The Office of the Superintendent of Financial Institutions Canada (OSFI) on Friday issued a set of proposed revisions to its Life Insurance Capital Adequacy Test (LICAT) guideline for federally regulated life insurers.

The new requirements take effect Jan. 1, 2018, replacing the Minimum Continuing Capital and Surplus Requirements (MCCSR).

The new capital framework is designed to improve the overall quality of available capital, enhance risk sensitivity, and to more closely align risk measures with the economics of the life insurance business, according to OSFI’s announcement.

It is also expected to behave very differently than the MCCSR ratios.

As a result, OSFi and the life insurance industry have undertaken testing and other work to prepare for the implementation of the new regime.

Based on the results of those efforts, along with other industry feedback, OSFI has published further refinements to the initial version of the LICAT guideline.

The deadline for comments on the proposed revisions is July 28.

The final version of the guideline will be published in the fall.