Front Matter Page
IMF Country Report No. 14/72
CANADA
FINANCIAL SECTOR ASSESSMENT PROGRAM
INSURANCE CORE PRINCIPLES—DETAILED ASSESSMENT OF OBSERVANCE
March 2014
This Detailed Assessment of Observance of Insurance Core Principles on Canada was prepared by a staff team of the International Monetary Fund as background documentation for the periodic consultation with the member country. It is based on the information available at the time it was completed in February 2014.
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© 2014 International Monetary Fund
Front Matter Page
CANADA
FINANCIAL SECTOR ASSESSMENT PROGRAM
INSURANCE CORE PRINCIPLES DETAILED ASSESSMENT OF OBSERVANCE
February 2014
Prepared By
Monetary and Capital Markets Department
This Detailed Assessment Report was prepared in the context of an IMF Financial Sector Assessment Program (FSAP) mission in Canada during June 2013, led by Aditya Narain, IMF and overseen by the Monetary and Capital Markets Department, IMF. Further information on the FSAP program can be found at http://www.imf.org/external/np/fsap/fssa.aspx
Contents
Acronyms
EXECUTIVE SUMMARY
ASSESSMENT OF INSURANCE CORE PRINCIPLES
A. Introduction and Scope
B. Information and Methodology Used for Assessment
C. Overview—Institutional and Macroprudential Setting
D. Preconditions for Effective Insurance Supervision
E. Recommendations and Authorities’ Response
DETAILED ASSESSMENT
TABLES
1. Insurance Market Structure as at end-2012
2. Composition of Assets—L&H FRIs (Legal Entities)
3. Composition of Assets—P&C FRIs (Legal Entities)
4. Trend in Technical Provisions—L&H FRIs
5. Trend in Technical Provisions—P&C FRIs
6. Gross Premiums by Major Lines of Business in 2012—L&H FRIs
7. Premiums by Major lines of business in 2012—P&C FRIs
8. Solvency Position of FRIs
9. Summary of Compliance with the ICPs
10. Summary of Observance Level
11. Recommendations to Improve Observance of the ICPs
12. Detailed Assessment of Observance of the ICPs
Acronyms
| AA |
Appointed Actuary |
| AASB |
Canadian Auditing and Assurance Standards Board |
| AI Act |
Access to Information Act |
| AMF |
Autorité des Marchés Financiers |
| AMF Act |
An Act Respecting the Autorité des Marchés Financiers |
| ASB |
Accounting Standards Board |
| BAAT |
Branch Adequacy of Assets Test |
| BDR |
Bureau de Décision et de Révision |
| BoC |
Bank of Canada |
| CAD |
Chambre de L’assurance de Dommages |
| CALM |
Canadian Asset Liability Method |
| CBA |
Canadian Bankers’ association |
| CCG |
Corporate Governance Guideline |
| CCIA |
Canadian Institute of Chartered Accountants |
| CCIR |
Canadian Council of Insurance Regulators |
| CCRA |
Conseil Consultatif de Régie Administrative |
| CDIC |
Canada Deposit Insurance Corporation |
| CEO |
Chief Executive Officer |
| CFO |
Chief Financial Officer |
| CG Guideline |
Corporate Governance Guideline |
| CIA |
Canadian Institute of Actuaries |
| CISRO |
Canadian Insurance Services Regulatory Organizations |
| Civil Code |
Civil Code of Québec |
| CLHIA |
Canadian Life and Health Insurance Association |
| CMHC Act |
Canada Mortgage and Housing Corporation Act |
| CoB |
Conduct-of-Business |
| CPAB |
Canadian Public Accountability Board |
| CRR |
Composite Risk Rating |
| CSA |
Canadian Securities Administrators |
| DA |
An Act respecting the Distribution of Financial Products and Services |
| Disclosure-Reg |
Regulation Respecting Information to be Provided to Consumers |
| DA-Reg |
Regulations under DA |
| DPR |
Departmental Performance Report |
| DoF |
Department of Finance |
| DWR |
Distribution with a Representative |
| ERM |
Enterprise Risk Management |
| FCAC |
Financial Consumer Agency of Canada |
| FESP |
Framework for Exercising the Superintendent’s Powers |
| FIs |
Financial Institutions |
| FINTRAC |
Financial Transactions and Reports Analysis Centre of Canada |
| FIPPA |
Freedom of Information and Protection of Privacy Act |
| FRFIs |
Federally Regulated Financial Institutions |
| FRIs |
Federally Regulated Insurers |
| FRHOG |
Federally Regulated Head of Group |
| FISC |
Financial Institutions Supervisory Committee |
| FSCO |
The Financial Services Commission of Ontario |
| FSCO Act |
Financial Services Commission of Ontario Act, 1997 |
| FST |
Financial Services Tribunal |
| FTE |
Full Time Equivalent |
| Government |
Government of Canada |
| GWL |
The Great West Life Assurance Company |
| GWS |
Group-wide Supervisor |
| HoG |
Head of Group |
| IA |
An Act Respecting Insurance (Québec) |
| IA-Reg |
Regulation under the Act Respecting Insurance |
| IFRS |
International Financial Reporting Standards |
| IBC |
Insurance Bureau of Canada |
| ICA |
Insurance Companies Act |
| ILS |
Insurance Linked Securities |
| ITCR |
Internal Target Capital Ratio |
| IVIC Guideline |
Guideline on Individual Variable Insurance Contracts Relating to Segregated Funds |
| JFFMR |
Joint Forum of Financial Market Regulators |
| LTV |
Loan-to-Value |
| L&H |
Life and Health |
| MAR |
Minimum Asset Requirement |
| MCT |
Minimum Capital Test |
| MCCSR |
Minimum Continuing Capital and Surplus Requirement |
| MFC |
Manulife Financial Corporation |
| MFEQ |
Minister of Finance and the Economy |
| MGAs |
Managing General Agencies |
| Minister |
Minister of Finance |
| MoU |
Memorandum of Understanding |
| PACICC |
Property and Casualty Insurance Compensation Corporation |
| P&C |
Property and Casualty |
| PCTFA |
Proceeds of Crime (Money Laundering) and Terrorist Financing Act |
| PSC |
Public Service Commission |
| PSOA |
Public Service of Ontario Act, 2006 |
| OIA |
Insurance Act of Ontario |
| ORSA |
Own Risk and Solvency Assessment |
| OSFI |
The Office of the Superintendent of Financial Institutions |
| OSFI Act |
The Office of the Superintendent of Financial Institutions Act |
| RAM |
Risk Assessment Model |
| RBSF |
Risk-based Supervision Framework |
| Representatives-Reg |
Regulation Respecting the Pursuit of Activities as a Representative |
| RIB Act |
Registered Insurance Brokers Act |
| RIBO |
Registered Insurance Brokers of Ontario |
| RM |
Relationship Manager |
| RoE |
Return on Equity |
| SLF |
Sun Life Financial Inc. |
| SROs |
Self-regulatory Organizations |
| TAR |
Target Asset Requirement |
| TAAM |
Test of Adequacy of Assets and Margin |
| VaR |
Value at Risk |
| WURA |
Winding-Up and Restructuring Act |