CIA.FCT-2

Reading: Guidance for the 2023 Reporting on Capital and Financial Condition Testing for Life, P&C, and Mortgage Insurers (Candidates are not responsible for details related to life assurance or mortgage insurance companies, nor for Sections 1 and 3 and Appendices A, B, and C.)

Author: Canadian Institute of Actuaries

BA Quick-Summary: FCT 2 The 2023 updates to the Minimum Capital Test (MCT) align with IFRS 17, introducing revised definitions (e.g., liabilities for incurred claims), credit risk updates, and guidance on seasonal capital variations—especially for reinsurance and risk-sharing pools. For Financial Condition Testing (FCT), IFRS 17 must be used throughout the projection period. Key focus areas include adverse scenario design, the impact of recent events, and new requirements for standardized inflation stress tests.

Study Tips

Everything in this reading is covered in other readings. This reading provides some updates on IFRS17 as well as the FCT, but all of the relevant information regarding FCT is already in CIA.FCT-1. The following sections of the source text are excluded from the syllabus:

• Section 2: Life regulatory capital requirements
• Section 4: Mortgage Insurance regulatory capital requirements
• Appendices A, B, and C

Estimated study time: zero minutes

BattleTable

No past exam questions are available for this reading.

reference	part (a)	part (b)	part (c)	part (d)

In Plain English!

See CIA.FCT-1.