How harmonization fits within the regulators’ strategic plans

Over the next three years, Canada’s insurance regulators plan to focus on ways to harmonize regulation, although it’s unclear how that will be applied.

It’s all part of the Canadian Council of Insurance Regulators (CCIR)’s Strategic Plan for 2026-29, published in May. The 17-page document sets out three main strategic priorities:

• identifying, monitoring, and responding to industry risk
• promoting alignment of regulatory expectations
• enhancing CCIR governance to improve efficiency and effectiveness.

“This Strategic Plan reflects a deliberate focus on core regulatory activities and strong partnerships, ensuring regulators are well positioned to address emerging risks and support confidence in the insurance marketplace,” CCIR Chair Patrick Déry comments.

The strategic plan notes CCIR is made up of provincial insurance regulators across the country, each with its own structures, mandates and risk profiles. It goes on to note four different levels of harmonization between the provincial regulators:

• Coordination – the most basic form of harmonization, involving regulators sharing information
• Mutual recognition – A more integrated step. Here, jurisdictions agree to accept each other’s standards or licensing decisions as effectively equivalent, even if the rules differ
• Convergence – Jurisdictions begin to independently evolve toward similar policies, standards or outcomes.
• Standardization – The most advanced form of harmonization. A single set of rules, definitions, or processes is applied uniformly across jurisdictions. This may require legislative changes.

The CCIR’s strategic plan leaves it open which level of harmonization might be applied to any given situation.  

“CCIR will assess the appropriate level of regulatory alignment to pursue, when considering collaborative activities or initiatives,” the strategic plan states. “Each model will be applied where most appropriate to achieve regulatory alignment.”

Regarding risk monitoring, CCIR plans to continue and expand its efforts to collect data in support of its regulatory activities, including its Annual Statement on Market Conduct.

Current risks on the regulators’ radar include economic volatility, climate change and natural catastrophes, and tech innovation and advancement.

“The operating environment continues to evolve rapidly,” Déry says. “Economic and geopolitical volatility, increasing natural catastrophe risk, technological change, and rising consumer expectations place sustained pressure on the insurance sector and its regulators. In this environment, effective and coordinated regulation is essential to maintaining a resilient insurance marketplace that protects Canadians, supports economic stability, and contributes to a strong and resilient Canada.”

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To promote alignment, CCIR will “conduct cooperative supervision,” the strategic plan says. In addition, it will look for ways to align with International Standards and Financial Sector Assessment Program recommendations.

CCIR will also conduct quarterly meetings with the Property and Casualty Insurance Compensation Corporation, which monitors the financial health of insurers and is currently consulting with the federal government on a proposed earthquake backstop, an ‘existential’ threat to the industry.

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As for improving governance, the strategic plan calls for a review of CCIR’s working group committees to make sure their work “supports desired regulatory outcomes.”

David Gambrill

David has twice served as Canadian Underwriter’s senior editor, both from 2005 to 2012, and again from 2017 to the present.