Regulatory Alerts2019-03-31
Residential Mortgage Insurance Underwriting Practices and Procedures Guideline (2019)
The Office of the Superintendent of Financial Institutions (OSFI) issued this 2019 guideline to establish six fundamental principles governing residential mortgage insurance underwriting for federally-regulated Canadian mortgage insurers. Insurers must develop and annually review a comprehensive Underwriting Plan overseen by senior management, while implementing rigorous lender qualification standards, precise loan criteria (including debt service ratios and income verification), and risk-based property valuation methods. The framework mandates continuous portfolio risk management, stress testing, accurate lender reporting, and transparent disclosure to ensure prudent risk mitigation and financial soundness across the residential mortgage insurance sector.