Toronto, Ontario Tuesday, June 9, 2009 CHECK AGAINST DELIVERY. For additional information contact:

Size: px
Start display at page:

Download "Toronto, Ontario Tuesday, June 9, 2009 CHECK AGAINST DELIVERY. For additional information contact:"

Transcription

1 Remarks by Superintendent Julie Dickson Office of the Superintendent of Financial Institutions Canada (OSFI) to the 2009 OSFI Risk Management Seminar for Life Insurance Companies Toronto, Ontario Tuesday, June 9, 2009 CHECK AGAINST DELIVERY For additional information contact: Jason LaMontagne Communications and Public Affairs

2 Remarks by Superintendent Julie Dickson Office of the Superintendent of Financial Institutions Canada (OSFI) to the 2009 OSFI Risk Management Seminar - Life Toronto, Ontario Tuesday, June 09, 2009 Risk Management in the Life Insurance Industry Introduction Welcome to the first annual OSFI Risk Management Seminar for the life insurance industry. A year ago OSFI decided to hold annual sessions with the Chief Risk Officers (CROs) of banks, life companies and property and casualty (P&C) companies. We began with a session for CROs of Deposit Taking Institutions (DTIs) in September 2008 and have now moved to life companies. P&C will be held in the fall, along with the second session for DTIs. This is a forum for OSFI to share its views and discuss some of our expectations, and of course to get input from you. These seminars grew out of the very positive response to other sessions we have run over the past several years with industry, covering areas such as Approvals and Precedents, and anti-money laundering. It also reflects a key learning from the global financial turmoil: there is a real need for regulators and financial institutions to focus on both the role of the Chief Risk Officer, and solid risk management practices. Industry and Regulatory change Like the Canadian banking sector, the Canadian life insurance industry has generally shown itself to be relatively prudent. Some mistakes have been made, as were made in the banking sector, but Canadian life companies entered the global market turmoil and recession with high levels of capital and relatively sound investment portfolios. Over the past 10 years, the Canadian life insurance industry has been significantly transformed. This transformation began with the process of demutualization, followed by a period of rapid consolidation. Moving from mutual companies to stock companies has created much more market pressure to perform well. Consolidation and expansion internationally in this period also led 1

3 to the creation of significantly larger companies that are much more complex to manage. Thus the role of CRO has become much more demanding. OSFI has also seen a significant change in its supervisory practices in the last 10 years. The way we supervise was completely overhauled beginning in 1999, with the adoption of risk based supervision. The International Association of Insurance Supervisors (IAIS) was also created around that time, and Canada has been a key player there from the start. In 10 years the IAIS has made up a lot of ground in terms of setting out sound practices in the life insurance industry, but the Basel Committee on Banking Supervision (BCBS) has an additional 20+ years under its belt, and in my view the IAIS needs to continue to push to raise the bar internationally. Also, in 2004 the industry itself formed a group called the CRO Forum. It is a risk management group focused on developing and promoting best practices in risk management. We see it as a good way for CROs to talk about the challenges they face, because while CROs are valued today, their advice may not be as valued when times are good again. The Forum has already enunciated a number of solid principles and they are worth re-discovering. If you re going to talk the talk, you ve got to walk the walk. OSFI Initiatives The G-20 Working Group 1 report (co-chaired by Tiff Macklem of the Canadian Department of Finance) recommended, among other things, that the regulatory and oversight framework should strive to treat similar institutions and activities consistently, with greater attention on functions and activities and less emphasis on legal status. The integrated approach that OSFI provides helps ensure that Canada is well placed to follow the G-20 Working Group recommendations. OSFI has expended considerable effort in its transformation to an integrated regulator but this process continues and remains challenging. This process involves ensuring that the same risks are treated equally, regardless of industry. Thus we look for the same rules, and the same oversight and management for the same types of risk. This process was aided by legislative changes in 1992 that ensured that, where possible, legislation applying to banks and life companies was identical. Much progress has been made in OSFI s supervisory activities as well. As an integrated regulator, today OSFI will send the same team of credit risk specialists into insurance companies as we do banks. Our market risk teams will look at market risk in both sectors, and our operational risk team will look at op risk in each sector as well. The same holds true for anti-money laundering, where the same teams do the same work in both banks and insurance companies. 2

4 In our quest to become more integrated, about four years ago we nominated one senior director to have responsibility for both bank conglomerates and life conglomerates. This helped ensure that one supervisory approach was used for both industries. Having a common supervisory approach in place has been important, but in early 2008 we decided to revert back to a system with two senior directors one specializing in banking, and one specializing in insurance. Having two senior directors will balance work load issues and some of the challenges of full integration. There are some differences between insurers and banks that do call for considerable specialization; the actuarial component is one such challenge. After a search process, we were pleased to have Gaetano Geretto join us in the fall of 2008 as the Senior Director of Life Insurance Conglomerates. Specialization at some levels allows us to see the merits of the various approaches to analyzing risk, while integration at other levels allows for robust discussion of these approaches. Stronger integration will continue to be a focus at the level of the Assistant Superintendents, and at the level of Senior Director, Capital (where capital rules for both banks and life companies are set). On the theme of integration, the banking industry likes to say it is different than the life insurance industry, and the life insurance industry likes to say it is different than banking. To a degree, that is true, but in many respects it is not. Every issue needs to be addressed with a balanced perspective, and while we are open to explanations of why you may be different, we are also going to be focused on why you might very well be the same. In this vein, I will quickly touch on a few areas that are important, whether you are a bank or life company, and where your approaches should be similar. Capital Both banks and life insurance companies need to understand their capital regime. The emphasis in banking is to have a robust internal capital adequacy assessment process, and banks should never be surprised at the impact of their business decisions on capital requirements. If a bank s capital is volatile, it usually means that it has a point in time methodology, versus a through-the-cycle methodology. A through-the-cycle methodology is the most appropriate, as it requires banks to base assumptions about the likelihood of default of a loan based on experience over a long time period, one that includes periods of stress. This adds an element of conservatism to a bank s approach to capital, which also 3

