Federal financial regulators are proposing a new fee model for insurers that aims to do a better job of matching the fees charged with the cost of supervision.
The Office of the Superintendent of Financial Institutions (OSFI) issued a consultation paper Tuesday setting out a proposed new assessment methodology for insurers. OSFI reports that it has reviewed its existing regulations to ensure that its
assessments appropriately reflect the time and resources that it devotes to monitoring, supervising and regulating individual financial institutions.
In the wake of that review, the paper proposes: a new measure on which to base all insurance assessments; updating the minimum assessment methodology; a new assessment category for mortgage insurers; and, it summarizes the aggregate impact of the proposed changes on the life insurance and property and casualty (P&C) insurance sectors.
OSFI notes that the proposed changes only affect the allocation of its expenses across institutions, and not the total amount assessed. It estimates that the change to the proposed risk-based methodology would benefit the majority of insurers, with approximately two-thirds experiencing decreases in their assessments.
However, changes to the minimum assessment mean that 33 life insurers would see their minimum assessments raised from $10,000 to $15,000, and another 11 would be captured by the minimum assessment of $15,000. Additionally, 79 P&C insurers would see their minimum assessments raised from $10,000 to $15,000, and an additional 15 P&C insurers would be captured by the minimum assessment of $15,000.
Comments on the proposed changes are due by August 31.