Portrait of Dan Thornton

We are in a period of significant change for the industry and it is essential that Assuris continues to serve policyholders and the industry by retaining its focus on solvency risk and resolution.

The implementation of IFRS 17 is a fundamental change to a life insurance company’s financial reporting. This change will have implications to our members’ business model, the products they sell, their investment strategies and their use of reinsurance.

This will require Assuris to have an in-depth understanding of what the new accounting under IFRS 17 means for the industry and for our risk detection and resolution analysis.

Solvency Risk Detection

The challenge will be to ensure that we have the key information to understand any new solvency risks in the industry. We believe that IFRS 17 will provide better accounting disclosure and we are working with the regulators to ensure that the revised regulatory disclosure also increases transparency and improves our ability to identify solvency risks.

To respond to the new disclosures Assuris, will need to develop a new understanding of how to identify those solvency risks. This will require us to update our risk detection processes and change our company risk assessments.

Resolution

IFRS 17 will also have an impact on resolution. For example, certain blocks of business with long term guarantees may be more difficult to transfer from the failed company to another solvent company. We need to understand these changes and incorporate that understanding into our continuing work to evolve the resolution regime in Canada.

If a life insurance company fails, we want to ensure a stable, effective and timely resolution process. Assuris will continue to work towards strengthening the system for resolution through advocating for effective legislation and guidance.

Assuris has been successful and has experience with a traditional liquidation of a failed life insurance company. We are now focused on developing a solvent resolution process.

The resolution of a company while it is still solvent may achieve better results for all stakeholders. It will shorten the time to complete the resolution of a life insurance company as it will avoid formal liquidations. This, in turn, will help mitigate the negative impact and reputational risk for the insurance industry. A solvent resolution will maintain confidence and stability in the system. For the industry, it will also reduce the costs of resolution and ultimately minimize potential losses to policyholders.

The future is busy but exciting.

We will emerge with a better understanding of the new accounting standards. We will have a better understanding of solvency risk, a better resolution process and ultimately better protection for policyholders if a life insurance company fails.

Assuris is a strong organization with a committed management team and a dedicated Board.

Acknowledgments

I take this opportunity to thank our member companies for their ongoing support. Specifically, I want to thank the senior industry executives for taking the time to meet with Assuris to discuss the IFRS 17 implementation and the implications for the industry. This also includes the members of our Industry Advisory Committee. Their expertise and insight on industry issues are invaluable.

I want to recognize Doug Hogeboom who retired from the Assuris Board of Directors in 2018. Doug made a significant contribution serving nine years as a director and four of those years as Chair of the Board. He handed over a strong Board that is diligent and skilled in ensuring the success of the organization.

I also welcome our new directors Greta Cusworth and Frank Swedlove. Their varied experience will be a tremendous asset to our Board.

Signature of Dan Thornton

Daniel Thornton
Chair of the Board of Directors

Assuris is a strong organization with a committed management team and a dedicated Board.