5 helps to mitigate procyclicality. If a life insurance company s capital is volatile, it likely means the life company has a large unmitigated segregated fund guarantee risk exposure, and uses an actuarial reserving method that amplifies any change in the overall requirements. As you know, in the fall of 2008, OSFI announced changes to the capital requirements for segregated fund guarantees. This substantially reduced the volatility in capital requirements that was otherwise present, through the use of an averaging formula for obligations payable in greater than five years. There will be more discussion of capital later in this session. This is warranted because one of the learnings of the financial turmoil (in both banking and insurance) is that people focused on how events might affect capital after those events happened, not before. Segregated Funds One important message we always pass on to both banks and life insurance companies is: know your risks. In the banking world, many global banks misunderstood the risks in structured products, which led to large write-offs. At the same time, many life insurance companies misunderstood the risk associated with segregated fund guarantees. Two points are worth noting in terms of segregated fund risk. First, unlike traditional insurance risk, segregated fund risk is non-diversifiable. As equity markets decline, the amount the insurer will have to pay out increases on every policy it doesn't increase on some policies and decrease on others. The implication of this is that a company cannot reduce its segregated fund risk by simply selling more policies (growing the business), as it might be able to do for life insurance. Selling more segregated fund policies does not reduce risk, it actually increases it, because when the markets decline all segregated fund policies get hit at the same time. The more non-diversifiable risk a life company holds the more attention it needs to pay to risk management and capital. Unlike the complex structured products that global banks had, life companies have more time to adjust and plan for segregated fund guarantees that may have to be paid, as guarantees do not come due for many years. The second point about segregated fund risk is whether segregated fund guarantee products are like defined benefit pension plans, and whether they can be managed in the same way as a pension sponsor manages defined benefit pension plans. 4

6 We would say pensions and segregated funds are very different. While segregated fund guarantee products may have some features that make the product pension-like for the consumer, the crucial difference is that defined benefit pensions do not depend on the performance of stock markets; in particular, workers and retirees do not get a better pension if stock markets perform well. Put another way, as opposed to pensions, the segregated fund guarantee business has two unknowns: (1) the liabilities are not fully known (liabilities change with market movements as well as when resets are built into the product), and (2) the cost of funding the liabilities, as in pensions, can be variable depending on whether hedging is used and how premiums are invested. This is a potentially troubling double whammy. Given the risks that have become apparent with segregated fund guarantees, OSFI expects companies to fully analyze this business and take necessary steps to manage the associated risk. Steps should include things such as changes to product features, slowing growth in the product line, making sure that valuation assumptions are consistent with the intent of capital rules (to hold capital for unexpected events), and hedging or other types of risk mitigation, including reinsurance. Governance As in banking, governance and risk management of life companies is extremely important, and companies must constantly be assessing how well situated they are, and where their weaknesses exist. The global banking industry has acknowledged that CROs should have been more front-and-centre at their firms. As a result of the global financial turmoil, most banks have made changes to ensure that CROs now report directly to the CEO. The status and visibility of CROs within a firm is important both with the CEO and the board. Many life companies are following suit and this is a development that I encourage. The global banking industry has also agreed that banks must do a much better job of defining their risk appetite, and that boards must be much more involved in approving and monitoring compliance with that risk appetite. The same holds true for the insurance industry. Boards and the senior management of life companies have a long history of stress testing, or Dynamic Capital Adequacy Testing (DCATs) as you call it in the life industry. The Basel Committee recently issued principles for sound stress 5

7 testing that are focused on risk management. The principles include new concepts such as reverse stress testing. In this regard, as noted by the Basel Committee, stress tests should feature a range of severities, including events capable of generating the most damage whether through size of loss or through loss of reputation. A stress testing program should also determine what scenarios could challenge the viability of the bank and thereby uncover hidden risks and interactions among risks. For an integrated regulator like OSFI, these banking principles are not only important for the banks; they are just as relevant for life insurance companies. In a recent speech on the topic of governance, I suggested that institutions should consider adding risk management expertise to their boards, as well as insurance expertise. As boards change, your role as CROs will change. Having people who truly understand risk management on the board will likely lead to deeper board discussions, which is never a bad thing. Some months ago I read an article in which Nouriel Roubini the bear of bears commented that it might be a good idea for boards or senior management to include a financial historian. The value of financial history has probably been under-estimated over the years. Indeed, whenever I hear people say that the events of the past few years were unprecedented and no one really thought they could happen, I think of the financial historians who point out that the same events have happened in the past. Stock markets have plummeted, banking systems have collapsed, and you do not need to go back as far as 1929 to see this. As CROs you might think about adding such expertise to your team, or having access to such expertise. Conclusion My main messages today are: As CROs you have an incredibly important role to play, and a difficult role. Seminars like these are designed to assist you in that role and we hope you will consider it time well spent. Capital is critical. It is important to understand capital drivers, as well as to focus on whether capital is representative of the risk. Companies must constantly be focused on how well situated they are. Defining your risk appetite, and expanding your scenario testing, are extremely important. 6

8 Pay attention to your segregated fund guarantees. The more nondiversifiable risk a life company holds, the more attention it needs to pay to risk management and capital. Thank you. 7

Cambridge, Ontario Thursday, November 13, 2008 CHECK AGAINST DELIVERY. For additional information contact:

Cambridge, Ontario Thursday, November 13, 2008 CHECK AGAINST DELIVERY. For additional information contact: Remarks by Superintendent Julie Dickson Office of the Superintendent of Financial Institutions Canada (OSFI) to the Northwind Professional Institute 2008 Life Insurance Invitational Forum Cambridge, Ontario

More information

A Canadian Perspective on the Global Insurance Industry

A Canadian Perspective on the Global Insurance Industry A Canadian Perspective on the Global Insurance Industry Remarks by Superintendent Julie Dickson Office of the Superintendent of Financial Institutions Canada (OSFI) to the International Insurance Society

More information

Challenges in the Life Insurance Industry

Challenges in the Life Insurance Industry Challenges in the Life Insurance Industry Remarks by Superintendent Julie Dickson Office of the Superintendent of Financial Institutions Canada (OSFI) to the 2010 Life Insurance Invitational Forum Cambridge,

