OSFI.SupFrm Flashcards
Briefly explain the main responsibility of OSFI relationship manager
Main point of contact between FRFI and OSFI
→ responsible for maintaining an up-to-date risk assessment of the FRFI
FRFI = Federally Regulated Financial Institution
OSFI = Office of the Superintendent of Financial Institutions
Briefly describe 4 key principles
OSFI uses in its risk assessment
of insurance companies.
- identify material risks
- should be forward-looking & allow for early intervention
- use sound predictive judgment
- understand risk drivers
- differentiate between inherent risks & management of those risks
- dynamic adjustment
- assess whole institution by calculation a CRR (Composite Risk Rating)
Briefly describe 3 primary concepts of OSFI's risk assessment
of insurance companies.
Significant activities
- Inherent risk
Quality of risk management
- NR (net risk)
- importance & ONR (Overall Net Risk)
Earnings
Capital
Liquidity
- risk matrix & CRR (Composite Risk Rating)
Briefly explain the 4 steps that OSFI follows in risk assessment process.
STEP 1: identify significant activities
STEP 2: assess inherent risks and quality of risk management
STEP 3: calculate NR (Net Risk) for each significant activity using Appendix C
STEP 4: use risk matrix to assess intervention status and CRR (Composite Risk Rating) - Appendices D & E
Briefly describe what is meant by significant activities
Anything that is fundamental to to the business model (LOB, unit, process,…)
It’s the fundamental risk assessment concept within the supervisory framework
2 levels of control at which OSFI assesses the quality of risk management
Operation management
– basically the management of day to day operation to insure
risk are managedOversight functions
– should look at the risk at an enterprise wide level and assess risk
that are at that level
Identify the 3 core supervisory processes in risk assessment.
- Planning
- Execution (& updating risk profile)
- Reporting & intervention