Both the Office of the Superintendent of Financial Institutions (OSFI) and the Autorité des marchés financiers (AMF) have released finalized capital guidelines for insurance companies, which will be adapted in preparation for the implementation of International Financial Reporting Standards 17 (IFRS 17) - Insurance Contracts on January 01, 2023.
The implementation of IFRS 17 represents a major accounting change for the industry, for increased transparency and comparability of risks across the global market.
The final guidelines were developed following an “extensive, iterative and collaborative consultation” among insurers, stakeholders and other regulators, OSFI said. The agency also noted that Canada’s insurance industry is “generally well-capitalized” under current accounting rules, and it will remain so following IFRS 17’s implementation.
"The guidance released today is the result of the concerted efforts to adapt our guidance to IFRS 17, while ensuring that the requirements are appropriate for the Canadian context,” said OSFI superintendent Peter Routledge. “I would like to thank our colleagues at the Autorité des marchés financiers for their collaboration in developing and implementing consistent capital expectations."
"I applaud the work of all the stakeholders involved, especially on the industry side, for whom the transition to IFRS 17 has been the focus of considerable efforts and investments,” said AMF president and CEO Louis Morisset. “I would also like to thank the Office of the Superintendent of Financial Institutions, which worked closely with us throughout this multi-year project to ensure the implementation today of harmonized and robust capital requirements."
