Canadian reinsurers here to stay after Bill C-37

Representatives of the Canadian reinsurance market assured delegates of the A.M. Best Canadian conference that their Canadian branches are here to stay, despite recent changes to the Insurance Companies Act contained in Bill C-37.

Changes to Part 13 of the act address whether reinsurers must to report to the federal regulator, the Office of the Superintendent of Financial Institutions (OSFI), when they are insuring “in-Canada” risks.

Before the amendment, it was illegal for foreign insurers that are unlicensed in Canada to offer insurance products in Canada without a license. But now with the changes introduced in Bill C-37, foreign insurers can write business in Canada without a license, essentially making Canadian branches seemingly redundant.

Jean-Jacques Henchoz, CEO of Swiss Re Canada, assured his audience that Canadian branches still hold value. “I think we are acknowledging that there is market specificity here and we’re here for the long term,” he said.

“There is still business to do here and opportunities,” he noted. “I don’t think that Part 13 will change anything from the current set-up.”

Henchoz said there might be some instances in which parts of the organization are re-organized from outside of Canada.

“There is a reinsurance market here — it is only 1.5% of the global reinsurance markets, so it’s not huge — but there’s specificity here to stay for the long term,” he told delegates.

John Phelan, chairman and CEO, of Munich Reinsurance America, Inc., nodded and simply said: “We’re here to stay.”