OSFI and insurers working on updating Canadian earthquake guidelines

The Office of the Superintendent of Financial Institutions (OSFI) is now collaborating with Canada’s property and casualty industry to update Canada’s Earthquake Exposure Sound Practices Guideline, now 12 years old.The guideline establishes sound practices for the management and measurement of earthquake exposures, including the use of modeling to estimate a Maximum Probable Loss (PML) arising from a major earthquake.The guideline was established in May 1998 in consultation with the Insurance Bureau of Canada. OSFI indicated at the National Insurance Conference of Canada (NICC) in Montreal that it has reinstituted a working group along with the IBC to revisit the document.The committee is expected to report the results of it work back to the industry in 2011.