Informizely customer feedback surveys

Shop Insurance Canada News

OSFI clarifies expectations for reinsurance guidelines

By: , Published on , Last Update on November 30, 2017 01:50 PM


The Office of the Superintendent of Financial Institutions (OSFI) admits its guideline on reinsurance needs clarifying. The regulatory body says it expects insurance companies to adhere to the guideline, but “this guidance was not always well-understood by the industry and [has] identified opportunities to clarify our expectations.”

FRIs use reinsurance to manage insurance risks, but reinsurance is capable of bringing its own risk, like credit issues and legal risks.

Speaking to Canadian Underwriter, OSFI says it wants FRIs to “understand and prudently manage” all risks that come with reinsurance, as detailed in its guidelines: Sound Reinsurance Practices and Procedures guideline.

FRI are expected to carry out an “appropriate level of due diligence on its reinsurance counterparty.”

Additionally, OSFI wants due diligence for current and possible future reinsurance agreements. This includes unregistered reinsurance.

“This expected due diligence should include an assessment of counterparty risk and, for unregistered reinsurance, a consideration of the regulatory and supervisory regime, and the legal and insolvency frameworks of the unregistered reinsurer’s home jurisdiction,” OSFI said.

Speaking at the KMG Annual Insurance Conference this week, OSFI’s Neville Henderson, assistant superintendent of insurance supervision admitted that “we (OSFI) noticed that a lot of companies really don’t understand the reinsurance coverage very well.”

Category: News    Tags: News, canada, insurance, news

shopinsurancecanada.ca


SUBSCRIBE TO OUR NEWSLETTER

Get the latest updates on Ontario insurance rates, multi-line bundle discounts & recent insurance news.

 
Please wait 10 seconds before you submit!

We take your privacy very seriosuly, and hate spam as much as you!

Welcome to Canada’s authoritative source for insurance news, information and rates.

Copyright 2017 ShopInsuranceCanada ShopInsuranceCanada | 1003-60 Bathurst St. Toronto, ON M5V 2P4 Canada | 416-913-0151 | Privacy Policy | Terms & Conditions