Regulatory Alerts2012-01-17
Notice of Interpretation on Future Mortality Improvement Treatment under Capital Adequacy Requirements Guideline for Life and Health Insurers
The Autorité des marchés financiers (AMF) issued this notice to clarify how Québec life and health insurers may offset the subtraction of future mortality improvement from Tier 1 capital under their Capital Adequacy Requirements Guideline. The interpretation permits insurers to use a net increase in actuarial liabilities from applying a Canadian risk-free interest rate below the prescribed lower bound, while explicitly excluding segregated fund guarantees and ensuring the subtracted amount remains non-negative. Insurers must submit a prior written request demonstrating that their specific application meets these criteria whenever calculating their capital ratio.
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