March 25, 2010
Insurance companies facing liabilities associated with the ongoing challenge to Alberta’s minor injury cap must disclose them—along with provisions—in their upcoming actuarial reports, according to OSFI’s updated memorandum on actuarial reports.
The regulator’s latest bulleting to P&C insurers highlights changes to the memorandum, singling out key provincial issues—including the cap challenge and the incoming Harmonized Sales Tax (HST)—and reminding P&C insurers to include that impact in their Actuarial Reports on Property and Casualty Business. With the Alberta challenge still undecided, insurers must consider both scenarios, according to Stuart Wason, OSFI’s senior director, actuarial division, regulation sector.
“If the cap is ultimately determined to be unconstitutional, the impact may be significant for any insurance company actively writing automobile insurance in Alberta,” Wason’s November 25 memo states. The reports should also include provisions connected to the ongoing constitutional challenge, as well as potential liability if the appeal succeeds.
The memo also singles out upcoming tax changes in Ontario and British Columbia, acknowledging the arrival of the Harmonized Sales Tax (HST) next year, noting that, “all claims paid after July 1, 2010 will be affected by the HST. Since a portion of the unpaid claims at year end 2009 will be paid after July 1, 2010, the actuary should include the impact of the HST on the unpaid claims and the run-off of the unearned premium.”
The full memorandum is available at http://www.osfi-
This story was originally published by Canadian Insurance Top Broker.