TOR-MOWJT2MKT-027 Canadian Institute of Actuaries Canadian Institute of Actuaries L’Institut canadien des actuaires L’Institut canadien des actuaires 2008 Seminar for the Appointed Actuary Colloque pour l’actuaire désigné 2008

2008 Seminar for the Appointed Actuary Colloque pour l’actuaire désigné TOR-MOWJT2MKT-027 Adoption of IFRS in Canada IAS/IFRS will be adopted as CGAAP in Canada effective January 1, 2011IAS/IFRS will be adopted as CGAAP in Canada effective January 1, 2011 Liability contracts will be governed by different IAS/IFRSsLiability contracts will be governed by different IAS/IFRSs 1.Insurance contracts governed by IFRS 4 2.Financial instruments governed by IAS 39 3.Service contracts governed by IAS 18 Under Phase 1, insurance contracts may be valued in accordance with existing local standards (e.g. CALM in Canada for life insurers)Under Phase 1, insurance contracts may be valued in accordance with existing local standards (e.g. CALM in Canada for life insurers)

2008 Seminar for the Appointed Actuary Colloque pour l’actuaire désigné TOR-MOWJT2MKT-027 The role of the Canadian Institute of Actuaries We believe strongly in the role of the Appointed Actuary and the benefits it has brought to Canadian insurers in the areas of solvency, risk management, policyholder governance and financial oversight and disclosureWe believe strongly in the role of the Appointed Actuary and the benefits it has brought to Canadian insurers in the areas of solvency, risk management, policyholder governance and financial oversight and disclosure The increasing aspect is likely to come from the more prevalent use of models and risk based assessment techniques to assess regulatory required capital and asset adequacy and to determine potential adjustments to available capitalThe increasing aspect is likely to come from the more prevalent use of models and risk based assessment techniques to assess regulatory required capital and asset adequacy and to determine potential adjustments to available capital With respect to IFRS, the two roles for the Canadian Institute of Actuaries are (1) influencing development of IAA guidance that has transnational application (2) development of guidance papers (e.g. educational notes) on application of IFRS to Canadian situationsWith respect to IFRS, the two roles for the Canadian Institute of Actuaries are (1) influencing development of IAA guidance that has transnational application (2) development of guidance papers (e.g. educational notes) on application of IFRS to Canadian situations

2008 Seminar for the Appointed Actuary Colloque pour l’actuaire désigné TOR-MOWJT2MKT-027 The role of the CIA (cont’d) Between now and 2011, the CIA intends to publish educational notes with the explicit assertion that the guidance is consistent with CIA SoP and IFRSBetween now and 2011, the CIA intends to publish educational notes with the explicit assertion that the guidance is consistent with CIA SoP and IFRS The CIA strongly supports the IAA in its efforts to create high quality actuarial guidance that will be used around the world by actuaries doing work under IFRSThe CIA strongly supports the IAA in its efforts to create high quality actuarial guidance that will be used around the world by actuaries doing work under IFRS Ideally, the CIA would like to adopt IAA guidance as our ownIdeally, the CIA would like to adopt IAA guidance as our own At this time the Practice Council does not intend to restrict the range of options. We prefer to publish guidance on how to implement the choice availableAt this time the Practice Council does not intend to restrict the range of options. We prefer to publish guidance on how to implement the choice available

2008 Seminar for the Appointed Actuary Colloque pour l’actuaire désigné TOR-MOWJT2MKT-027 What is the CIA actively doing? The CIA’s success factors in preparing for the implementation of IFRS in Canada, include the followingThe CIA’s success factors in preparing for the implementation of IFRS in Canada, include the following –Knowledge transfer from the various subject matter experts within the CIA to the appropriate CIA committees –Education of the membership –Avoidance of duplication of effort –Effective communication, internally and externally to the CIA –Review of all relevant SOPs and guidance and timely implementation of any amendments that might be required –Working closely with the Actuarial Standards Board (ASB), AcSB and OSFI

