By letters dated November 29, 2000 and May 7, 2001, I informed you that the Office of the Superintendent of Financial Institutions (OSFI) is participating in a joint project between the Canadian Council of Insurance Regulators (CCIR) and the Insurance Bureau of Canada (IBC) to harmonize and simplify the present system of insurance classes. Your comments on the proposed harmonized classes were requested.

Approval of sixteen harmonized classes of insurance was obtained by the CCIR in 2001. It should be noted that the definition of "marine" insurance will not be harmonized at this time.

The next steps in the harmonization project will be to implement the sixteen classes in each jurisdiction, except in Quebec, where the review included fifteen classes only as the "life insurance" definition has not been modified. This will take time due to differing legislative processes that exist in each jurisdiction. Also, the wordings adopted in each jurisdiction may vary slightly as legal drafting may result in wording variations. It is expected that most jurisdictions will have the classes substantially operational for industry use within 3 years.

The full package of definitions and associated process documents are available in English and French via OSFI's Web site at www.osfi-bsif.gc.ca under "Publications/Notices/Industry Notices" for insurers. Please contact Monique Champagne at (613) 990-6943 should you have any questions.