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ARCHIVED - Office of the Superintendent of Financial Institutions Canada
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Table 4: Progress Towards OSFI's Regulatory Plan
| Legislative Acts and/or Regulations | Purpose of regulatory initiative | Expected results |
| Regulations Amending the Investment Limits Regulations | The regulations are expected to be amended to: (1) increase the equity investment limit for property and casualty insurance companies; and (2) exclude equity investments made by life insurance companies and deposit-taking institutions for hedging purposes from the equity investments limits. | The amendments under consideration would provide increased flexibility in the investment limits regime. They would also level the playing field with federally regulated financial institutions that are currently exempt from the limit. |
| Regulations Amending the Reinsurance (Canadian Companies) Regulations and the Reinsurance (Foreign Companies) Regulations | The regulations are expected to be amended to: (1) clarify how they apply to the accident and sickness business of life insurance companies; (2) determine whether the maximum percentage of unregistered reinsurance allowed under the regulations remains appropriate in light of legislative amendments that will require foreign insurers to report and vest assets in respect of their business in Canada; and (3) adapt the language of the regulations to reflect the amendments to Part XIII of the Insurance Companies Act. | The amendments under consideration are expected to: (1) clarify that the regulations apply to life insurance companies that write accident and sickness insurance and that all of the premium income (i.e., not only the accident and sickness premium income) should be included in the denominator for purposes of determining the reinsurance limit; (2) increase flexibility if it is determined that reinsurance capacity in Canada will be affected as a result of legislative amendments that will require foreign companies to vest assets in respect of their business in Canada; and (3) clarify that the regulations only apply to a foreign company’s business in Canada and not to risks located in Canada. |
| Assets (Foreign Companies) Regulations | The purpose of the regulatory proposal is to repeal the regulations. | OSFI will amend its asset guidelines to address the requirements that were prescribed by the regulations. |
| Regulations Amending the Financial Leasing Entity Regulations | The regulations are expected to be amended to provide more clarity with respect to the limitations on leasing activities and to provide more flexibility with respect to permissible residual value risk exposure. | The amendments under consideration would clarify how the limits on permitted leasing activities are to be calculated and would recognize the use of residual value insurance as an acceptable means of reducing the residual value risk exposure. |
| Property and Casualty Companies Borrowing Regulations | The regulations are expected to be amended to increase the borrowing limit to 10% for mortgage insurers that issue debt instruments to their parent company. | The amendments under consideration would enable mortgage insurers to more efficiently support business growth, while not unduly increasing the risks associated with debt issuance. |
| Related Party Transaction Regulations | The regulations are expected to be amended to prescribe certain additional related party transactions as permitted transactions. | The regulations would require federally regulated financial institutions to limit their related party transactions in a manner that better reflects the intent of the legislative self-dealing regimes. |