Insurers - Framework for a new standard approach to setting capital requirements

The Autorité des marchés financiers has published on its website a discussion paper (pdf - 166 KB)This link will open in a new windowUpdated on March 13, 2008 which proposes a new standard approach to determine how much capital a Canadian life insurance company should be required to have on hand in order to be able to meet its obligations to policy holders. The proposed framework is consistent with the "Canadian Vision for Life Insurer Solvency Assessment". It uses a target asset requirement approach, meaning that insurance companies would be required to hold assets equal to the best estimate of their insurance obligations plus a solvency buffer.