OSFI aims for accountability

As the Office of the Superintendent of Financial Institutions (OSFI) tabled its annual report for 1999-2000, superintendent John Palmer stressed the government regulator’s push towards accountability. “Improving OSFI’s accountability framework has been a challenging undertaking because so few precedents exist within the public sector and virtually none available within the regulatory community,” says Palmer. “Therefore, I am particularly pleased with the steady progress that has been made in developing processes to evaluate how well OSFI is carrying out its legislative mandate.”

Among the measures undertaken in the past year were the creation of a Quality Assurance and Performance Standards division and the implementation of performance standards for regulatory approvals.

Another step was Canada’s involvement with the International Monetary Fund (IMF) where it was the first industrialized country to submit to the Financial Sector Assessment Program. The IMF peer review “concluded there was a high degree of compliance with applicable standards, which has contributed to Canada’s stable financial system”.

On the property and casualty insurance front, the report notes: “Given the pressure to enhance returns on equity, OSFI-supervised institutions (which include 95 federally-incorporated and 113 foreign branch insurers) have been seeking to reduce or improve the efficiency of their capital. We saw an increasing trend on the part of foreign-owned property and casualty insurance companies to repatriate capital in excess of regulatory minimums.”