Actuarial Notes

P&C Supervisory Quarterly Return (PC2)

By Office of the Superintendent of Financial Institutions · 2023 · PC2

Study guide: Exam 6C

The P&C supervisory quarterly return, approved by the Canadian Council of Insurance Regulators: consolidated exhibits and non-consolidated financial statements. This is the 2023 form (PC2) for Canadian and foreign property and casualty insurers. Its consolidated exhibits cover general information, investments, miscellaneous assets and liabilities, insurance results and onerous contracts, provincial and territorial summaries, reinsurance ceded, and commissions and expenses; pages 92.10 to 94.40 are the non-consolidated financial statements and exhibits. The table of contents marks which pages a Canadian insurer files and which a foreign insurer files.

On the syllabus

  • Exam 6C — objectives C1–C4; pp. 40.74, 60.25, 60.80, 70.50, 70.60 and 80.15 of the 2023 return, using the 2023 Return archived on the CAS website.

10.41 Other Information

40.08 Summary of Investments

40.72 Interest Revenue on Financial Assets not Measured at FVTPL

40.74 Investment Return

  • Gross investment income is built from realized gains (losses) on sale and fair value gains (losses) — each on bonds, mortgage loans, preferred and common shares, investment properties and derivative activities — plus dividends, rental income, other investment income from derivative assets and income from other loans and invested assets.
  • Less investment expenses and investment taxes, it gives net investment income; with the provision for credit losses, the investment return, which carries to the statement of profit or loss (page 20.22).

40.80 Other Loans and Other Invested Assets

  • Other Loans
  • Other Invested Assets

40.84 Summary of Equity Accounted Investees

40.88 Summary of Provisions

40.92 Provisions, Accruals & Other Liabilities

50.32 Intra-Group Transactions

50.40 Receivable from/Payable to

60.25 Insurance Service Result

  • By class of insurance — property, aircraft, automobile (private passenger, other than private passenger and the Facility Association residual market, each split into liability, personal accident and other), boiler and machinery, credit, credit protection, fidelity, hail, legal expense, liability sub-classes, mortgage, other approved products, surety, title, marine, and accident and sickness.
  • For each class: the number of policies in force and of direct claims, insurance revenue (contracts measured under the GMM and under the PAA), insurance service expenses, net expenses from reinsurance contracts held, and the insurance service result.
  • Insurance service expenses are split into incurred claims and other insurance service expenses, amortization of insurance acquisition cash flows, losses and reversal of losses on onerous contracts, and adjustments to liabilities for incurred claims; net reinsurance expenses into the allocation of reinsurance premiums, amounts recoverable for incurred claims and the effect of changes in non-performance risk of reinsurers.
  • A note says OSFI is aware that allocations will be necessary to report these numbers by class of business.

60.80 Onerous Contracts

  • By class of insurance: losses and reversal of losses on onerous insurance and reinsurance contracts issued, the loss-recovery and reversal of loss-recovery on reinsurance contracts held, and the net onerous contracts losses.

67.40 Provincial and Territorial Exhibit of Insurance Revenue

67.50 Provincial and Territorial Exhibit of Insurance Service Expenses

67.60 Provincial and Territorial Exhibit of Net Expenses from Reinsurance Contracts Held

67.70 Provincial and Territorial Exhibit of Insurance Service Result

70.50 Reinsurance Contracts Held Summary - Registered Reinsurance

  • Lists each assuming insurer of registered reinsurance, grouped as associated and non-qualifying subsidiary or non-associated and non-subsidiary, with its rating agency identifier codes (A.M. Best, S&P, other, or unrated), the reinsurer's and its group's domiciliary jurisdiction, the business covered and the type of contract.
  • For each: net expenses from reinsurance contracts held (allocation of reinsurance premiums, amounts recoverable for incurred claims, effect of changes in non-performance risk), assets for remaining coverage and for incurred claims (under and not under the PAA), and reinsurance receivable, payable and net receivable.

70.60 Reinsurance Contracts Held Summary - Unregistered Reinsurance

  • The same summary for unregistered reinsurance, with added columns for reinsurance collateral: non-owned deposits held in an RSA, other acceptable non-owned deposits, funds held, and letters of credit.

80.15 Commissions

  • Total commissions for the current and prior periods, for property, automobile, liability, marine and other.

80.25 Insurance Service and Other Operating Expenses

80.35 Other Income

92.10 Assets

92.11 Liabilities and Equity

92.12 Liability Roll Forward (Analysis by measurement component (Insurance contracts not measured under the PAA - excluding Segregated Funds))

92.14 Liability Roll Forward (Analysis by remaining coverage and incurred claims (all insurance contracts - excluding Segregated Funds))

92.16 Liability Roll Forward (Reinsurance contracts held analysis by measurement component (Contracts not measured under the PAA - excluding Segregated Funds))

92.18 Liability Roll Forward (Reinsurance contracts held analysis by remaining coverage and incurred claims (all contracts - excluding Segregated Funds))

92.22 Statement of Profit or Loss

92.40 Reserves

92.42 Comprehensive Income(Loss) & Accumulated Other Comprehensive Income(Loss)

92.54 Statement of Changes in Equity

93.14 Insurance Service Result

93.30 Provincial & Territorial Exhibit of Premiums Written

94.10 Provincial & Territorial Exhibit of Insurance Revenue

94.20 Provincial & Territorial Exhibit of Insurance Service Expenses

94.30 Provincial & Territorial Exhibit of Net Expenses from Reinsurance Contracts Held

94.40 Provincial & Territorial Exhibit of Insurance Service Result

Related readings

  • CCIR Instructions — the instructions the content outline assigns for these pages
  • OSFI Core Return — the core financial statement return (PC1): pages 40.72 and 40.74 carry to its statement of profit or loss (page 20.22), which cites 60.25, 80.25 and 80.35 of this return as supporting exhibits

Sources