rules and regulations

Federal financial regulators are proposing changes to the capital rules for life insurers that are likely to hike capital requirements for some firms.

The Office of the Superintendent of Financial Institutions (OSFI) has proposed changes to the life insurance capital adequacy test (LICAT).

Among other things, the changes aim to address volatility in interest rate risk requirements that are created by the LICAT methodology, OSFI said.

Noting that the proposed revisions “could result in an initial increase in capital requirements for some insurers,” OSFI said that it’s proposing that the impact be phased in over six quarters.

Comments on the proposals are due by March 26. OSFI aims to finalize the updated rules by mid-2020.