Section 9 of Guideline A - Minimum Continuing Capital and Surplus Requirements for life insurance companies and fraternal benefit societies indicates that, subject to OSFI's approval, institutions can use their internal models to determine required capital for out-of-Canada segregated fund products. OSFI is now willing to consider applications for approval to use internal models to determine required capital for Canadian segregated fund products. The attached instruction guide provides the criteria that must be met to obtain OSFI's approval.

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 instruction guide is available in English and in French on OSFI's Internet Web site (http://www.osfi-bsif.gc.ca) under the Publications section. It 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.