OSFI Role and Profile Financial Stability Institute Regional Seminar for Insurance Supervisors in Latin America Panama City, Panama May 24-26, 2016 Stephen Manly Director, Life Insurance Group

2 About OSFI Independent federal agency established in 1987; Primary prudential regulator and supervisor for all federally regulated financial institutions and pension funds in Canada.

3 OSFI Area of Responsibility OSFI regulates and supervises: All banks operating in Canada (80); Federal trust and loan companies (63); Cooperative credit or retail associations (6); Life insurance companies (72); Fraternal benefit societies (13); Property and casualty insurance companies (164); Pension plans sponsored by federally regulated industries (approximately 1,200 plans, or about 6% of plans in Canada).

4 OSFI Facts OSFI is an independent agency funded on a cost recovery basis through the assessment of fees ( budget: $145m); OSFI has about 700 employees in four offices (Montreal, Ottawa, Toronto and Vancouver); Central to OSFI’s mandate and its accountability to Canadians are its activities to: –Protect the rights and interests of depositors, policyholders, pension plan members of financial institutions; –Contribute to public confidence in a safe and sound financial system. Our mandate does not include social policy, promotion of business or market conduct.

5 How OSFI works OSFI activities can be divided into two broad categories: Regulation: enhances the financial system’s safety and soundness by evaluating system-wide risks and promoting sound business and financial practices through guidelines, policy and recommendations. Supervision: identifies institution-specific and systemic risks and trends, and intervenes in a timely manner to minimize losses to policyholders, depositors and pension plan members.

6 OSFI Philosophy OSFI’s approach can be defined as: Reliance based –Financial Institutions manage themselves; –Independent auditors and actuaries (accounting and actuarial policy shop within OSFI). Risk based –Focus on substantive prudential risks (internal risk tolerance policy); –Financial Institution failures are permitted and sometimes the best option (OSFI mandate). Principles based –OSFI Guidance.

7 OSFI’s Compass for Success