April 9, 2013 by Canadian Underwriter
The Office of the Superintendent of Financial Services (OSFI) has set out its priorities for this year and through to 2016, touching on the low interest rate environment and monitoring insurance reforms in other jurisdictions.
In its Plans and Priorities 2013-2016 document, released April 2, the regulator said that the impact of low interest rates and high household debt levels are among the largest economic challenges in Canada.
“OSFI’s long-term priority remains focused on anticipating and addressing risks emanating from
the economy and the financial system,” Julie Dickson, OSFI’s superintendent wrote in a public letter accompanying the priorities document.
“We will be paying particular attention to the implementation of banking and pension-related reforms as well as the effects from changing international accounting and auditing standards,” Dickson added.
This year, OSFI will also participate in a detailed assessment under the International Monetary Fund’s (IMF) Financial Sector Assessment Program, she noted.
OSFI said it will continue to implement the plans it set out in its review of the life insurance sector last year, as well as monitor the implementation of insurance reforms in other jurisdictions.
In the time period set out in the document, OSFI also said it expects to see the “implementation of more risk sensitive capital rules for property and casualty insurers.”
OSFI also noted that internally, it needs to attract and retain certain skilled employees whose skills are in demand in the financial sector. The regulator has also undertaken a “multi-year information technology renewal initiative” to address its IT infrastructure, the document notes.
OSFI will also increase its resources in operational risk so it can conduct more reviews of federally-regulated financial institutions, the document says.
Those reviews will particularly focus on technology risk (with an emphasis on cyber security), quality of data systems and overall management of operational risk, the document notes.
The full priorities document with OSFI’s plans and expectations is available on its website.