Regulatory Alerts2025-11-20
Minimum Capital Test – Guideline (2026)
The Office of the Superintendent of Financial Institutions issued this guideline to establish a risk-based capital framework for federally regulated property and casualty insurance companies, mandating minimum and supervisory target capital ratios of 100% and 150%. The framework calculates required capital using a 99% expected shortfall confidence level over one year and defines qualifying capital components across three categories alongside consolidation, allocation, and annual audit rules. It further outlines transitional arrangements for business combinations, intra-group pooling approvals, and specific asset vesting requirements for foreign companies operating on a branch basis.
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