MONTRÉAL, July 21, 2022 /CNW Telbec/ - The Autorité des marchés financiers (AMF) today is publishing its capital adequacy requirements for insurers, which have been adapted in anticipation of the coming into effect of IFRS 17 Insurance Contracts (IFRS 17) on January 1, 2023. The four guidelines, which, like IFRS 17, will come into effect on January 1, 2023, are as follows:
- Guideline on Capital Adequacy Requirements – Life and Health Insurance
(CARLI); - Guideline on Capital Adequacy Requirements – Property and Casualty Insurance (MCT);
- Capital Adequacy Requirements Guideline– Self-Regulatory Organizations (MCT – SRO);
- Capital Adequacy Requirements Guideline – Reciprocal Unions (MCT – RU).
IFRS 17 represents a major accounting change for the insurance industry in Québec and elsewhere in Canada and the world. Its implementation will have an impact on insurers' accounting, actuarial valuation and disclosure practices and on their systems supporting those practices. The guidelines published today reflect the improvements introduced by new standard IFRS 17 in terms of transparency and comparability of risks. The Québec insurance industry, in general, is well-capitalized under the current accounting rules and guidelines and will remain so upon the transition to IFRS 17.
"The AMF is proud to be publishing these guidelines, which will bolster public and market confidence in Québec's financial system," said AMF President and CEO Louis Morisset. "I applaud the work of all the stakeholders involved, especially on the industry side, for whom the transition to IFRS 17 has been the focus of considerable efforts and investments. I would also like to thank the Office of the Superintendent of Financial Institutions, which worked closely with us throughout this multi-year project to ensure the implementation today of harmonized and robust capital requirements."
The guidelines are the result of a process carried out with the Office of the Superintendent of Financial Institutions, as well as with insurers and other stakeholders whose input was obtained through numerous consultations, discussions and quantitative impact studies.
As IFRS 17 is a new standard, its impact will only be fully known once its implementation is completed in 2023. Given this, and the current context of higher interest rates and strong stock market volatility, the AMF expects insurers, in accordance with its risk management framework, to act prudently when making decisions that affect their level of capital.
The Autorité des marchés financiers is the regulatory and oversight body for Québec's financial sector.
Information:
Media only:
Jean-Maurice Bouchard : jean-maurice.bouchard@lautorite.qc.ca
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