QUEBEC CITY, Dec. 17, 2020 /CNW Telbec/ – On December 17, 2020, the Autorité des marchés financiers du Québec (AMF) published a revised Capital Adequacy Requirements for Life and Health Insurance (“CARLI”) Guideline, which will become effective on January 1, 2021.
Among other things, this amendment modifies the capital treatment of property & casualty subsidiaries held by life and health insurers. As a result, while the total solvency ratio remains unchanged (125% as at September 30, 2020), there is a downward impact on the Core Ratio of iA Financial Corporation (TSX: IAG) and on its potential capital for deployment.
More specifically, should the full impact of this change apply as at September 30, 2020, the Core Ratio would decrease from 83% to 76%, a level which remains above both regulatory and iA Financial Corporation’s internal requirements. The potential capital for deployment, which was about $850 million as at September 30, 2020, would be reduced to approximately $250 million, by increasing the leverage ratio in accordance with regulatory constraints. However, it is important to note that the impact of this regulatory change will be spread over a transition period of five quarters and that it will be mitigated by ongoing organic capital generation.
Indeed, iA Financial Corporation’s ability to generate profits is not affected by this regulatory change and organic capital generation should therefore continue at the same pace.
Caution Regarding Forward-looking Statements
This news release may contain statements relating to strategies used by iA Financial Corporation or statements that are predictive in nature, that depend upon or refer to future events or conditions, or that include words such as “may”, “will”, “could”, “should”, “would”, “suspect”, “expect”, “anticipate”, “intend”, “plan”, “believe”, “estimate”, and “continue” (or the negative thereof), as well as words such as “objective” or “goal” or other similar words or expressions. Such statements constitute forward–looking statements within the meaning of securities laws. In this news release, forward-looking statements include, but are not limited to, information concerning possible or assumed future operating results, including the possibility of generating organic capital. These statements are not historical facts; they represent only expectations, estimates and projections regarding future events and are subject to change, particularly in light of the ongoing and evolving COVID-19 pandemic, its effect on the global economy and its uncertain impact on our operations.
Although iA Financial Corporation believes that the expectations reflected in such forward-looking statements are reasonable, such statements involve risks and uncertainties, and undue reliance should not be placed on such statements. Certain material factors or assumptions are applied in making forward-looking statements, and actual results may differ materially from those expressed or implied in such statements. Factors that could cause actual results to differ materially from expectations include, but are not limited to: general business and economic conditions; level of competition and consolidation; changes in laws and regulations, including tax laws; liquidity of iA Financial Corporation, including the availability of financing to meet existing financial commitments on their expected maturity dates when required; accuracy of information received from counterparties and the ability of counterparties to meet their obligations; accuracy of accounting policies and actuarial methods used by iA Financial Corporation; insurance risks such as mortality, morbidity, longevity and policyholder behaviour, including the occurrence of natural or man–made disasters, pandemic diseases (such as the current COVID-19 pandemic) and acts of terrorism.
Additional information about the material factors that could cause actual results to differ materially from expectations and about material factors or assumptions applied in making forward-looking statements may be found in the “Risk Management” section of the Management’s Discussion and Analysis for 2019, the “Management of Risks Associated with Financial Instruments” note to the audited consolidated financial statements for the year ended December 31, 2019, the “Risk Update” section of the Management’s Discussion and Analysis for the period ended March 31, 2020, and elsewhere in iA Financial Corporation’s filings with the Canadian Securities Administrators, which are available for review at sedar.com.
The forward-looking statements in this news release reflect iA Financial Corporation’s expectations as of the date of this document. iA Financial Corporation does not undertake to update or release any revisions to these forward-looking statements to reflect events or circumstances after the date of this document or to reflect the occurrence of unanticipated events, except as required by law.
About iA Financial Corporation
Founded in 1892, iA Financial Corporation is one of the largest insurance and wealth management companies in Canada. It also operates in the United States. Its stock is listed on the Toronto Stock Exchange under the ticker symbols IAG (common shares) and IAF (preferred shares).
iA Financial Corporation is a business name and trademark of iA Financial Corporation Inc. and Industrial Alliance Insurance and Financial Services Inc.
SOURCE iA Financial Group
For further information: Investor Relations: Marie-Annick Bonneau, Work tel.: 418-684-5000, ext. 104287, Email: [email protected]; Public Relations: Pierre Picard, Work tel.: 418-684-5000, ext. 101660, Email: [email protected]