More information

Cambridge, Ontario June 1, 2011 CHECK AGAINST DELIVERY. For additional information contact:

Cambridge, Ontario June 1, 2011 CHECK AGAINST DELIVERY. For additional information contact: Remarks by Superintendent Julie Dickson Office of the Superintendent of Financial Institutions Canada (OSFI) to the 2011 Property and Casualty Insurance Industry Forum Cambridge, Ontario June 1, 2011 CHECK

More information

Guidance for the Development of a Models-Based Solvency Framework for Canadian Life Insurance Companies

Guidance for the Development of a Models-Based Solvency Framework for Canadian Life Insurance Companies Guidance for the Development of a Models-Based Solvency Framework for Canadian Life Insurance Companies January 2010 Background The MCCSR Advisory Committee was established to develop proposals for a new

More information

ORSA for Insurers A Global Concept

ORSA for Insurers A Global Concept ORSA for Insurers A Global Concept Stuart Wason, FSA, FCIA, MAAA, CERA Senior Director, Actuarial Division Office of the Superintendent of Financial Institutions Canada (OSFI) Table of Contents Early developments

More information

Preparing for ORSA - Some practical issues

Preparing for ORSA - Some practical issues 2013 Seminar for the Appointed Actuary Colloque pour l actuaire désigné 2013 Session 13 (P&C): Preparing for ORSA - Some practical issues Speaker: Jean-Marc Léveillé Vice-president Corporate Actuarial,

More information

SAVINGS PRODUCTS AND THE LIFE INSURANCE INDUSTRY IN CANADA

SAVINGS PRODUCTS AND THE LIFE INSURANCE INDUSTRY IN CANADA SAVINGS PRODUCTS AND THE LIFE INSURANCE INDUSTRY IN CANADA Carl Hiralal 25 November 2004 1 Topics OSFI s Role Canadian Industry Insurance Products in Canada Insurance versus Savings Segregated Funds Universal

More information

A New Chapter in Life Insurance Capital Requirements

A New Chapter in Life Insurance Capital Requirements A New Chapter in Life Insurance Capital Requirements Remarks by Mark Zelmer Deputy Superintendent Office of the Superintendent of Financial Institutions Canada (OSFI) to the CFA Society Toronto Toronto,

More information

Guideline. Category: Sound Business and Financial Practices. No: E-18 Date: December 2009

Guideline. Category: Sound Business and Financial Practices. No: E-18 Date: December 2009 Guideline Subject: Category: Sound Business and Financial Practices No: E-18 Date: December 2009 Stress testing is an important tool for senior management to use in making business strategy, risk management

More information

OSFI Updates Guidance on Regulatory Compliance Management. By Carol Lyons and Jared Grossman

OSFI Updates Guidance on Regulatory Compliance Management. By Carol Lyons and Jared Grossman Introduction OSFI Updates Guidance on Regulatory Compliance Management By Carol Lyons and Jared Grossman More than 10 years have passed since OSFI 1 first issued Guideline E-13 entitled Legislative Compliance

More information

Solvency Management in Life Insurance The company s perspective

Solvency Management in Life Insurance The company s perspective Group Risk IAA Seminar 19 April 2007, Mexico City Uncertainty Exposure Solvency Management in Life Insurance The company s perspective Agenda 1. Key elements of Allianz Risk Management framework 2. Drawbacks

More information

STRESS TESTING GUIDELINE

STRESS TESTING GUIDELINE STRESS TESTING GUIDELINE JUIN 2012 Table of Contents Preamble... 2 Introduction... 3 Scope... 5 Coming into effect and updating... 6 1. Stress testing... 7 A. Concept... 7 B. Approaches underlying stress

More information

What Is the Funding Status of Corporate Defined-Benefit Pension Plans in Canada?

What Is the Funding Status of Corporate Defined-Benefit Pension Plans in Canada? Financial System Review What Is the Funding Status of Corporate Defined-Benefit Pension Plans in Canada? Jim Armstrong Chart 1 Participation in Pension Plans Number of Plans Number of Members Thousands

More information

Basel II, Pillar 3 Disclosure for Sun Life Financial Trust Inc.

Basel II, Pillar 3 Disclosure for Sun Life Financial Trust Inc. Basel II, Pillar 3 Disclosure for Sun Life Financial Trust Inc. Introduction Basel II is an international framework on capital that applies to deposit taking institutions in many countries, including Canada.

More information

1.0 Purpose. Financial Services Commission of Ontario Commission des services financiers de l Ontario. Investment Guidance Notes

1.0 Purpose. Financial Services Commission of Ontario Commission des services financiers de l Ontario. Investment Guidance Notes Financial Services Commission of Ontario Commission des services financiers de l Ontario SECTION: INDEX NO.: TITLE: APPROVED BY: Investment Guidance Notes IGN-002 Prudent Investment Practices for Derivatives

More information

BASEL III PILLAR 3 DISCLOSURES. March 31, 2014

BASEL III PILLAR 3 DISCLOSURES. March 31, 2014 BASEL III PILLAR 3 DISCLOSURES Table of Contents 2 Table 1. Scope of application HomEquity Bank (the Bank) is a federally regulated Schedule I bank, incorporated and domiciled in Canada. The Bank s main

More information

STATEMENT OF INVESTMENT POLICIES AND PROCEDURES. Board-Approved Policy

STATEMENT OF INVESTMENT POLICIES AND PROCEDURES. Board-Approved Policy STATEMENT OF INVESTMENT POLICIES AND PROCEDURES Board-Approved Policy Effective date: November 26, 2015 Next review date: November 2016 Table of Contents 1. Purpose of the Statement of Investment of Investment

More information

Deriving Value from ORSA. Board Perspective

Deriving Value from ORSA. Board Perspective Deriving Value from ORSA Board Perspective April 2015 1 This paper has been produced by the Joint Own Risk Solvency Assessment (ORSA) Subcommittee of the Insurance Regulation Committee and the Enterprise