2008 Seminar for the Appointed Actuary Colloque pour l’actuaire désigné TOR-MOWJT2MKT-027 What is the CIA actively doing? (cont’d) The Practice Council will deal with IFRS matters within Canada and be responsible for the normal process for submission by the CIAThe Practice Council will deal with IFRS matters within Canada and be responsible for the normal process for submission by the CIA The current process for international submissions by the CIA will continue to be under the responsibility of the Committee on International RelationsThe current process for international submissions by the CIA will continue to be under the responsibility of the Committee on International Relations The initial review of all IASP is on-going and will be completed over the next six weeksThe initial review of all IASP is on-going and will be completed over the next six weeks

2008 Seminar for the Appointed Actuary Colloque pour l’actuaire désigné TOR-MOWJT2MKT-027 Task Force on International Accounting & Actuarial Standards The CIA commented in July 2008 on the exposure draft “April 2008 Exposure Draft – Adopting IFRS in Canada” prepared by the AcSBThe CIA commented in July 2008 on the exposure draft “April 2008 Exposure Draft – Adopting IFRS in Canada” prepared by the AcSB The CIA commented in June 2008 on the re-exposure draft “2008 Exposure Draft – Measurement of Liabilities for Insurance Contracts: Current Estimates and Risk Margins” prepared by the IAA’s Risk Margin Working Group (“RMWG”) on the measurement of liabilities for insurance contractsThe CIA commented in June 2008 on the re-exposure draft “2008 Exposure Draft – Measurement of Liabilities for Insurance Contracts: Current Estimates and Risk Margins” prepared by the IAA’s Risk Margin Working Group (“RMWG”) on the measurement of liabilities for insurance contracts The CIA commented in November 2007 on the discussion paper entitled, “Discussion Paper: Preliminary Views on Insurance Contracts” prepared by the IASBThe CIA commented in November 2007 on the discussion paper entitled, “Discussion Paper: Preliminary Views on Insurance Contracts” prepared by the IASB

2008 Seminar for the Appointed Actuary Colloque pour l’actuaire désigné TOR-MOWJT2MKT-027 Committee on Risk Management & Capital Requirements This committee furthers the development of actuarial techniques in the area of risk management for life and P&C insurance and develops appropriate measurement bases for risk and capital as well as working with regulators in their development of capital requirementsThis committee furthers the development of actuarial techniques in the area of risk management for life and P&C insurance and develops appropriate measurement bases for risk and capital as well as working with regulators in their development of capital requirements Paper published – “Risk Assessment Models”, August 2008Paper published – “Risk Assessment Models”, August 2008

2008 Seminar for the Appointed Actuary Colloque pour l’actuaire désigné TOR-MOWJT2MKT-027 Potential changes to CIA guidance The CIA expects a high level of comparability and consistency of practiceThe CIA expects a high level of comparability and consistency of practice By the end of 2009 guidance will be needed with respect to at least the followingBy the end of 2009 guidance will be needed with respect to at least the following –The classification of contracts into the three primary categories –Testing of liability adequacy –Current estimates –Discretionary participation features –The valuation and presentation of reinsurance –Discounted future tax provisions and foreign exchanges

2008 Seminar for the Appointed Actuary Colloque pour l’actuaire désigné TOR-MOWJT2MKT-027 Potential changes to CIA guidance (cont’d) –The requirement to, or not to, separate embedded derivatives and to, or not, to unbundle deposit components of insurance contracts –The valuation of policy contracts falling under IAS 39 (e.g. deposit-type policies, investment contracts and embedded derivatives that have to be separated) –The valuation of service contracts IAS 18

2008 Seminar for the Appointed Actuary Colloque pour l’actuaire désigné TOR-MOWJT2MKT-027 Disclosure By December 31, 2008 the implementation of IFRS by 2011 is expected to require additional disclosure requirements such as the company’s plans for convergence and what effects the enterprise anticipates will arise with the change. On December 31, 2009 there will be the same disclosures as in 2008 but with a greater degree of quantificationBy December 31, 2008 the implementation of IFRS by 2011 is expected to require additional disclosure requirements such as the company’s plans for convergence and what effects the enterprise anticipates will arise with the change. On December 31, 2009 there will be the same disclosures as in 2008 but with a greater degree of quantification The Canadian Performance Report Board is developing Best Practice Guidance – Fall 2008The Canadian Performance Report Board is developing Best Practice Guidance – Fall 2008