OSFI quarterly update — OSFI eliminates the requirement for peer review of appointed actuaries for federally regulated insurance companies

On September 11, 2025, the Office of the Superintendent of Financial Institutions (OSFI) announced significant amendments to Guideline E-15, which governs the legal requirements, qualifications, and peer review obligations of appointed actuaries for federally regulated insurance companies. These amendments will come into force January 1, 2027. The key change to E-15 announced are the mandatory peer review requirement for the work of appointed actuaries will be removed, although peer reviews will still be required up until that date.

The peer review requirement was introduced in 2003 to enhance actuarial practices, particularly in the valuation of liabilities and financial condition testing. OSFI is now satisfied that these objectives have been met and that the ongoing costs to the industry outweigh the prudential benefits.

The peer review requirements for federally regulated insurers that are being eliminated by this update are significant. Currently, peer reviews are undertaken every three years by actuaries independent of the insurer and preferably independent of the insurer's external audit firm actuaries and rotated every six years. The scope of the peer reviewer includes providing a written report to the insurer's audit committee and directly to OSFI that contains:

• an evaluation of the appointed actuaries’ compliance with accepted actuarial practice and OSFI’s regulatory requirements;
• a review of material changes affecting actuarial analyses, including changes in company operations, valuation assumptions, methodologies, or models;
• an assessment of the adequacy of procedures, systems, and reliance on the work of others where appointed actuaries may increasingly depend on inputs from other departments; and
• discussion and validation of assumptions, methods, and scenarios used in financial condition testing.

OSFI stated that the changes are intended to reduce regulatory burden and generate significant cost savings for insurers, while maintaining effective oversight. OSFI's industry day on September 25, 2025 will feature the opportunity to ask questions about this change.

For further information, please contact the author.