Regulatory Alerts2024-11-21
Parental Stand-Alone (Solo) Capital Framework for Federally Regulated Life Insurers
The Office of the Superintendent of Financial Institutions requires federally regulated life insurers designated as Internationally-Active Insurance Groups to maintain a minimum 100% risk-based Solo capital ratio on a stand-alone basis effective January 1, 2025. This framework calculates the ratio by adjusting consolidated capital and solvency buffers to exclude non-parental foreign elements while incorporating parental guarantees, ensuring the domestic parent retains sufficient loss-absorbing capacity to act as a source of strength for its subsidiaries. By mandating continuous compliance, the guideline facilitates orderly insurer resolution and safeguards financial stability and policyholder interests during periods of stress.
Share