New framework will guide the development of insurance regulations
Canada lawmakers have revealed a new framework that will dictate changes being made to the country’s insurance regulations. The initiative is part of a global financial services overhaul of which Canada is a significant part. The global endeavor aims to impose stricter capital and liquidity regulations on banks and will have an impact on the insurance industry as well. By announcing the new regulatory framework, Canada officials are offering insurance industry officials with the opportunity to provide insight that could shape the country’s insurance regulations.
Insurers encouraged to participate in development of new regulations
The Canadian insurance industry will be able to provide information and insight on the inner machinations of the country’s business and markets. This information will help new regulations take form. The framework aims to revamp the corporate governance, risk assessment, and capital requirements of Canada’s insurance companies. Because the framework aims to make intimate and drastic changes to the insurance industry, insurers are being encouraged to participate in the formation of new insurance regulations as much as possible.
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New regulations aim to mitigate affects of future disasters
In light of the global financial crisis of 2008 and the ongoing economic turmoil throughout much of Europe, the need for new insurance regulations is gaining momentum around the world. Banks have already begun falling under stricter regulations designed to promote transparency and mitigate the impact of any future financial disasters. Insurers are to be the focus of new regulations that will likely impact the way they do business around the world.
Life insurance sector likely to bear the brunt of impact from new regulations
Canada’s Office of the Superintendent of Financial Institutions will begin consultations with the insurance industry beginning next year. The new insurance regulations that come from the framework are expected to impact the life insurance sector the most. Other sectors will also be affected by new regulations but to a lesser degree.