On July 10, 2009, Quebec's financial services regulator, the
Autorité des marchés financiers (AMF), released a
draft guideline respecting reinsurance risk management by insurers
carrying on business in Quebec. Reinsurance, while obviously an
important risk management tool for insurers, exposes them to a
number of risks, including residual insurance, legal, counterparty
and liquidity risks. Citing the AMF's principles-based approach
to regulation, the guideline sets out four broadly-drafted
principles for the management of reinsurance risks by insurers:
A reinsurance risk management framework should be supported by
effective governance. The AMF considers the board of directors and
senior management to be ultimately responsible for reinsurance
decisions and expects that they should, among other things, develop
and implement a reinsurance strategy and risk management policy
tailored to the insurer's risk profile, adequately monitor
reinsurance transactions and review the reinsurance strategy and
policy on a regular basis.
Reinsurance risk management should be an essential part of an
insurer's integrated risk management framework and should take
into account its overall risk appetite and tolerance levels, be
integrated into its strategic and financial planning process and be
considered in the development or renewal of products.
A policy for managing reinsurance risk should be adopted and
include procedures for selecting risk transfer methods and
reinsurers as well as procedures for implementing, reviewing,
amending and documenting reinsurance agreements. The policy should
also, among other things, define the conditions for using
alternative risk transfer mechanisms, address the possibility of
using intermediaries, determine the reinsurer selection process,
address reliance on unregistered reinsurers and outline the process
for monitoring the application of the policy.
Insurers should adopt a process to implement the reinsurance
risk management policy and establish a process for ceding insurance
and implementing alternative risk transfer mechanisms.
The AMF intends to assess compliance with the stated principles in
light of the risk profile of each insurer. The proposed guideline
is open for comment until October 30, 2009.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
Under B.C.'s former and current Limitation Act, the limitation period for a Plaintiff's claim can be extended on the basis of a Defendant having acknowledged in writing some liability for the cause of action.
Automobile drivers, like fine wine, tend to get better with age. Older drivers can draw on a wealth of experience from their years on the road to assist them when faced by a variety of dangerous conditions.
The insurance industry will be interested in Ledcor Construction Ltd v. Northbridge Indemnity Insurance Co because of principles the Supreme Court of Canada applied to the "faulty workmanship" exclusion in a Builders' Risk policy.
For the first time in BC, a Court has decided that an insured is entitled to special costs, rather than the lower tariff costs, solely because they were successful in a coverage action against their insurer.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).