The Office of the Superintendent of Financial Institutions has issued a guide regarding the “Use of Internal Models for Determining Required Capital for Segregated Fund Risks”

OSFI’s minimum requirements for life insurance companies and fraternal benefit societies indicates that, subject to OSFI’s approval, institutions can use their internal models to determine required capital for out-of-Canada segregated fund products.

In a letter from Michael Hafeman, assistant superintendent, OSFI says that it is now willing to consider applications for approval to use internal models to determine required capital for Canadian segregated fund products. This new instruction guide provides the criteria that must be met to obtain OSFI’s approval.