1. OCCA 2006 Spring Meeting P&C Financial Reporting Committee Claudette Cantin June 19, 2006

2. P&C Financial Reporting Committee OVERVIEW ― Mandate and membership ― 2005/2006 Priorities and Update ― Current Projects DCAT Fair Value Materiality PfADs ― Liaison ― CIA Committee on Risk Management and Capital Requirements (RMCR) Claudette Cantin June 19, 2006

3. P&C Financial Reporting Committee MANDATE With respect to property and casualty insurance company financial reporting and valuations for any purpose, the committee is to study, organize discussion of, propose revisions to, and, on request, advise members about standards of practice; and promote continuing education. The committee, in collaboration with other CIA committees, is to further the development of actuarial techniques in the areas of risk management, the development of appropriate measures for risk and capital and work with regulators in the development of capital requirements. Claudette Cantin June 19, 2006

4. P&C Financial Reporting Committee MEMBERSHIP Claudette Cantin June 19, 2006 Claudette Cantin, Chair [2005]Isabelle Périgny, [2005] Shawn Doherty, Vice-Chair [2005] Ernest Segal, [2003] Xavier Bénarosch, [2005]Katie Suljak, [2003] Pierre Dionne, [2004]Christopher Walton, Not enrolled with CIA [2003] Linda Goss, [2003]Patricia Hladun, Regulatory Representative [2004] Kevin Lee, [2005]Denis Poulin, Regulatory Representative [2005] Jean-Marc Léveillé, [2005]PSC Liaison: Marthe Lacroix

5. P&C Financial Reporting Committee MEMBERSHIP ― Working Group / Sub-Committees DCAT (Linda Goss, Chairperson) Fair Value (Xavier Bénarosch, Chairperson) Materiality (Jean-Marc Léveillé, Chairperson) Discounting (Katie Suljak, Chairperson) ― Minutes Volunteers Anne-Marie Klein-Lee Laura Morrison Claudette Cantin June 19, 2006

6. P&C Financial Reporting Committee 2005/2006 PRIORITIES ― Dynamic Capital Adequacy Testing Review and Update the 1999 Educational Note Completion Date: Spring/Summer 2006 ― Fair Value of Liabilities Prepare report on potential impact for P&C Insurers Completion Date: Summer/Fall 2006 ― Standard of Materiality Research existing work on materiality Issue guidance Completion Date: 2006/2007 Claudette Cantin June 19, 2006

7. P&C Financial Reporting Committee 2005/2006 PRIORITIES ― Ceded Liabilities Review guidance to be issued by Task Force on Reinsurance Update standards or issue additional ed. notes, if necessary Completion Date: ?? ― Discounting PfAD - Review current practices and current guidance Revised Educational Note on Discounting where needed. ― Monitor Development in Canadian and International actuarial scenes ― Improve Guidance Available to members Claudette Cantin June 19, 2006

8. P&C Financial Reporting Committee 2005/2006 UPDATE ― Revisions to the Standards of Practice (Section 2100) ― Discounting Ed. Note (July 2005) ― Ed. Note on Consideration for Future Income Taxes in the Valuation of Policy Liabilities (July 2005) ―Year-end and DCAT reminder – Memorandum ― Survey on PfAD’s – current practice and need for additional guidance Claudette Cantin June 19, 2006

9. P&C Financial Reporting Committee 2005/2006 UPDATE ― Appointed Actuary Certificates ― Revisions to the Standards of Practice (Section 2100) ― Differences in CIA Standards Approaches by Areas of Practices ― OSFI Guideline E-15 - Appointed Actuary: Legal requirements, qualifications and external review ― Work with IBC FAC Tax group re: Fair Value Claudette Cantin June 19, 2006

10. P&C Financial Reporting Committee PRIORITIES UPDATE ― Dynamic Capital Adequacy Testing Core section and P&C Risk Categories are complete and accepted by PCFRC Life section on risk categories being translated Required changes to SOP completed Next step: translation and approval by PSC Due process Claudette Cantin June 19, 2006

11. P&C Financial Reporting Committee PRIORITIES UPDATE ― Fair Value of Liabilities New accounting basis fiscal years October 2006 and after (CICA Section 3855 – Recognition and Measurement) OSFI Guideline D-10 - Accounting for Financial Instruments Designated as “Held for Trading” Membership awareness / Town hall meeting ? Impact on discounted liabilities and DCAT Educational Note is being drafted Claudette Cantin June 19, 2006

12. P&C Financial Reporting Committee PRIORITIES UPDATE ― Standard of Materiality Need additional guidance Reviewing the work of the AAA on Materiality concepts and others Next step: What do we need to communicate? Claudette Cantin June 19, 2006

13. P&C Financial Reporting Committee PRIORITIES UPDATE ― PfAD Completed Survey at AA Seminar in 2005 Compiled the results Plan to publish results Fair Value may affect margins Next step: What do we need to change in the current guidance? Claudette Cantin June 19, 2006

14. P&C Financial Reporting Committee LIAISON ― IBC Financial Affairs Cttee ― OSFI Advisory Cttee ― Various CIA committees/task forces ― Review all CIA Committees, Task Forces and other actuarial organizations to assess need to have liaison Claudette Cantin June 19, 2006

15. P&C Financial Reporting Committee P&C Sub-Committee of CIA Committee on RMCR ― After completion of DCAT project, responsibility to be moved to RMCR ― Further the development of actuarial techniques in the area of risk management ― Develop appropriate bases for risk and capital ― Work with regulators in development of capital requirements ― Liaise with PCFRC ― Chris Townsend, Chair ― NEED VOLUNTEERS Claudette Cantin June 19, 2006

16. P&C Financial Reporting Committee THANK YOU QUESTIONS ? Claudette Cantin June 19, 2006