Reference: Guidance Note for Canadian Life Insurance Companies
Our File: P2218-1, P2565-1

June 20, 2000

Subject: Capital Instruments

OSFI’s Guideline A, Minimum Continuing Capital and Surplus Requirements (MCCSR), sets out the primary considerations for defining the capital of a company for purposes of measuring capital adequacy. As a result of recent enquiries, OSFI is issuing a guidance note that modifies and clarifies OSFI’s position regarding the acceptability of certain features pertaining to Tier 1 preferred shares and Tier 2a hybrid instruments. The guidance note comes into effect immediately. OSFI plans to incorporate this guidance note in the next revision of the MCCSR Guideline.

This guidance note is available in English and French on OSFI’s Internet web site (http://www.osfi-bsif.gc.ca) under the Publications section. It can also be obtained by contacting Mr. Stéphane Dupel, General Services Division, by e-mail at extcomm@osfi-bsif.gc.ca or by facsimile at (613) 952-8219.

Questions regarding the guidance note should be addressed to Mr. Silvano Tittonel, Capital Division, at (613) 990-6429 or by facsimile at (613) 998-8466.

Michael Hafeman
Assistant Superintendent
Specialist Support Sector