Solvency II coming to Canada, increasing need for self-assessment

A capital adequacy model similar to Solvency II will be implemented in Quebec and Canada by 2011-2012, delegates of the National Insurance Conference of Canada in Montreal were told during the regulatory panel discussion.
Jean St-Gelais, president and CEO of Quebecs Autorit des marches financiers (AMF), told the crowd that the AMF has been meeting with the International Monetary Fund (IMF) to monitor the implementation of a risk-based capital adequacy model not unlike Europes Solvency II, and that model will likely be adopted across the country.
He spoke of the importance of the self-assessments the AMF has carried out to oversee the implementation of the model.
I can tell you that these things that we talked about, these international bodies and standards which are good in speeches happen to be true in real-life, St-Gelais said.
We have to do self-assessments and send them to the IMF and it gets back to us so that we can see that so far Canada has a highly sophisticated regulatory framework.
Bob Christie, CEO and superintendent of the Financial Services Commission of Ontario, stressed the importance of self-assessment related to corporate governance.
Laws dont address everything, and companies need to do their part to ensure that theyre doing the right thing, Christie told the crowd. In doing so they are protecting their reputation and minimizing the need for regulatory intervention.
The use of unapproved rates by insurers, he continued, is an example of how problems with governance and internal controls can lead to issues in terms of compliance.
This situation on the auto side occurred in a reasonably benign pricing environment, Christie said, forcing the regulator to ask what happens then, when things get rough?