The Financial Services Regulatory Authority of Ontario (FSRA) has published its approach to the supervision and risk assessment of the province’s incorporated insurance companies and reciprocals based in Ontario.
The Risk Based Supervisory Framework for Ontario Incorporated Insurance Companies and Reciprocals Guidance, or RBSF-I, spells out the processes and practices FSRA will follow when establishing supervisory plans and taking supervisory action. The report includes a discussion of FSRA’s principles and standards and elements they say will enable a common approach to assessments across insurers and over time. It also discusses company importance, inherent risks, controls and oversight.
“This approach guidance articulates FSRA’s supervisory approach for all insurers, as well as the practices and processes for determining and insurer’s overall risk rating (ORR), intervention level and the level of FSRA’s supervisory activity,” they write. “The guidance does not prescribe compliance obligations for insurers. Rather, it describes the processes and practices FSRA will follow.”
They add that the extent of supervision will depend on the size, complexity and risk profile of each insurer, along with the potential consequences and systemic impact which could occur were the insurer to fail.
The RBSF-I’s primary focus, they say, “is to determine the impacts of current and potential future events, both internal and external, on the risk profile of each insurer and drive FSRA’s allocation of supervisory resources.”
