The Office of the Superintendent of Financial Institutions has issued new Minimum Continuing Capital and Surplus Requirements for life insurance companies and fraternal benefit societies.

The changes are effective for fiscal year-end 2002. The revised guideline contains significant changes from the September 2001 version.

OSFI says that the most significant revisions include: new asset default requirements for assets backing participating policies; a new capital requirement has been added for assets backing index-linked products; the mortality risk factors for non-participating individual insurance policies have been reduced.

Also, in addition to permitting companies to use internal models for the development of segregated fund capital requirements for foreign business, internal models are now allowed for Canadian business, subject to specific criteria.