Regulatory Capital (Insurance Companies) Regulations

The Regulatory Capital (Insurance Companies) Regulations, made pursuant to the Insurance Companies Act, define the regulatory capital of a company. These regulations were made by His Excellency the Governor General in Council on August 31, 1992, and come into effect as of September 1, 1992.

The regulations interpret "designated entity" and provide that liabilities include deferred taxes and subordinated indebtedness. They also define "minority interest," which refers to an equity interest held by a person other than the company or entities controlled by it.

The regulatory capital is calculated using the formula A - B, where A is the total of assets and minority interests, and B is the amount of goodwill. The regulations specify that certain types of securities can be included in the calculation if they meet specific criteria regarding their terms, issuance, and redemption.

The regulations aim to provide a clear framework for insurance companies to determine their regulatory capital, which is essential for ensuring the financial stability and solvency of these entities. By establishing a standardized approach to calculating regulatory capital, these regulations help to promote consistency and transparency in the insurance industry.