In a moderated question-and-answer session, Office of the Superintendent of Financial Institutions Superintendent Peter Routledge supported establishing some form of preplanned resolution framework for insurers that become non-viable after a catastrophic earthquake. He also reiterated that OSFI is rebalancing its risk appetite to give greater weight to growth and competition while retaining financial resilience as its primary responsibility. Earthquake risk could extend beyond the property and casualty insurance sector into the wider financial system, and a recent tabletop exercise reinforced the need for arrangements to be established before a major event. Decisions on any federal earthquake arrangement rest with governments and Parliament, while OSFI would contribute prudential expertise, risk analysis and supervisory insight. Routledge linked the broader risk appetite shift to recent adjustments to risk weights and capital requirements, the reduction in the Domestic Stability Buffer and the recognition of catastrophe bonds for certain catastrophe risks. He said risk transfer should be effective, transparent and genuinely transfer risk, without the prudential framework favoring one instrument over another. On other emerging risks, Routledge emphasized that financial institutions remain responsible for artificial intelligence decisions and must maintain governance, human oversight and risk management as adoption expands. He also described Guideline B-15 as a prudential tool for assessing climate-related financial exposures rather than a mechanism for directing investment toward or away from particular sectors.
Canada’s Office of the Superintendent of Financial Institutions backs preplanned earthquake resolution framework while rebalancing risk appetite toward growth
Office of the Superintendent of Financial Institutions Superintendent Peter Routledge backed some form of preplanned resolution framework for insurers rendered non-viable by a catastrophic earthquake, with governments and Parliament responsible for any federal arrangement. He reiterated OSFI’s shift toward giving growth and competition greater weight while preserving resilience, citing targeted capital changes, the Domestic Stability Buffer reduction and recognition of catastrophe bonds. Institutions remain responsible for managing risks from artificial intelligence, climate exposures and new risk-transfer tools.