1. SOURCE OF EARNINGS DISCLOSURE
Helmut Engels
June 29, 2005
CIA Annual Meeting
Session 5609

2. More Emphasis on Disclosure
International THREE PILLAR approach
Pillar 1 – Capital Requirements
Pillar 2 – Supervision
Pillar 3 – Market Disclosure
The Source of Earnings (SOE) was identified as a good addition to Pillar 3 in Canada
Stakeholders: shareholders, policyholders, analysts, directors, management, regulators

3. Source of Earnings Existing disclosure requirements
Insurance Companies Act
CICA public disclosure requirements
OSFI guidelines
Sources of Earnings Guideline D-9
Issued December 2004
Effective for 2004 year-end

4. Source of Earnings SOE Guideline Requirements:
For Canadian life insurance companies
If an public Annual Report, then include SOE in one of MD&A, Notes or Supplementary Disclosure
If no Public Annual Report, then publicly available on request or on a web site

5. Source of Earnings Format for SOE Expected Profit on In-Force Business
Impact of New Business
Experience Gains & Losses
Management Actions and Changes in Assumptions
Other
Earnings on Operations (pre-tax)
Earnings on Surplus
Income before Income Taxes
Income Taxes
Net Income

6. Source of Earnings Survey of Companies 36 Companies
Format for SOE Table
Where Disclosed
Disclosure of Methodology
Explanation of the Numbers

7. Future Additional Disclosures
Participating Accounts
Smoothing of Income

8. Future Additional Disclosures
International Association of Insurance Supervisors
Standard on Disclosures Concerning Technical Performance and Risks for Non-Life Insurers and Reinsurers – October 2004
Standard on Disclosures Concerning Investment Risks and Performance for Insurers and Reinsurers – Draft, Final October 2005
Standard on Disclosures Concerning Technical Performance and Risks for Life Insurers
Standard on Disclosures by Insurers and Reinsurers