the Independent Actuary and provides guidance on the report and the opinion that are expected.

In cases where the legal requirements of the jurisdiction provide for voting and/or other proprietary rights that extend to non-participating policyholders, the report should take into account the effect of the transaction on the rights of these policyholders

In cases where closed blocks of business are part of the transaction, the report should consider the effect of the transaction on the operating rules of these blocks and on the policyholders’ benefits and expectations.

The actuary should ensure that current and future rules for the closed blocks are not changed or if they are, that they are appropriately converted, with initial and future monitoring, certifications and approvals remaining in place to adequately protect the interests of the policyholders concerned.