OSFI indicated, in Section 9 of the Guideline A - Minimum Continuing Capital and Surplus Requirements for life insurance companies and fraternal benefit societies, that hedging criteria for segregated funds would be made available to the industry in 2001. The attached guidance note provides the criteria that must be met to obtain OSFI’s approval for a capital offset in respect of a hedging program for segregated funds.

Questions concerning the criteria should be addressed to the Relationship Manager at OSFI or, alternatively, to Mr. Sheldon Selby, Actuarial Division, at (416) 973-7817, or by e-mail at sselby@osfi-bsif.gc.ca.

The hedging criteria are available in English and in French on OSFI’s Web site (http://www.osfi-bsif.gc.ca) under the Publications section. They may 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.