Insurance & Reinsurance
The International Monetary Fund (IMF) has released its Financial System Stability Assessment in accordance with the IMF's Financial Sector Assessment Programme. The assessment noted that the insurance sector performed well in stress tests undertaken by the IMF, but also offered suggestions to safeguard further the stability of the insurance sector.
The Office of the Superintendent of Financial Institutions Canada (OSFI) has issued a draft advisory on board and senior management changes which applies to all federally regulated financial institutions (FRFIs), including insurers. The draft advisory is based on the principle that FRFIs should notify OSFI whenever such changes are contemplated.
The two main vehicles for establishing an insurance business in Canada federally are incorporation of a Canadian insurance company and qualification of a Canadian branch of a foreign insurance company. The information requirements and timing for both are very similar, and both involve an extensive approval application to the Office of the Superintendent of Financial Institutions Canada.
In certain respects, a 2009 Office of the Superintendent of Financial Institutions advisory opened the door to foreign insurers which do not already have licensed Canadian branches to consider entering into insurance contracts that cover Canadian risks. However, before doing so, unlicensed foreign insurers should ensure that provincial legislation is consulted and that the applicable unlicensed insurance regime is followed.
Effective January 1 2013, administrative monetary penalties were introduced to Ontario's insurance industry as a result of legislative changes. The penalties were implemented in order to help the Financial Services Commission of Ontario address contraventions of the law more efficiently and promote compliance.
The Canadian Council of Insurance Regulators (CCIR) has issued a paper entitled "Position Paper: Electronic Commerce in Insurance Products". The real driver for this exercise is the significant rise in internet use by insurance providers. According to the position paper, the CCIR's concern is that customers should be afforded access to necessary information and protection, even when purchasing insurance online.
More Insurance & Reinsurance updates >