1. LOOKING BACK…focused on the future
CIA Annual Meeting
LOOKING BACK…focused on the future

2. MCCSR / TAAM certification by Denis Ricard
Session CIA Risk and Capital Committee - Updates on Current Initiatives
MCCSR / TAAM certification
by Denis Ricard

3. Background information
MCCSR/TAAM has evolved => more interpretation or technical calculations
OSFI
Looking for increased certification
Has asked the CIA to look at a formal certification
Support by:
CIA Board
AA committee
Committee on Risk Management and Capital
Lead to increase in role of AA

4. Committee on Risk Management and Capital
Set up a working group
The group has recommended a MCCSR certification model
Four components:
1. Annual enhanced Opinion
2. MCCSR memorandum
3. CSOP Standards
4. Educational note

5. 1. Opinion Actual opinion:
"I confirm that I have read the relevant guideline and annual return reporting instructions issued by the Office of the Superintendent of Financial Institutions and that this form is completed in accordance with them"
Annual opinion: must be signed by the AA and one officer
Quarterly: requires signature of a company officer

6. 1. Opinion New additional annual opinion by the actuary:
"I have reviewed the calculation of the MCCSR ratio [TAAM] of XYZ Inc. as at December 31, XXX, including the determination of the required and available capital. These calculations were carried out in accordance with the OSFI MCCSR Guidelines [TAAM]. In my opinion, components of the required and available capital requiring calculations have been determined appropriately, and guidelines requiring judgement are appropriately interpreted relative to the circumstances of the company."

7. The AA is not opining on appropriateness of the formulas/factors
1. Opinion
The AA is not opining on appropriateness of the formulas/factors

8. 2. MCCSR memorandum Support of the Opinion
Areas where the AA has applied material judgement or performed technical calculations
Outline specific issues, explain the interpretation and the underlying rationale
Not intended to be long and detailed (high level)
Prepared as a file note for the appointed actuary (included in the AA report)

9. 3. CSOP standards
New section in Practice-specific standards for insurers
short (2 pages)
Various steps the actuary should follow in providing the certification
Scope / Method / Opinion

10. 4. Educational note Provide guidance: Appropriate practice
Documentation in memorandum
How to interpret the guidelines

11. 4. Educational note Examples of areas of interpretation:
risk pass-through
participating insurance
index-linked products
seg fund guarantees
new mortality risk formula
reinsurance
Tier 1 and Tier 2 classification

12. Next steps Is currently being circulated at various committees
Discussion at this meeting
Circulate to membership in July
Comments end of August
Finalise document
Proposal at AA seminar
Hopefully effective year end 2005

13. Questions ?