January 5, 2011 by Canadian Underwriter
The Office of the Superintendent of Financial Institutions (OSFI) has posted its final B-3 Guideline on Sound Reinsurance Practices and Procedures, which spells out four principles that should be incorporated into an insurer’s overall reinsurance risk management policy.
OSFI expects insurance company boards of directors to follow the first principle, which is to approve a reinsurance risk management policy (RRMP), by July 1, 2011.
The RRMP is to include the roles and responsibilities of the positions charged with implementing the RRMP, the process for updating the RRMP and the insurer’s policy on the use of registered and unregistered reinsurance.
Once the RRMP is approved, the company is expected to comply with the remaining three principles of Guideline B-3 by July 1, 2012.
The remaining principles include:
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