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LICAT Public Disclosure Requirements

Companies are required, at minimum, to maintain a Core Ratio of 55% and a Total Ratio of 90%. OSFI has established supervisory target levels of 70% for Core and 100% for Total capital.

Definitions of terms can be found in Guideline A: LICAT – Life Insurance Capital Adequacy Test.

Qualitative Analysis of Solvency Ratio (Period over Period)

The Total and Core Ratios changes in 2020 are primarily attributed to retrocession of blocks of business, change in interest rates and the optimization of capital usage.

(thousands of dollars, except percentages)

Current Period Prior Period Change -%
Available Capital (AC1 +B) (AC) 1,097,114 909,457 21%
Tier 1 Capital (AC1)
Tier 2 Capital B
Surplus Allowance and Eligible Deposits (SA + ED) 6,504,594 6,155,953 6%
Base Solvency Buffer (BSB) 5,993,142 6,008,878 0%
Total Ratio ([AC + SA + ED]/BSB) x 100 127% 118% 8%
Core Ratio ([AC1 + 70% SA + 70% ED] / BSB) x 100 90% 83% 8%

Companies are required, at minimum, to maintain a Core Ratio of 55% and a Total Ratio of 90%. OSFI has established supervisory target levels of 70% for Core and 100% for Total capital.

 

Definitions of terms can be found in Guideline A: LICAT – Life Insurance Capital Adequacy Test.

Qualitative Analysis of Solvency Ratio (Period over Period)

The Total and Core Ratios changes in 2019 are primarily attributed to the strengthening of assumptions on a portion of the foreign branch business, deployment of excess capital on inforce block transactions and recurring new business. The capital ratios remain above RGA’s capital targets.

(thousands of dollars, except percentages)

Current Period Prior Period % Change
Available Capital (AC1 +B) (AC) 909,457 1,207,073 -25%
Tier 1 Capital (AC1)
Tier 2 Capital B
Surplus Allowance and Eligible Deposits (SA + ED) 6,155,953 4,782,439 29%
Base Solvency Buffer (BSB) 6,008,878 4,797,052 25%
Total Ratio ([AC + SA + ED]/BSB) x 100 118% 125% -6%
Core Ratio ([AC1 + 70% SA + 70% ED] / BSB) x 100 83% 89% -7%