CIA (e)Bulletin/(e)Bulletin de l'ICA
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May 2018
 
 

CIA Members Collaborate on the Handbook on Economic Capital Modelling

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In March 2018, the Insurance Bureau of Canada (IBC) published the Handbook for Economic Capital Modelling (you will need to login on the members’ site), which focuses on insurance risk and its components. The result of a six-year project undertaken by the P&C Minimum Capital Test Advisory Committee Industry Working Group (IBC MAC WG), the handbook will serve as foundational educational material on the use and development of economic capital models for decision-making, even as future practices change.

The CIA has special permission to share the handbook with its members. Over 15 CIA members collaborated on this IBC project, three of whom chaired the working group: Chris Townsend (initial chair), Anne-Marie Vanier (former chair), and Jacqueline Friedland (current chair). The IBC recognizes the extraordinary amount of time and effort required to research and collaborate on this project, especially Ms. Friedland’s hard work, dedication, and leadership, which made this project possible. For a full list of CIA members who collaborated on this project, please see the handbook.

Note that as IBC prepared the handbook for publication, the International Accounting Standards Board released its final version of IFRS 17 (International Financial Reporting Standards for insurance contracts). It is anticipated that IFRS 17 will be effective in Canada on January 1, 2021. Given the timing of the release of the new accounting standard and the uncertainty with respect to its interpretation as of the date of the handbook’s publication, implications, if any, of the new accounting standards were not considered in developing the handbook.

We hope that Canadian P&C companies at all stages of the economic capital model development process will find this educational document useful. 

 

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