More information

www.pwc.com/us/insurance The role and function of insurance company board of directors risk committees

www.pwc.com/us/insurance The role and function of insurance company board of directors risk committees www.pwc.com/us/insurance The role and function of insurance company board of directors risk committees Table of contents The role and function of insurance company board of directors risk committees 2

More information

Remarks by Superintendent Jeremy Rudin to the 2015 Property and Casualty Insurance Industry Forum Cambridge, Ontario June 4, 2015

Remarks by Superintendent Jeremy Rudin to the 2015 Property and Casualty Insurance Industry Forum Cambridge, Ontario June 4, 2015 Remarks by Superintendent Jeremy Rudin to the 2015 Property and Casualty Insurance Industry Forum Cambridge, Ontario June 4, 2015 CHECK AGAINST DELIVERY For additional information contact: Brock Kruger

More information

Information. Canada s Life and Health Insurers. Canada s Financial Services Sector. Overview

Information. Canada s Life and Health Insurers. Canada s Financial Services Sector. Overview Information Canada s Life and Health Insurers Canada s Financial Services Sector September 2002 Overview Canada s life and health insurance industry comprises 120 firms, down from 163 companies in 1990,

More information

Rating Methodology for Domestic Life Insurance Companies

Rating Methodology for Domestic Life Insurance Companies Rating Methodology for Domestic Life Insurance Companies Introduction ICRA Lanka s Claim Paying Ability Ratings (CPRs) are opinions on the ability of life insurance companies to pay claims and policyholder

More information

Solvency Assessment and Management: Pillar II Sub Committee Governance Task Group Discussion Document 81 (v 3)

Solvency Assessment and Management: Pillar II Sub Committee Governance Task Group Discussion Document 81 (v 3) Solvency Assessment and Management: Pillar II Sub Committee Governance Task Group Discussion Document 81 (v 3) Governance, Risk Management, and Internal Controls INTERIM REQUIREMENTS CONTENTS 1. INTRODUCTION

More information

Discours de. Madame Danielle Boulet. Surintendante de l encadrement de la solvabilité. Autorité des marchés financiers

Discours de. Madame Danielle Boulet. Surintendante de l encadrement de la solvabilité. Autorité des marchés financiers Discours de Madame Danielle Boulet Surintendante de l encadrement de la solvabilité Autorité des marchés financiers At the Canadian association of Financial Institutions in Insurance ( CAFII ) BOARD OF

More information

Economical Insurance reports financial results for Second Quarter and Year-todate

Economical Insurance reports financial results for Second Quarter and Year-todate NEWS RELEASE Economical Insurance reports financial results for Second Quarter and Year-todate 2015 Increased gross written premiums by 3.0% over second quarter 2014 Recorded a combined ratio of 95.9%

More information

Capital Regime for Regulated Insurance Holding Companies and Non-Operating Life Companies

Capital Regime for Regulated Insurance Holding Companies and Non-Operating Life Companies Guideline Subject: Capital Regime for Regulated Insurance Holding Companies and Non-Operating Life Companies Category: Capital No: A-2 Date: July 2005 Introduction This Guideline sets out the capital framework

More information

Financial stability, systemic risk & macroprudential supervision: an actuarial perspective

Financial stability, systemic risk & macroprudential supervision: an actuarial perspective Financial stability, systemic risk & macroprudential supervision: an actuarial perspective Paul Thornton International Actuarial Association Presentation to OECD Insurance and Pensions Committee June 2010

More information

1 Introduction. 1.1 Three pillar approach

1 Introduction. 1.1 Three pillar approach 1 Introduction 1.1 Three pillar approach The recent years have shown that (financial) companies need to have a good management, a good business strategy, a good financial strength and a sound risk management

More information

Scenario Analysis Principles and Practices in the Insurance Industry

Scenario Analysis Principles and Practices in the Insurance Industry North American CRO Council Scenario Analysis Principles and Practices in the Insurance Industry 2013 North American CRO Council Incorporated chairperson@crocouncil.org December 2013 Acknowledgement The

More information

OWN RISK AND SOLVENCY ASSESSMENT AND ENTERPRISE RISK MANAGEMENT

OWN RISK AND SOLVENCY ASSESSMENT AND ENTERPRISE RISK MANAGEMENT OWN RISK AND SOLVENCY ASSESSMENT AND ENTERPRISE RISK MANAGEMENT ERM as the foundation for regulatory compliance and strategic business decision making CONTENTS Introduction... 3 Steps to developing an

More information

Basel Committee on Banking Supervision. The Joint Forum RISK MANAGEMENT PRACTICES AND REGULATORY CAPITAL CROSS-SECTORAL COMPARISON

Basel Committee on Banking Supervision. The Joint Forum RISK MANAGEMENT PRACTICES AND REGULATORY CAPITAL CROSS-SECTORAL COMPARISON Basel Committee on Banking Supervision The Joint Forum RISK MANAGEMENT PRACTICES AND REGULATORY CAPITAL CROSS-SECTORAL COMPARISON November 2001 THE JOINT FORUM BASEL COMMITTEE ON BANKING SUPERVISION INTERNATIONAL

More information

COMPUTERSHARE TRUST COMPANY OF CANADA BASEL III PILLAR 3 DISCLOSURES

COMPUTERSHARE TRUST COMPANY OF CANADA BASEL III PILLAR 3 DISCLOSURES COMPUTERSHARE TRUST COMPANY OF CANADA BASEL III PILLAR 3 DISCLOSURES December 31, 2013 Table of Contents Scope of Application... 3 Capital Structure... 3 Capital Adequacy... 3 Credit Risk... 4 Market Risk...

