Exam 6C

The Canada Regulation and Financial Reporting (6C) Exam is a 4 hour exam with mixed question types about Canadian insurance regulation, government insurance programs, financial reporting, and solvency.

Learning Objectives

A. Regulation of Insurance and Canadian Insurance Law (20–25%) Understand the role of the insurance business as a supplier of a vital service, and navigate Canadian Insurance Legislation, regulations, and judicial decisions that affect Insurance Regulation and insurance benefits.

Discuss the current state of Insurance Regulation in Canada — the division of federal and provincial powers, OSFI and the provincial Superintendent of Insurance (the FSRA, the AMF), the Canadian Council of Insurance Regulators, the split between Solvency Regulation and Market Conduct Regulation, Rate Regulation and Risk Classification Restrictions (e.g., Territorial Rating, Unfair Discrimination, Bias in Actuarial Practice, the Take-All-Comers Rule, Usage-Based Insurance), Automobile Insurance Reform and the compulsory auto product (No-Fault Insurance, Statutory Accident Benefits, the Minor Injury Guideline, Catastrophic Impairment, thresholds and deductibles, Direct Compensation Property Damage, the Fault Determination Rules, Uninsured Automobile Coverage), and industry self-regulation through the Insurance Bureau of Canada and its Code of Consumer Rights and Responsibilities.

Discuss the issues, outcomes, rationale and implications of Court Case decisions for the insurance industry (e.g., the Duty of Good Faith, Bad Faith Damages, Punitive Damages, the Duty to Defend, Vicarious Liability, limitation periods, Prejudgment Interest, Collateral Benefits, the cap on non-pecuniary damages).

Discuss trends in Tort Litigation (e.g., Tort Reform, Class Action suits, structured settlements).

Readings: Baer and Rendall · CFAI · CIA Bias · CIA CSOP · CIA Reliance · CIA Territories · Davidson · FSCO Coverages · FSCO Private Auto · FSCO Tech Notes · FSRA Risk Management · GAO · IBC Code of Conduct · KPMG PACICC · KPMG Regulatory Oversight · Landmark Legal · Marshall · McDonald · Ontario Reg. 664

B. Canadian Government and Industry Insurance Programs (10–15%) Understand and apply the objectives, operations, and effectiveness of government and industry insurance programs, including Agricultural Insurance, Employment Insurance, Flood Insurance, Guaranty Funds (including PACICC), Health Care Insurance, residual personal insurance markets, and Workers Compensation Insurance.

Describe the origin, purpose, and philosophy of specific government and insurance industry programs (e.g., Agricultural programs, the Facility Association residual market (FARM), Risk Sharing Pools (RSP), the plan de répartition des risques (PRR)), including the Meredith Principles behind workers' compensation, Public Auto Insurance, disaster financial assistance, and the Social Insurance rationale for compulsory participation.

Describe the operations and Risk Transfer process for each government and insurance industry program and interactions with the voluntary private insurance sector, including the Adverse Selection and Moral Hazard problems each program is designed to manage.

Evaluate the effectiveness of a government and insurance industry program (e.g., Solvency, efficiencies, stability, viability and long-term prospects, effects of external factors).

Readings: Agricultural Programs · Dutil · GOC Flood Risks · Government Insurers Study Note · Morneau Shepell · PACICC

C. Canadian Financial Reporting, Solvency, and Professional Responsibility (60–70%) Demonstrate detailed knowledge of the Canadian Annual Return, including guidelines from OSFI and provincial regulatory authorities. Understand the Appointed Actuary's professional responsibilities related to financial reporting under the Insurance Companies Act and Provincial Insurance Acts.

Describe the elements of the Canadian Annual Return using standards (e.g., Financial Position, Net Income, Comprehensive Income, the excess (deficiency) ratio, the statement of changes in equity, earthquake reserves, the OSFI annual return and Quarterly Return, notes to financial statements, and the key financial ratios derived from them).

Value liabilities in accordance with accepted actuarial practice in Canada under IFRS 17 (e.g., Insurance Contract Liabilities — the Liability for Remaining Coverage and the Liability for Incurred Claims — Fulfilment Cash Flows, the risk adjustment, discount rates, the Contractual Service Margin, the General Measurement Model and the Premium Allocation Approach, the Contract Boundary, Level of Aggregation, Coverage Units, onerous contracts and the Loss Component, Insurance Acquisition Cash Flows, Insurance Revenue, Insurance Service Expenses, the Insurance Service Result, Insurance Finance Income or Expenses, the Other Comprehensive Income Option, Transition to IFRS 17, Reinsurance Contract Liabilities, and the margins for adverse deviations that IFRS 17 replaced).

