OSFI increases involvement with insurers to quarterly meetings

OSFI is moving to meet with insurers on a more frequent, quarterly basis to appraise financial trends and issues related to insurer solvency.
Chubb Canada president and CEO Ellen Moore made the observation at Chubb Canada’s first annual Executive Women’s Forum, held in Toronto on June 3. The forum is designed to further the leadership development of women insurance executives.
OSFI’s more frequent meetings with insurers are not necessarily associated with how compliant the company may already be with OSFI’s requirements, Moore said.
She noted OSFI’s increased involvement in the context of a discussion about companies’ minimum capital test (MCT) scores in 2009.
Barbara Sulzenko-Laurie, vice president of policy at the Insurance Bureau of Canada, said in her presentation to the forum that OSFI had expressed concerns about Canadian insurers’ decreased MCT scores in 2009. She said the MCT scores of six companies were subject to an OSFI “staging process.”
OSFI sets a minimum MCT score requirement of 150%, below which the federal regulator can issue a warning not to do business with that particular company.
Property and casualty insurers establish their own internal minimum MCT scores, which are higher than OSFI’s required minimum. If a company’s internal MCT standard is not met, usually when a score is between 150% and 190%, OSFI will take a closer look at the company’s finances.
Depending upon the gap between the company’s target MCT and the company’s actual level of achievement, OSFI may submit the company to one of four different stages, each representing a different degree of supervision and involvement.
OSFI has indicated to IBC that it anticipated making their staging operations public in the Fall of 2009.
In the meantime, Sulzenko-Laurie said IBC is keeping a close eye on companies’ MCT scores this year. “It’s a worrying picture, but it’s not a disastrous picture,” she said.