More information

Inter-Segment Notes for Life Insurance Companies. Sound Business and Financial Practices

Inter-Segment Notes for Life Insurance Companies. Sound Business and Financial Practices Guideline Subject: Category: for Life Insurance Companies Sound Business and Financial Practices No: E-12 Date: June 2000 Revised: July 2010 Introduction This guideline establishes OSFI s expectations

More information

Principles for An. Effective Risk Appetite Framework

Principles for An. Effective Risk Appetite Framework Principles for An Effective Risk Appetite Framework 18 November 2013 Table of Contents Page I. Introduction... 1 II. Key definitions... 2 III. Principles... 3 1. Risk appetite framework... 3 1.1 An effective

More information

Three Investment Risks

Three Investment Risks Three Investment Risks Just ask yourself, which of the following risks is the most important risk to you. Then, which order would you place them in terms of importance. A. A significant and prolonged fall

More information

SCHEDULE TO INSURANCE GROUP SUPERVISION AMENDMENT RULES 2015 SCHEDULE 3 (Paragraph 30) SCHEDULE OF FINANCIAL CONDITION REPORT OF INSURANCE GROUP [blank] name of Parent The schedule of Financial Condition

More information

1. INTRODUCTION AND PURPOSE

1. INTRODUCTION AND PURPOSE Solvency Assessment and Management: Pillar 1 - Sub Committee Capital Requirements Task Group Discussion Document 73 (v 2) Treatment of new business in SCR EXECUTIVE SUMMARY As for the Solvency II Framework

More information

Pension Buyout Reality Check How Actuarial Assumptions Cloud Perceptions of Annuity Buyout Pricing

Pension Buyout Reality Check How Actuarial Assumptions Cloud Perceptions of Annuity Buyout Pricing How Actuarial Assumptions Cloud Perceptions of Annuity Buyout Pricing Recent annuity purchases highlight the need to examine what drives their pricing. Plan sponsor announcements that allude to par settlements

More information

Risk Concentrations Principles

Risk Concentrations Principles Risk Concentrations Principles THE JOINT FORUM BASEL COMMITTEE ON BANKING SUPERVISION INTERNATIONAL ORGANIZATION OF SECURITIES COMMISSIONS INTERNATIONAL ASSOCIATION OF INSURANCE SUPERVISORS Basel December

More information

Controls and accounting policies

Controls and accounting policies Controls and accounting policies Controls and procedures Management s responsibility for financial information contained in this Annual Report is described on page 92. In addition, the Bank s Audit and

More information

INCORPORATING AN INSURANCE COMPANY AND OBTAINING A BUSINESS AUTHORIZATION IN BRITISH COLUMBIA

INCORPORATING AN INSURANCE COMPANY AND OBTAINING A BUSINESS AUTHORIZATION IN BRITISH COLUMBIA INFORMATION BULLETIN BULLETIN NUMBER: TITLE: LEGISLATION: INS-06-005 INCORPORATING AN INSURANCE COMPANY AND OBTAINING A BUSINESS AUTHORIZATION IN BRITISH COLUMBIA THE FINANCIAL INSTITUTIONS ACT AND REGULATIONS

More information

Solvency II Update. Nick Dexter. 24 November 2011

Solvency II Update. Nick Dexter. 24 November 2011 Solvency II Update Nick Dexter 24 November 2011 Agenda Solvency II Overview Current Status of Solvency II Own Risk and Solvency Assessment Solvency II v Canadian regime 2 Solvency II Overview Solvency

More information

Guideline. Large Exposure Limits. Category: Prudential Limits and Restrictions. No: B-2 Date: August 2003. I. Introduction

Guideline. Large Exposure Limits. Category: Prudential Limits and Restrictions. No: B-2 Date: August 2003. I. Introduction Canada Bureau du surintendant des institutions financières Canada 255 Albert Street 255, rue Albert Ottawa, Canada Ottawa, Canada K1A 0H2 K1A 0H2 www.osfi-bsif.gc.ca Guideline Subject: Category: Prudential

More information

Legislation-in-Brief The Standard Valuation Law and Principle-based Reserves

Legislation-in-Brief The Standard Valuation Law and Principle-based Reserves 1 Legislation-in-Brief The Standard Valuation Law and Principle-based Reserves The American Academy of Actuaries is an 18,000+ member professional association whose mission is to serve the public and the

More information

COMMISSION DELEGATED DECISION (EU) / of 5.6.2015

COMMISSION DELEGATED DECISION (EU) / of 5.6.2015 EUROPEAN COMMISSION Brussels, 5.6.2015 C(2015) 3740 final COMMISSION DELEGATED DECISION (EU) / of 5.6.2015 on the provisional equivalence of the solvency regimes in force in Australia, Bermuda, Brazil,

More information

Dealing with Predictable Irrationality. Actuarial Ideas to Strengthen Global Financial Risk Management. At a macro or systemic level:

Dealing with Predictable Irrationality. Actuarial Ideas to Strengthen Global Financial Risk Management. At a macro or systemic level: Actuarial Ideas to Strengthen Global Financial Risk Management The recent developments in global financial markets have raised serious questions about the management and oversight of the financial services

More information

Implementation of Solvency II: The dos and the don ts

Implementation of Solvency II: The dos and the don ts KEYNOTE SPEECH Gabriel Bernardino Chairman of EIOPA Implementation of Solvency II: The dos and the don ts International conference Solvency II: What Can Go Wrong? Ljubljana, 2 September 2015 Page 2 of

More information

Genworth MI Canada Inc. BRIAN HURLEY, Chairman and CEO

Genworth MI Canada Inc. BRIAN HURLEY, Chairman and CEO Genworth MI Canada Inc. BRIAN HURLEY, Chairman and CEO Genworth MI Canada Inc. 1 Scotia Capital Financial Summit September 2012 Forward-Looking and Non-IFRSs Statements This presentation includes certain

More information

Guidance Note: Stress Testing Class 2 Credit Unions. November, 2013. Ce document est également disponible en français

Guidance Note: Stress Testing Class 2 Credit Unions. November, 2013. Ce document est également disponible en français Guidance Note: Stress Testing Class 2 Credit Unions November, 2013 Ce document est également disponible en français This Guidance Note is for use by all Class 2 credit unions with assets in excess of $1

More information

Session 23 - Lessons from NB s Shared Risk Plans: Updates and a Consulting Perspective

Session 23 - Lessons from NB s Shared Risk Plans: Updates and a Consulting Perspective Session 23 - Lessons from NB s Shared Risk Plans: Updates and a Consulting Perspective Angela Mazerolle Superintendent of Pensions, FCNB Paul T. Lai Fatt, FSA, FCIA Partner, Morneau Shepell Disclaimer

More information

ICP 1: Conditions for Effective Insurance Supervision

ICP 1: Conditions for Effective Insurance Supervision A Core Curriculum for Insurance Supervisors ICP 1: Conditions for Effective Insurance Supervision Teaching Note Copyright 2006 International Association of Insurance Supervisors (IAIS). All rights reserved.

