Summary of remarks by Peter Routledge at the National Insurance Conference of Canada

On September 27, 2023, the Superintendent of Financial Institutions, Peter Routledge, sat down for a fireside chat with Kathleen Butterfield of Fasken Law during the 15th Annual National Insurance Conference of Canada.

He spoke about the Office of the Superintendent of Financial Institutions’ (OSFI) work on risk management and crafting regulations that suit the evolving regulatory climate.

Superintendent Routledge noted a few key risks that concern him for the property and casualty insurance industry, notably natural disasters and digitalization. Regarding natural disasters, he noted that a major event could impact a federally regulated financial institution and highlighted how OSFI monitors risk through Guideline B-9 and expects federally regulated financial institutions to hold adequate capital.

Similarly, cyber-attacks represent another big risk for the property and casualty industry, both from an operational standpoint and in terms of insuring against cyber risks. However, no matter the risk, OSFI relies on active supervision and ongoing dialogue.

In terms of the pace of consultations and new guidelines, Ms. Butterfield asked what the property and casualty industry should prioritize and whether there is a risk of too much change. Superintendent Routledge outlined that we are living with a “new normal” when it comes to a changing risk environment. OSFI therefore must move quickly especially where new risks are emerging or existing risks are growing. And, to do this well, consulting with industry stakeholders is key.

Lastly, the Superintendent discussed the culture and behaviour risk guideline. It is a long-term approach to reducing risk in the financial system and is consistent with OSFI’s expanded mandate related to integrity. It is important for federally regulated financial institutions to continue developing, promoting and managing its desired culture. Culture often underpins an institution’s ability to make sound and ethical decisions, take prudent risks and effectively manage their risks.

The risk environment is intensifying, not slowing down. So, for the next five years, which is the rest of my term, I will not slow down.

— Peter Routledge, Superintendent of Financial Institutions