Few changes are anticipated for the 2016 version of the minimum capital test (MCT), which requires federally regulated property and casualty insurance companies in Canada to maintain adequate capital, says Judith Roberge, director of property and casualty insurance, capital division for the Office of the Superintendent of Financial Institutions (OSFI).
“The biggest change is going to be with respect to the capital treatment of equity derivatives,” Roberge noted during the Canadian Solvency and Capital Developments session at Insurance Bureau of Canada’s 19th Annual Financial Affairs Symposium in downtown Toronto Wednesday.
The plan is to move forward with the introduction of a capital charge on equity derivatives, as well as recognition of equity hedging strategies as they pertain to both exact hedging and inexact hedging, she explained to attendees.
Angela Stelmakowich – CANADIAN UNDERWRITER.CA – APRIL 23, 2015.