More information

Practice Education Course Individual Life and Annuities Exam June 2014 TABLE OF CONTENTS

Practice Education Course Individual Life and Annuities Exam June 2014 TABLE OF CONTENTS Practice Education Course Individual Life and Annuities Exam June 2014 TABLE OF CONTENTS THIS EXAM CONSISTS OF EIGHT (8) WRITTEN ANSWER QUESTIONS WORTH 57 POINTS AND FIVE (5) MULTIPLE CHOICE QUESTIONS

More information

S t a n d a r d 4. 4 c. M a n a g e m e n t o f m a r k e t r i s k. Regulations and guidelines

S t a n d a r d 4. 4 c. M a n a g e m e n t o f m a r k e t r i s k. Regulations and guidelines S t a n d a r d 4. 4 c M a n a g e m e n t o f m a r k e t r i s k Regulations and guidelines H o w t o r e a d a s t a n d a r d A standard is a collection of subject-specific regulations and guidelines

More information

Remarks by. Carolyn G. DuChene Deputy Comptroller Operational Risk. at the

Remarks by. Carolyn G. DuChene Deputy Comptroller Operational Risk. at the Remarks by Carolyn G. DuChene Deputy Comptroller Operational Risk at the Bank Safety and Soundness Advisor Community Bank Enterprise Risk Management Seminar Washington, D.C. October 22, 2012 Good afternoon,

More information

London Life Insurance Company ANNUAL REPORT

London Life Insurance Company ANNUAL REPORT London Life Insurance Company 2007 ANNUAL REPORT CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION This report contains some forward-looking statements about the Company, including its business operations,

More information

Loi M Bakani: Effective compliance, risk mitigation and control

Loi M Bakani: Effective compliance, risk mitigation and control Loi M Bakani: Effective compliance, risk mitigation and control Speech by Mr Loi M Bakani, Governor of the Bank of Papua New Guinea, at the Institute of Banking and Business Management (IBBM) seminar on

More information

Canadian Insurance Industry Risks & Opportunities

Canadian Insurance Industry Risks & Opportunities Canadian Insurance Industry Risks & Opportunities Survey May 2014 kpmg.ca 2 Canadian Insurance Industry Risks & Opportunities Survey May 2014 We are pleased to release the results of our first annual Canadian

More information

Risk Management. Did you know? What is Risk Management?

Risk Management. Did you know? What is Risk Management? Risk Did you know? Financial services organizations help people buy houses, build businesses and protect their families financially. Banks, insurance companies, asset managers, pension administrators and

More information

Risk-Based Capital. Overview

Risk-Based Capital. Overview Risk-Based Capital Definition: Risk-based capital (RBC) represents an amount of capital based on an assessment of risks that a company should hold to protect customers against adverse developments. Overview

More information

CANADIAN TIRE BANK. BASEL PILLAR 3 DISCLOSURES December 31, 2014 (unaudited)

CANADIAN TIRE BANK. BASEL PILLAR 3 DISCLOSURES December 31, 2014 (unaudited) (unaudited) 1. SCOPE OF APPLICATION Basis of preparation This document represents the Basel Pillar 3 disclosures for Canadian Tire Bank ( the Bank ) and is unaudited. The Basel Pillar 3 disclosures included

More information

Monetary Authority of Singapore BOARD AND SENIOR MANAGEMENT

Monetary Authority of Singapore BOARD AND SENIOR MANAGEMENT Monetary Authority of Singapore BOARD AND SENIOR MANAGEMENT March 2013 Table of Contents 1 Introduction 1 1.1 Overview 1 1.2 Board Matters 2 1.3 Matters Relating to Senior Management 4 1.4 Reporting to

More information

Guideline. Commercial Lending Criteria. No: E-2 Date: June 1992

Guideline. Commercial Lending Criteria. No: E-2 Date: June 1992 Canada Bureau du surintendant des institutions financières Canada 255 Albert Street 255, rue Albert Ottawa, Canada Ottawa, Canada K1A 0H2 K1A 0H2 Guideline Subject: No: E-2 Date: June 1992 This guideline

More information

Alex Beath and Jody MacIntosh

Alex Beath and Jody MacIntosh Rotman International Journal of Pension Management Volume 6 Issue 1 Spring 2013 Risk-Management Practices at Large Pension Plans: Findings from a Unique 27-Fund Survey Alex Beath and Jody MacIntosh Alex

More information

Implementing Risk Based Supervision in Pensions and Insurance in Emerging Markets. Michael Cohen Ottawa, Canada

Implementing Risk Based Supervision in Pensions and Insurance in Emerging Markets. Michael Cohen Ottawa, Canada Implementing Risk Based Supervision in Pensions and Insurance in Emerging Markets Michael Cohen Ottawa, Canada AGENDA What is Risk Based Supervision? Industry specific issues Pre-requisites for RBS Challenges

More information

Internal Audit and supervisory expectations building on progress

Internal Audit and supervisory expectations building on progress 1 Internal Audit and supervisory expectations building on progress Speech given by Sasha Mills, Director, Cross Cutting Policy, Bank of England Ernst & Young, London 3 February 2016 2 Introductions Hello,

More information

GUIDELINES ON RISK MANAGEMENT AND INTERNAL CONTROLS FOR INSURANCE AND REINSURANCE COMPANIES

GUIDELINES ON RISK MANAGEMENT AND INTERNAL CONTROLS FOR INSURANCE AND REINSURANCE COMPANIES 20 th February, 2013 To Insurance Companies Reinsurance Companies GUIDELINES ON RISK MANAGEMENT AND INTERNAL CONTROLS FOR INSURANCE AND REINSURANCE COMPANIES These guidelines on Risk Management and Internal