Understand how Reinsurance Accounting relates to the Canadian Annual Return (e.g., Risk Transfer, Reinsurance Contracts Held, registered and unregistered reinsurance, Finite Reinsurance, effect of different types of reinsurance on the financial statements, Commutations).

Evaluate the financial health of an insurance entity based on various Solvency frameworks (e.g., the MCT — Capital Available, Capital Required, the Base Solvency Buffer, the insurance, market, credit and operational risk margins, the Diversification Credit, the Earthquake Exposure Risk Margin and PML, and the supervisory and internal target ratios — Stress Testing and Reverse Stress Testing, ripple effects, Risk Appetite, Concentration Risk, Climate Risk, key financial measures used by rating agencies, and rules-based versus principles-based solvency regulation — ORSA, FCT, Solvency II and events not in data).

Evaluate the responsibilities of an actuary as defined by standards of practice, regulators, and insurance laws for financial reporting (e.g., the Statement of Actuarial Opinion, contents of the Appointed Actuary's Report, the Standards of Practice, Accepted Actuarial Practice, Materiality, Subsequent Events, Model Risk, run-off and wind-up valuations, Educational Notes, the Insurance Companies Act, the Duty to Report, Peer Review, the actuary and auditor relationship (auditor), Corporate Governance, and regulatory requirements).

Readings: CAS Financial Reporting · CCIR Instructions · CIA Appointed Actuary · CIA CSOP · CIA Discount Rates · CIA Duration · CIA FCT 1 · CIA FCT 2 · CIA IFRS 1 · CIA IFRS 17 - Comparison · CIA IFRS 17 - LRC · CIA IFRS 2 · CIA Materiality · CIA Models · CIA PAA · CIA Runoff · CIA Subsequent Events · CIA Valuation · Feldblum · Freihaut and Vendetti · IAA Climate · IBC IFRS 17 - Metrics Discussion · ICA · IFOA · KPMG PACICC · MSA Legend · OSFI AA · OSFI Annual Return · OSFI Climate · OSFI Concentration · OSFI Core Return · OSFI Corporate Governance · OSFI Earthquake · OSFI MCT · OSFI Memorandum · OSFI Minimum Capital · OSFI ORSA · OSFI Quarterly Return · OSFI Reinsurance · OSFI Stress Testing · OSFI Target Capital

Source Material

Source Material

Alberta Auto Reform

A1 — replaced by CFAI for Fall 2026

Baer and Rendall

A2

CFAI

A1

CCIR Instructions

C1

CIA Appointed Actuary

C1

CIA Bias

A1

CIA CSOP

A1, C1-C5

CIA Discount Rates

C1, C2

CIA Duration

C1, C5

CIA FCT 1

C4, C5

CIA FCT 2

C4, C5

CIA IFRS 1

C1-C3

CIA IFRS 17 - Comparison

C1

CIA IFRS 17 - LRC

C1, C2

CIA IFRS 2

C1-C3

CIA Materiality

C1, C5

CIA Reliance

A1

CIA Models

C5

CIA PAA

C1, C2

CIA Reinsurance Treatment

C1, C3 — retired from the Fall 2026 syllabus

CIA Runoff

C1, C5

CIA Subsequent Events

C1, C5

CIA Territories

A1

CIA Valuation

C1-C5

Agricultural Programs

B1-B3

CAS Financial Reporting

C4, C5

Davidson

A2

Dutil

B1-B3

Feldblum

C2-C4

Freihaut and Vendetti

C1, C3

GAO

A3

GOC Flood Risks

B1-B3

Government Insurers Study Note

B1-B3

Harris

A2 — retired from the Fall 2026 syllabus

IAA Climate

C4

IBC Code of Conduct

A1

IBC IFRS 17 Metrics Discussion

C4

ICA

C5

IFOA

C4

Landmark Legal

A2

Marshall

A1

McDonald

A2

Morneau Shepell

B1-B3

MSA Legend

C4

Ontario Reg. 664

A1

OSFI AA

C5

OSFI Annual Return

C1-C4

OSFI Climate

C4, C5

OSFI Concentration

C5

OSFI Core Return

C1-C4

OSFI Corporate Governance

C4, C5

OSFI Earthquake

C1, C5

OSFI MCT

C2-C4

OSFI Memorandum

C1, C5

OSFI Minimum Capital

C1-C4

OSFI ORSA

C2-C4

OSFI Quarterly Return

C1-C4

OSFI Reinsurance

C5

OSFI Stress Testing

C2-C4

OSFI Target Capital

C2-C4

PACICC

B1-B3

FSCO Coverages

A1

FSCO Private Auto

A1

FSCO Tech Notes

A1

FSRA Risk Management

A1

KPMG PACICC

A1, C5

KPMG Regulatory Oversight

A1