June 16, 2011 by Canadian Underwriter
The Office of the Superintendent of Financial Institutions (OSFI) has decided to postpone implementation of the audit requirement for the MCT/BAAT by one year.
As first introduced in the 2011 Minimum Capital Test (MCT) and the Branch Adequacy of Assets Test (BAAT) guidelines issued in December 2010, OSFI required an annual audit of the MCT/BAAT for fiscal year-ends beginning on or after Jan. 1, 2011.
A working group had been established between OSFI, the Insurance Bureau of Canada (IBC) and the audit community to clarify key areas of the guidelines and ease implementation of the audit requirement.
“As a result of some of the comments received from the MCT audit working group and other industry representatives, P&C insurance companies are no longer required to file an audit opinion on the 2011 MCT/BAAT,” OSFI announced in a statement. “However, for fiscal year-ends beginning on or after Jan. 1, 2012, P&C insurance companies will be required to file an annual audit of the MCT/BAAT by the filing due date of their financial statements’ annual audit report.
“The MCT/BAAT audit will be required for both the current and prior year figures.”