More information

Frequently Asked Questions Q3 2007

Frequently Asked Questions Q3 2007 Frequently Asked Questions Q3 2007 1. Can you comment on the performance of CIBC Retail Markets during the quarter? CIBC Retail Markets reported net income for the third quarter of $555 million, up 14%

More information

Discussion paper on the impact on the volatility of own funds of the revised IAS 19

Discussion paper on the impact on the volatility of own funds of the revised IAS 19 POSITION PAPER Our reference: 2014/00028 Your reference: EBA/DP/2014/01 1 (10) 11/04/2014 European Banking Authority Discussion paper on the impact on the volatility of own funds of the revised IAS 19

More information

CONSULTATION PAPER P016-2006 October 2006. Proposed Regulatory Framework on Mortgage Insurance Business

CONSULTATION PAPER P016-2006 October 2006. Proposed Regulatory Framework on Mortgage Insurance Business CONSULTATION PAPER P016-2006 October 2006 Proposed Regulatory Framework on Mortgage Insurance Business PREFACE 1 Mortgage insurance protects residential mortgage lenders against losses on mortgage loans

More information

INSURANCE. Life Insurance. as an. Asset Class

INSURANCE. Life Insurance. as an. Asset Class INSURANCE Life Insurance as an Asset Class 16 FORUM JUNE / JULY 2013 Permanent life insurance has always been an exceptional estate planning tool, but as Wayne Miller and Sally Murdock report, it has additional

More information

APEC Policy Dialogue on Deposit Insurance: Trigger Mechanisms for Early Intervention

APEC Policy Dialogue on Deposit Insurance: Trigger Mechanisms for Early Intervention APEC Policy Dialogue on Deposit Insurance: Trigger Mechanisms for Early Intervention Kuala Lumpur February 16-18, 2004 Jay Carfagnini Goodmans LLP jcarfagnini@goodmans.ca 250 Yonge Street, Suite 2400 Toronto,

More information

Economical Insurance reports financial results for First Quarter 2015

Economical Insurance reports financial results for First Quarter 2015 NEWS RELEASE Economical Insurance reports financial results for First Quarter 2015 Increased gross written premiums by 2.0% over first quarter 2014 Recorded a combined ratio of 105.7% for the quarter Generated

More information

State of the Industry

State of the Industry Attorney Advertising Prior results do not guarantee a similar outcome Models used are not clients but may be representative of clients 321 N. Clark Street, Suite 28, Chicago, IL 6654 312.832.45 State of

More information

June 2008 Supplement to Characteristics and Risks of Standardized Options

June 2008 Supplement to Characteristics and Risks of Standardized Options June 2008 Supplement to Characteristics and Risks of Standardized Options This supplement supersedes and replaces the April 2008 Supplement to the booklet entitled Characteristics and Risks of Standardized

More information

THE EMPIRE LIFE INSURANCE COMPANY

THE EMPIRE LIFE INSURANCE COMPANY THE EMPIRE LIFE INSURANCE COMPANY Condensed Interim Consolidated Financial Statements For the six months ended June 30, 2013 Unaudited Issue Date: August 9, 2013 These condensed interim consolidated financial

More information

Guideline. Source of Earnings Disclosure (Life Insurance Companies) No: D-9 Date: December 2004 Revised: July 2010

Guideline. Source of Earnings Disclosure (Life Insurance Companies) No: D-9 Date: December 2004 Revised: July 2010 Guideline Subject: Category: (Life Insurance Companies) Accounting No: D-9 Date: December 2004 Revised: July 2010 This Guideline, which applies to life insurance companies and life insurance holding companies

More information

Global Markets Update Signature Global Advisors

Global Markets Update Signature Global Advisors SIGNATURE GLOBAL ADVISORS MARKETS UPDATE AUGUST 3, 2011 The following comments come from an internal interview with Chief Investment Officer, Eric Bushell. They represent Signature s current market views

More information

Regulatory Compliance Management (RCM) (formerly Legislative Compliance Management (LCM))

Regulatory Compliance Management (RCM) (formerly Legislative Compliance Management (LCM)) Guideline Subject: Category: (RCM) (formerly Legislative Compliance Management (LCM)) Sound Business & Financial Practices No: E-13 Date: November 2014 I. Purpose and Scope of the Guideline The purpose

More information

ORSA Implementation Challenges

ORSA Implementation Challenges 1 ORSA Implementation Challenges Christopher Crombie, FSA, FCIA AVP ERM & Financial Risk Management Standard Life Assurance Company of Canada To CIA Annual Meeting June 21, 2013 2 Context Our Own Risk

More information

LIFE INSURANCE CAPITAL FRAMEWORK STANDARD APPROACH

LIFE INSURANCE CAPITAL FRAMEWORK STANDARD APPROACH LIFE INSURANCE CAPITAL FRAMEWORK STANDARD APPROACH Table of Contents Introduction... 2 Process... 2 and Methodology... 3 Core Concepts... 3 Total Asset Requirement... 3 Solvency Buffer... 4 Framework Details...

