The Financial Services Commission of Ontario has released a final guideline regarding portfolio investments by insurance companies.

Philip Howell, acting superintendent and CEO of FSCO, says in a letter that FSCO is currently developing recommendations to present to the government for the adoption of a “prudent portfolio” model for investments, along with an appropriate updating of the corporate governance and related party rules for insurance companies.

He notes that, in anticipation of the prudent portfolio regime and as an interim measure, a recent Budget Bill included provisions to expand the investment powers of Ontario insurers. “Specifically, amendments to the Insurance Act have added mutual and pooled funds to the list of permissible investments and removed income-related restrictions on preferred and common shares. These amendments refer to a guideline to be issued by the Superintendent with which insurers would need to comply when making such investments.”

A draft of the guideline regarding this new provision was shared with insurers last October. The final version of the guideline is now available on FSCO’s Web site.