June 28, 2001 by Canadian Underwriter
Property and casualty insurers have gained a temporary reprieve from the Office of the Superintendent of Financial Services (OSFI) on implementation of the regulator’s proposed reporting of discounted unpaid claims, according to the Insurance Bureau of Canada (IBC).
The new reporting requirement was supposed to take effect from the beginning of January this year. However, after intense lobbying by the IBC in objection to the proposed reporting requirement, as well as its implementation date, the federal regulator has agreed to delay the deadline through to the end of December 2001. The IBC says that this provides the industry with an additional year to challenge the proposal. OSFI has also extended the timetable for discussion on rulings applying to "disclosure of gains and losses".
The IBC claims that it was first notified by OSFI of its intention to implement discounted financial reporting in the early stages of this year. Essentially, the effective implementation date for the new reporting requirement would have been retrospective, without allowing the industry opportunity to participate in debate concerning the appropriateness of the new rules. The IBC opposes discounting claims reporting on grounds that its implementation would prove costly to insurers, with little benefit gained, while the move would make Canada "an anomaly" in relation to international accounting practices applied to p&c insurers.