As is done every year, we have updated the Memorandum for Actuarial Reports on Property and Casualty Business outlining the guidelines and requirements for the actuaries who are required to prepare reports to be filed with the P&C-1; and P&C-2; annual returns, pursuant to section 667 of the Insurance Companies Act.

This Memorandum is the result of discussions between OSFI and other provincial regulators in an effort to harmonize the insurance regulators’ actuarial requirements for companies. This Memorandum can be found in English and French on our website at:

http://www.osfi-bsif.gc.ca/eng/publications/guidance/index_financial.asp#MemoPC

http://www.osfi-bsif.gc.ca/fra/publications/orientation/index_financiers.asp#Instructions_multirisques

The changes made to last year's Memorandum are indicated by a sidebar located to the right of the lines where modifications were made. Instructions that deserve special attention are highlighted in bold.

This year’s main changes are as follows:

• The disclosure of compensation methodology is now required in the report;
• The former Appendix II has been replaced with the Unpaid Claims and Loss Ratio Analysis Exhibit to be filed by business line. An electronic filing of these new exhibits will eventually be requested. Instructions in this regard will be forwarded at a later date;
• Section 5.1 on External Reviews has been modified.

Companies are reminded that discounting of all policy liabilities has been required for all federally regulated property and casualty insurance companies since January 1, 2003. However, the comparison of Actual Experience with Expected Experience must still be provided for the last five years on an undiscounted basis.

Please note that two (2) copies of the Actuary’s Report and the DCAT Report should be sent to the Regulatory Information Division, Ottawa. According to regulations actuarial reports are subject to late or erroneous filing penalties.

Should you have any questions, please do not hesitate to contact me at (613) 990-7797. A hard copy of this Memorandum can be obtained upon request. Please fax requests to Stéphane Dupel at (613) 952-8219.