Superintendent’s Minimum Capital Test Guideline

About the Minimum Capital Test (MCT)

The MCT is a harmonized capital adequacy solvency test that is intended to apply throughout Canada to property and casualty (P&C) insurers. It was developed to ensure consistency among jurisdictions throughout Canada, by applying the same capital framework to P&C insurers operating in Canada. Since 2004, it has been applied on a mandatory basis to P&C insurers that are licensed in Ontario.


Who the Superintendent's MCT Guideline Applies to


Under Ontario Regulation 259/04: Minimum Capital Test [New Window], all Ontario licensed P&C insurers or reinsurers in Ontario (except for those noted below) must meet the capital requirements of the Minimum Capital Test Guideline for Property and Casualty Insurance Companies – Superintendent's Guideline No. 08/04 (Superintendent's Guideline).

Reciprocal insurance exchanges and farm mutual insurers are exempt from complying with the MCT because they have either a subscribers' agreement (reciprocals), or membership in the Fire Mutuals Guarantee Fund (farm mutuals) to provide support for their capital. However, reciprocals and farm mutual insurers are still required to file the MCT with the Financial Services Commission of Ontario (FSCO), as the MCT provides an evaluation that is comparable to other insurers.
Federally-regulated P&C insurers that are licensed in Ontario, but that are filing the MCT with the Office of the Superintendent of Financial Institutions (OSFI), are not required to file with FSCO. P&C insurers that are incorporated in other provinces, and that are licensed in Ontario, are not required to file the MCT with FSCO when OSFI's MCT Guideline or an equivalent MCT framework has been adopted by the other province.

Effective January 1, 2018: Updates to Superintendent's Guideline

The federal regulator, OSFI, has traditionally led the update of the MCT, in alignment with international best practices, through its Guideline A, Minimum Capital Test for Federally Regulated Property and Casualty Insurance Companies [New Window] (OSFI's 2016 MCT Guideline).

On October 19, 2017, OSFI released a revised Minimum Capital Test (MCT) Guideline [New Window], which takes effect on January 1, 2018 for federally regulated P&C insurers. The amendments to the MCT Guideline include:


  • removal of transition requirements that are no longer applicable; and
  • providing clarification on a number of provisions for which OSFI received inquiries over the past year.

The Superintendent of Financial Services has decided to adopt OSFI's updated MCT Guideline, and will be incorporating OSFI’s updates into the Superintendent's Guideline, effective on January 1, 2018.


The updated Superintendent's Guideline is expected to be posted on FSCO’s website by December 2017.


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