2016 Annual Return Instructions to Ontario incorporated insurers and reinsurers, fraternal societies, and reciprocal insurance exchanges

As part of the Financial Services Commission of Ontario (FSCO) monitoring of Ontario insurers, we require all licensed insurers to provide the documents described below, unless otherwise noted:
 

Business Plan

 
We request that you submit a company Business Plan for the year 2017. As a minimum, the Plan for 2017 should include a full-year forecast of the Income Statement, Balance Sheet and the Minimum Capital Test as at year-end 2017. The Plan should be detailed enough to enable us to track your company’s progress against its key performance indicators at the end of each calendar quarter, but ideally on a monthly basis, and to assess the significance of any variance that may emerge in that quarter or on a year-to-date basis. Please include a narrative about the action plan you believe would help us to better understand your plans for the year.
 
If you have not already provided us with your 2017 Business Plan, we would request that it be submitted on or before February 28, 2017 and in an electronic format (pdf copy).
 

Dynamic Capital Adequacy Testing (DCAT)

 
We require that all Ontario insurers (other than Fraternal Societies, Reciprocal Insurance Exchanges and insurers that are members of the Fire Mutuals Guarantee Fund) submit a DCAT report to FSCO no later than September 30, 2017. Please submit one electronic copy (signed pdf) of the report.
 
Since the DCAT process involves a projection of the changes in financial conditions under various scenarios, we expect that the company board of directors and senior management will review and assess the significant risks and the implications from the Business Plan on capital with the Appointed Actuary, and take actions as needed. The DCAT report is expected to be prepared in accordance with the Canadian Institute of Actuaries Standards of Practice and signed by the Appointed Actuary.

 

Please refer to the following directive released by OSFI and take note of FSCO’s position on the respective issue:

 

Life Insurance Capital Adequacy Test (LICAT) Guideline 2018 for Life Insurance Companies

 
FSCO is adopting the Guideline on Life Insurance Capital Adequacy Test (LICAT) for life insurance companies and fraternal benefit societies that was released by OSFI in September 2016.  Effective January 1, 2018, the LICAT guideline will replace the Minimum Continuing Capital and Surplus Requirements (MCCSR) guideline and is available on OSFI’s website [New Window].

We look forward to receiving the information requested on or before the dates indicated for each item above.

 
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