OSFI MCT

Question 1

OSFI MCT - Resons for 150% supervisory target

Answer 1

volatility in markets and economic condition; innovations within industry; consolidation; risks not defined in test like systems, data, management etc

Question 2

OSFI MCT - Considerations for defining capital

Answer 2

permanence; no mandatory charges against earnings; subordinated to rights of policyholders

Question 3

OSFI MCT - Categories capital is restricted to

Answer 3

equity; preferred shares and subordinated indebtedness; non-controlling interests in consolidated subsidiaries

Question 4

OSFI MCT - Potential asset risks

Answer 4

asset default; loss of market value

Question 5

OSFI MCT - Risk associated with policy liabilities

Answer 5

variation in unpaid claim provisions, inadequacy of unearned premium, inadequacy of provision from premium deficiency, catastrophes