An audit of how Canada's financial regulator fared in terms of properly supervising life insurers during the financial crisis (specifically from April 2008 to Dec. 2011) has generally awarded the regulator high marks, but suggested that it could have done a better job of documenting what it was doing.
The Office of the Superintendent of Financial Institutions notes that the framework it uses to do its work has since been revised, and that the audit's recommendations were accepted and either have been implemented or are in the process of being implemented.
"Since the end-date of the audit period, significant staffing changes, including the addition of new staff, have been made to the supervisory teams for the conglomerates," it said. "All new staff, including senior staff, have either already taken or will be taking the Supervisory Framework course..."
The audit found that OSFI's supervisory teams generally followed the regulator's methodology as required, and gathered good analytical information about the insurers.
But it said that "the analysis of key environmental and industry risk factors, their potential impact, and linkages to the institution's business profile did not always clearly demonstrate the supervisory teams' risk-based thinking and rationale."
For example, it suggested that there were times when OSFI was not necessarily prioritizing oversight of the highest net-risk activities. It also said that OSFI would determine the importance of different activities to specific insurers based on quantitative factors, and not always pay attention to qualitative factors.