Regulatory Alerts1997-02-28
Securities Lending Guideline for Life Insurance Companies
The Office of the Superintendent of Financial Institutions requires federally regulated Canadian life insurance companies to conduct securities lending activities in a safe and prudent manner while maintaining adequate collateral. Companies must hold collateral valued at least 102 percent of lent securities, restrict eligible assets to highly rated debt, cash, and shares, and implement robust internal controls with approved borrower lists and regular senior management reviews. The guideline further mandates legally binding master agreements, clear agent administration arrangements, and compliance with protection of assets regulations to mitigate liquidity and credit risks.
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