A - KPMG PACICC

Question 1

KPMG PACICC

Contrast the responsibilities of Federal and Provincial insurance regulators

Answer 1

1) federal : OSFI is responsible for solvency supervision, so that insurers meet their obligation to policyholders
2) Provincial : focus on distribution issues such as market conduct, consumer protection, rate and form regulation

Question 2

KPMG PACICC

5 matters of provincial regulation

Answer 2

• Filings and approval of premium rates
• Residual Markets
• licensing of agents
• Licensing of insurance companies
• Mandatory coverage
• Market Conduct
• Terms of insurance contracts
• sales practices
• claims settlement practice

Question 3

KPMG PACICC

discuss changes in actuarial involvement in the 80s 90s and 00s

Answer 3

80s

• introduction of a prescribed annual statement
• introduction of certification of AA for adequacy of claims and reinsurance.

90s

• creation of PACICC
• addressing the excessive use of reinsurance
• DCAT report required

00s

• inclusion of discounted policy liabilities
• implementation of MCT by OSFI
• External review required

Question 4

KPMG PACICC

3 roles in solvency monitoring of AMF in Quebec.

Answer 4

• ensure institutions have all authorizations to operate in Quebec
• ensure institution meet legal and regulatory requirements
• develop guidelines and standards for financial institutions

Question 5

KPMG PACICC

Main objective of OSFI

Answer 5

to ensure insurers meet their obligations to policyholders (safety and soundness, and solvency)

Question 6

KPMG PACICC

2 changes made to the ICA and 1 initiative resulting from failures in early 80s

Answer 6

1) regulations to address excessive use of reinsurance
2) requiring AA to report on policy liabilities, DCAT and potential material adverse effect and rectification

3) Creation of PACICC