More information

Supervisory Statement SS43/15 Non-Solvency II insurance companies Capital assessments. November 2015

Supervisory Statement SS43/15 Non-Solvency II insurance companies Capital assessments. November 2015 Supervisory Statement SS43/15 Non-Solvency II insurance companies Capital assessments November 2015 Prudential Regulation Authority 20 Moorgate London EC2R 6DA Prudential Regulation Authority, registered

More information

First Quarter Report January 31, 2015

First Quarter Report January 31, 2015 First Quarter Report January 31, 2015 PWC CAPITAL INC. ANNOUNCES RESULTS FOR ITS FIRST QUARTER ENDED JANUARY 31, 2015 FIRST QUARTER SUMMARY (1) (compared to the same periods in the prior year unless otherwise

More information

Preparing for ORSA - Some practical issues Speaker:

Preparing for ORSA - Some practical issues Speaker: 2013 Seminar for the Appointed Actuary Colloque pour l actuaire désigné 2013 Session 13: Preparing for ORSA - Some practical issues Speaker: André Racine, Principal Eckler Ltd. Context of ORSA Agenda Place

More information

Enterprise Risk Management

Enterprise Risk Management Enterprise Risk Management Illinois State University Actuarial Research Presentation Kevin C. Ahlgrim, A.S.A., M.A.A.A., Ph.D. Department of Finance, Insurance and Law April 27, 2006 Overview The evolution

More information

ZAG BANK BASEL II & III PILLAR 3 DISCLOSURES. December 31, 2014

ZAG BANK BASEL II & III PILLAR 3 DISCLOSURES. December 31, 2014 ZAG BANK BASEL II & III PILLAR 3 DISCLOSURES December 31, 2014 Zag Bank (the Bank ) is required to make certain disclosures to meet the requirements of the Office of the Superintendent of Financial Institutions

More information

The Independent Order of Foresters Year ended December 31, 2015. financial highlights

The Independent Order of Foresters Year ended December 31, 2015. financial highlights The Independent Order of Foresters Year ended December 31, financial highlights financial highlights Financial highlights for the year ended December 31, (All amounts are in Canadian dollars, unless otherwise

More information

Guidelines on Investment in Shares, Interest-in-Shares and Collective Investment Schemes

Guidelines on Investment in Shares, Interest-in-Shares and Collective Investment Schemes Interest-in-Shares and Collective BNM/RH/GL 001-30 Prudential Financial Policy Department PART A INTRODUCTION AND OVERVIEW... 1 1. Overview of the Guidelines... 1 2. Definitions... 1 3. Legal Enforceability

More information

APRA S FIT AND PROPER REQUIREMENTS

APRA S FIT AND PROPER REQUIREMENTS APRA S FIT AND PROPER REQUIREMENTS Consultation Paper Australian Prudential Regulation Authority PREAMBLE APRA was created out of the Government s financial sector reforms that were implemented as a result

More information

Managing your surplus cash

Managing your surplus cash Managing your surplus cash Savings and investments BusinESS Coach series Establishing a plan Putting your plan to work Thinking long term Business Coach series Your money should work as hard as you do

More information

Appointed Actuary: Legal Requirements, Qualifications and Peer Review. Sound Business and Financial Practices

Appointed Actuary: Legal Requirements, Qualifications and Peer Review. Sound Business and Financial Practices Guideline Subject: Category: Qualifications and Peer Review Sound Business and Financial Practices No: E-15 Date: August 2003 Revised: November 2006 Revised: Introduction This Guideline describes the role

More information

THE EMPIRE LIFE INSURANCE COMPANY

THE EMPIRE LIFE INSURANCE COMPANY THE EMPIRE LIFE INSURANCE COMPANY Condensed Interim Consolidated Financial Statements For the nine months ended September 30, 2013 Unaudited Issue Date: November 6, 2013 These condensed interim consolidated

More information

Manulife Investor Day 2015 Delivering Results and Preparing for the Future

Manulife Investor Day 2015 Delivering Results and Preparing for the Future C$ unless otherwise stated TSX/NYSE/PSE: MFC SEHK:945 Manulife Investor Day 2015 Delivering Results and Preparing for the Future New supplemental disclosures introduced to reflect Manulife s strategic

More information

Kansas City 4Life Insurance Company

Kansas City 4Life Insurance Company Kansas City 4Life Insurance Company 2009 Fourth Quarter Report Includes our subsidiaries: Sunset Life Insurance Company of America Old American Insurance Company Sunset Financial Services, Inc. Post Office

More information

Pro-cyclicality, current trends, issues and priorities for insurance mutuals.

Pro-cyclicality, current trends, issues and priorities for insurance mutuals. 1 Pro-cyclicality, current trends, issues and priorities for insurance mutuals. Giles Fairhead Head 2 Agenda Pro-cyclicality of insurers PRA perspective on Current Trends and Issues Regulatory Priorities

More information

Supervisor of Banks: Proper Conduct of Banking Business [9] (4/13) Sound Credit Risk Assessment and Valuation for Loans Page 314-1

Supervisor of Banks: Proper Conduct of Banking Business [9] (4/13) Sound Credit Risk Assessment and Valuation for Loans Page 314-1 Sound Credit Risk Assessment and Valuation for Loans Page 314-1 SOUND CREDIT RISK ASSESSMENT AND VALUATION FOR LOANS Principles for sound credit risk assessment and valuation for loans: 1. A banking corporation

More information

Guide to Intervention for Federally Regulated Life Insurance Companies

Guide to Intervention for Federally Regulated Life Insurance Companies The Intervention Process Guide to Intervention for Federally Regulated Life Insurance Companies The objective of the intervention process is to enable OSFI to identify areas of concern at an early stage

More information

Society of Actuaries in Ireland

Society of Actuaries in Ireland Society of Actuaries in Ireland Information and Assistance Note LA-1: Actuaries involved in the Own Risk & Solvency Assessment (ORSA) under Solvency II Life Assurance and Life Reinsurance Business Issued

More information

Insurance Guidance Note No. 14 System of Governance - Insurance Transition to Governance Requirements established under the Solvency II Directive

Insurance Guidance Note No. 14 System of Governance - Insurance Transition to Governance Requirements established under the Solvency II Directive Insurance Guidance Note No. 14 Transition to Governance Requirements established under the Solvency II Directive Date of Paper : 31 December 2013 Version Number : V1.00 Table of Contents General governance

More information

CONSOLIDATED FINANCIAL STATEMENTS. For the year 2008 CANADA LIFE FINANCIAL CORPORATION

CONSOLIDATED FINANCIAL STATEMENTS. For the year 2008 CANADA LIFE FINANCIAL CORPORATION CONSOLIDATED FINANCIAL STATEMENTS For the year 2008 CANADA LIFE FINANCIAL CORPORATION FINANCIAL HIGHLIGHTS (in $ millions except per share amounts) % Change For the years ended December 31 Premiums and

More information