Canada’s life insurance supervisor urged to ‘tighten up’ quality control

The body responsible for supervising the safety
and soundness of life insurers in Canada has been told that its
management oversight needs to be strengthened in order to ‘tighten
up’ quality control.

The recommendation came in an internal audit of
the Life Insurance Group (LIG) that is part of Canadian regulator,
the Office of the Superintendent of Financial Institutions’ (OSFI).
 

According to the audit report, LIG’s supervisory
teams followed OSFI’s methodology as required. However, in their
analysis of key environmental and industry risk factors, their
potential impact and linkages to the institution’s business profile
did not always “clearly demonstrate” the supervisory teams’
risk-based thinking and rationale.

The audit report also noted “instances”- where
the appropriate priority may not have been given to reviewing the
higher net risk activities.

The report offered several recommendations.
Among these, it said section notes need to support the analysis of
the institution’s significant key inherent risks, key controls and
factors that increase or decrease the level and direction of net
risk.

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