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ARCHIVE | Criteria | Insurance | Life: Assessing Canadian Life Insurers' Innovative Tier I Capital Sep 01
Standard & Poors, Sep 2001
Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.
Research Type: Commentary
Criteria articles describe the thought process and methodology Standard & Poor's analysts use in determining ratings. These commentary pieces discuss both the quantitative (economic and financial) and qualitative (business analysis and caliber of management) aspects of the analysis, as well as legal issues.
Abstract
Canadian life insurance regulators have revised the rules on what qualifies as capital. In August 2001, the Office of the Superintendent of Financial Institutions (OSFI) released its final document on the Principles Governing Inclusion of Innovative Instruments in Tier 1 Capital for Canadian life insurance companies. This document sets out the parameters under which Canadian life insurance companies will be allowed to issue innovative Tier 1 instruments or Canadian hybrids, and follows in the footsteps on what has been allowed within the Canadian banking sector. In early 2000, domestic banks began issuing hybrids starting with the C$900 million capital trust securities (TD CaTS) offered by The Toronto-Dominion Bank and the C$500 million capital trust securities (Scotia BaTS) launched by Bank...
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