Property and Casualty Insurance Sector Consultation
Executive summary

POR Registration Number: POR-033-17
Contract Number: 59017-170007/001/CY
Date of Award: October 17, 2017
Delivery Date: July 2018

Prepared for:
Office of the Superintendent of Financial Institutions (OSFI)
information@osfi-bsif.gc.ca
www.osfi-bsif.gc.ca

Prepared by: Pollara Strategic Insights
1255 Bay Street, Suite 900 Toronto, ON M5R 2A9
416-921-0090

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A. Background and Research Objectives

The primary objective of this research is to explore impressions of OSFI in the discharge of a number of key elements of its mandate as a regulator of property and casualty insurance companies, including guidance, supervisory activities and the approvals process.

B. Methodology

A total of 51 one-on-one interviews were conducted among Chief Executive Officers (CEOs), Chief Financial Officers (CFOs) and other senior executives of P&C insurance companies regulated by OSFI.

Interviews were conducted either in-person or by telephone from January to April 2018.

Qualitative Research Caution: Due to the relatively small base size, as well as the qualitative nature of this study, results should be considered indicative of the views of these P&C companies, rather than as quantitative findings. These findings are intended to provide direction and ideas as opposed to definitive results.

The contract value of this study was $67,800 (including HST).

How this information is expected to be used:

The research findings will help OSFI assess how well it is achieving its mandate overall and will enable OSFI to improve on performance, as required, in its regulatory and supervisory activities as they pertain to federally regulated property and casualty insurance companies.

C. Key Findings

Impressions on the following overall measures are viewed as strongly positive:

• Satisfaction with OSFI’s performance as the principal prudential regulator and supervisor of Canada’s financial services industry;
• OSFI’s ability to focus on appropriate areas of risk in the property and casualty insurance sector;
• The approvals process, including: the assessment of OSFI with respect to communicating its expectations as it relates to information required in support of processing a request for a regulatory approval; understanding the basis on which OSFI makes decisions about the applications; responding to requests for updates on the status of the applications; and providing opportunities to discuss issues of concern before OSFI comes to a conclusion;
• OSFI’s ability to effectively communicate with P&C Insurance companies in both written and verbal form.

Impressions of OSFI are also positive on the following measures:

• OSFI’s ability to provide a clear indication of its expectations in guidance and the approvals process;
• The overall consultation process for OSFI Guideline E-21 and MCT, including the means by which companies can provide feedback and the effectiveness of the summary of stakeholder comments for E-21;
• Proactively responding to emerging issues pertaining to the property and casualty insurance sector;
• The changes to the Earthquake Exposure Data Filing.

The following areas received moderately positive feedback by many but not all. There were some, albeit a minority, who suggested these are areas which could be improved:

• The time it takes for OSFI to respond to market developments or industry suggestions that guidance needs updating;
• The timing of the consultation process for Guideline E-21 and MCT, including the time allowed for companies to provide feedback and the timing of OSFI’s responses;
• Developing guidance that strikes an appropriate balance between the prudential considerations and the need for institutions to compete;
• Ability of OSFI’s guidance to consider the nature, size and complexity of financial institutions.

OSFI’s supervisory teams receive positive feedback in the following areas:

• The overall knowledge of the supervisory teams as a whole;
• The ability of OSFI teams to respond to questions companies have brought forth concerning final guidance or supervisory matters as well as the ability to interact in the official language of the company’s choice;
• The knowledge of the Lead Supervisor is sometimes listed as an area that needs improving, often due to the perception of high turnover of these lead supervisors.