The Office of the Superintendent of Financial Institutions (OSFI) on Monday announced a revised minimum capital test (MCT) guideline for property & casualty (P&C) insurers that will take effect on Jan. 1, 2016.
The revised guideline “expands on the existing provisions related to equity risk,” OSFI says in a statement..
The proposed new rules updating the regulatory capital treatment of P&C firms in certain areas were published for comment in July, and OSFI reports that it has made a couple of changes to the guidelines as a result.
For example, the revised guideline introduces transition periods for the new capital treatment of equity derivatives, common shares that are held short, and eligible equity hedges. As well, the revised guideline alters the requirements for branches of foreign insurance companies.