Actuarial Notes

Guidance for the 2025 Reporting of Capital, Financial Condition Testing, and Own Risk and Solvency Assessment for Life and Health, Property and Casualty, and Mortgage Insurers

By Canadian Institute of Actuaries · 2025 · 225015

Study guide: Exam 6C

A CIA educational note guiding actuaries on the 2025 reporting of regulatory capital, FCT and ORSA for life and health, P&C and mortgage insurers in Canada. Prepared by the Committee on Risk Management and Capital Requirements and dated February 13, 2025 (document 225015), it gives a high-level summary of key changes and updates, with each section marked (new), (modified) or (unchanged), and is not intended to replace the actuary's review of the applicable guidelines. The CIA archived it on February 11, 2026, and lists the guidance for 2026 reporting as its newest version.

On the syllabus

  • Exam 6C — objectives C4 and C5; the February 2025 note — candidates are not responsible for details related to life assurance, mortgage insurance companies, or externally linked articles unless specified in the content outline, nor for Sections 2.1, 2.3, 5, 6, Appendices A, B, and C.

Preamble

  • Process
  • Guidance to members on specific situations
  • Your feedback

1 General background (modified)

  • 1.1 IFRS 17 and IFRS 9 accounting standards (modified)
  • 1.2 Climate Risk Management (modified)
    • OSFI Guideline B-15 and the AMF's Climate Risk Management Guideline expect insurers to perform climate scenario analysis and complete the standardized climate scenario exercise (SCSE), which is separate from the standardized stress tests OSFI mandates from time to time.

2 Regulatory capital requirements for 2025 (modified)

  • 2.1 Life regulatory capital requirements for 2025 (modified)
  • 2.2 P&C regulatory capital requirements for 2025 (modified)
    • OSFI's Minimum Capital Test – Guideline (2024) came into effect January 1, 2024; the AMF's updated P&C capital adequacy guideline, effective January 1, 2025, adds requirements for insurers exposed to nuclear risk and recognizes two additional rating agencies, in alignment with OSFI.
  • 2.3 Mortgage insurance regulatory capital requirements for 2025 (modified)

3 Considerations for the 2025 financial condition testing (modified)

  • 3.1 Standards of Practice: Section 2500 Financial Condition Testing (unchanged)
    • Section 2500 has not changed since it took effect on January 1, 2020; the January 2023 FCT educational note added climate-related risks and technology and cyber risk to the major risk categories for FCT.
  • 3.2 Recent events (modified)
    • Three questions decide how an event between the calculation date and the report date is reflected: does it materially affect the financial position or the base scenario, the insurer's risk profile, or management or board decisions.
  • 3.3 Additional guidance on the 2025 financial condition testing (modified)
    • Standardized stress tests
      • OSFI planned a standardized stress test in 2025 for federally regulated life and P&C insurers, examining a reinsurance failure scenario.
    • OSFI and AMF FCT templates
    • Climate-related risk
      • If climate-related risks are material for the insurer, the actuary would develop a relevant scenario in the FCT.
    • Technology and cyber risk
    • Management actions
      • Routine management actions are reported in the FCT report so that users, including the peer reviewer, can assess their practicality and adequacy.

4 Considerations for the 2025 own risk and solvency assessment (modified)

  • 4.1 Additional guidance on the 2025 ORSA (new)
    • Under subsection 2430 of the Standards of Practice, the ORSA report is part of the information the Appointed Actuary needs to fulfil their role.
  • 4.2 Economic capital modelling (modified)
    • Economic capital modelling for the ORSA need not use the IFRS 17 and regulatory capital frameworks — a modified regulatory framework or an alternative such as Solvency II is acceptable — and the implications of its approximations for selecting internal targets would be understood and communicated.
  • 4.3 Recent events (modified)

5 Recently approved regulatory guidelines (modified)

6 Upcoming regulatory guidelines (modified)

Appendix A: OSFI documentation

  • Guidelines and advisories
  • Filing instructions, reporting requirements and regulatory data collection

Appendix B: AMF documentation

  • Guidelines
  • Filing instructions and reporting requirements

Appendix C: CIA guidance

Related readings

  • CIA FCT 1 — a later (August 2025) version of the FCT educational note §3.1 refers to, whose update expanded its cyber and climate risk references in line with this guidance
  • CIA CSOP — the Standards of Practice, whose Section 2500 §3 quotes and whose subsection 2430 §4.1 cites
  • OSFI MCT — the Minimum Capital Test – Guideline (2024) described in §2.2
  • OSFI Climate — Guideline B-15, described in §1.2
  • OSFI ORSA — Guideline E-19, listed in §4.1 among the regulators' ORSA guidance
  • OSFI Target Capital — Guideline A-4, listed in §4.1 among the regulators' ORSA guidance
  • OSFI AA — Guideline E-15, quoted in §3.2 on recent events

Sources