SECTION VI Detailed instructions are provided to assist insurers/societies in clarifying filing requirements; they are not provided for every page or field in the LIFE return. The instructions are applicable to all insurers/societies regardless of their jurisdiction of incorporation, unless specified otherwise in this section or in Section V - Jurisdictional Requirements. Reference page numbers in the left-hand column of certain pages of the LIFE return indicate the supporting exhibit pertaining to the particular statement item. For these items, the insurer/society should also refer to the instructions in this section for the page number of the supporting exhibit. All references to pages refer to pages of the LIFE return. Insurers/societies are required to include the reference numbers to applicable note disclosures in the Financial Statement (FS) Notes Reference, in the second column on the left-hand side of certain pages of the LIFE return. Any reference to section refers to a part of these instructions. Statutory reference to a section of legislation will be presented as sec. Refer to Section II for instructions on how to embed objects within the special Excel file. Page 10.000 - Canadian Affidavit Verifying Annual Supplement Return Refer to Section V - Jurisdictional Requirements. This page applies to Canadian insurers/societies only. Pages 10.002-10.004 - Foreign Affidavits Verifying Annual Supplement Return Refer to Section V - Jurisdictional Requirements. This page applies to foreign insurers/societies only. Life Insurance Return Instructions VI-1 Revised: July 2018
Page 10.005 - Quebec Affidavit Verifying Annual Supplement Return This page applies to Canadian insurers licensed in the province of Quebec only. Page 10.010 - Contact Persons Insurers/societies are required to provide two contact persons, one for corporate information and another for statement reporting. This information will facilitate contact with the insurer/ society when questions arise from corporate matters or financial and accounting issues relating to the annual return. Page 10.010 - External Auditor Partner The name of the partner in charge of the audit is requested in addition to the name of the accounting firm. Page 10.011 - Annual Corporate Information for Insurers/Societies Licensed in the province of Quebec The full name of each director and the postal address of his/her residence (not business) must be sufficiently complete to serve as a mailing address. Page 10.012 - Annual Corporate Information for provincially incorporated or licensed insurers/societies Insurers/societies are required to provide the full name of the President/CEO and Secretary. The postal address of his/her residence (not business) must be sufficiently complete to serve as a mailing address. Page 10.013 - Corporate Information for insurers/societies provincially incorporated This page is required for all provincially incorporated insurers/societies. The committee name and listing of all committee members should be provided for each Board committee mandated by law. Additional lines can be added into the form if required. This information may be embedded into the Special Excel file. Life Insurance Return Instructions VI-2 Revised: July 2018
Page 10.020 - Shareholders - By Class of Shares - Part 1 - Common Shares This page applies to Canadian insurers only. - Line 001-020 Column 01 - Name of Beneficial Shareholder Indicate the name of the beneficial shareholders. Identify only those with at least 10% of the common shares. Shareholders should be listed alphabetically by surname; using the format surname, first name. Nominee names are not sufficient, particularly in respect of holdings of more than 10% of the voting shares. Directors and officers who are also shareholders should be included separately in this listing, even if they hold less than 10% of the shares of any class. - Line 001-020 Column 02 Address Indicate the full address including city and country of the shareholder. Page 10.030 - Shareholders By Class of Shares Part 2 Preferred Shares This page applies to Canadian insurers only. This information is required for all classes of preferred shares. A separate sheet should be provided for each class of preferred shares. Provide a description of the particular class of shares indicating the dividend rate, maturity date, cumulative features, if any, and any other characteristics of the shares. Shareholders should be listed alphabetically by surname; using the format surname, first name. - Line 001-020 Name of Beneficial Shareholder Indicate the name of the beneficial shareholders. Identify only those with at least 10% of the shares. Nominee names are not sufficient, particularly in respect of holdings of more than 10% of the voting shares. Directors and officers who are also preferred shareholders should be included separately in this listing, even if they hold less than 10% of the shares of any class. Life Insurance Return Instructions VI-3 Revised: July 2018
Page 10.033 - Corporate and Regulatory Information This page applies to foreign insurers/societies only. - Question 9 Provide details if the insurer/society is subject to any regulatory restrictions in any jurisdiction. - Question 11 Provide details of rating history if the insurer/society is rated by one of the major rating agencies for the current year (CY) and previous years (CY-1), etc. Page 10.040 - Corporate Organization Chart The corporate organization chart should show the interrelationships between the insurer/society, its immediate and ultimate parent, and all other associated corporations (upstream and downstream) that are: publicly traded companies within the group; banks and trust companies within the group; other insurance companies within the group; insurance companies in which the insurer has a controlling interest (such as joint ventures); subsidiaries of the insurer/society; or insurance management companies within the group. This information must be embedded into the Special Excel file. Foreign insurers/societies must include the percentage of voting shares held by principal shareholders as part of the organization chart of ownership downstream. Life Insurance Return Instructions VI-4 Revised: July 2018
Pages 10.050 to 10.090 - General Interrogatories These pages apply to Canadian insurers/societies only. Page 10.050 - General Interrogatories If there is insufficient space on the pages to fully respond to the questions, insurers/societies are asked to embed a file into the special Excel file if additional information is required. - Question 1.1 If the answer to the question is yes, then fill out the table and state the gross total value outstanding at the end of the year. The figures should include the gross outstanding amounts of all assets pledged as security or lodged as collateral by subsidiaries at the end of the year. The insurer/society is expected to have detailed listings for the parent and subsidiaries for review by the Regulators if requested. - Question 1.2 If the answer to the question is yes, then complete the remainder of the fields. If the answer is no, then proceed to the next question. State the highest outstanding month-end amount of the transactions entered into during the year and the gross total value outstanding at the year-end, on a consolidated basis. Figures should include the gross amounts of all sell and repurchase (and purchase and resell) agreements made by the parent as well as its subsidiaries. When listing all institutions with which transactions have been made, state the year-end outstanding gross total value for each type of contract. Page 10.060 - General Interrogatories (continued) - Question 2.1 Embed the information into the special Excel file if more space is needed. Life Insurance Return Instructions VI-5 Revised: July 2018
Page 10.070 - General Interrogatories (continued) - Question 4.1 Transactions with subsidiaries, affiliates and other third parties Materiality is defined as 1% of consolidated equity. Embed the information into the special Excel file if more space is needed. Page 10.090 - General Interrogatories (continued) - Question 5.3 - Other Disclosure (continued) Refer to OSFI Guideline B-10 - Outsourcing of Business Activities, Functions and Processes for more information. For insurers incorporated in the province of Quebec, refer to Outsourcing risk management guideline. - Question 5.4 The amount of shareholder surplus that is dependent on future payment of dividends to participating policyholders/certificateholders: Disclose the cumulative portion of participating income recognized in retained earnings which is in excess of the amount permitted by statute based on participating dividends paid, or, alternatively, embed a file with a continuity of total participating surplus in the Special Excel file. - Question 5.6 Report on line 220 only the software development costs amount capitalized during the year and included in line 210. Life Insurance Return Instructions VI-6 Revised: July 2018
Pages 11.050-11.070 - General Interrogatories These pages apply to foreign insurers/societies only. Page 11.050 - General Interrogatories - Question 2.1 This question relates to contingent liabilities/provisions, contractual obligations or other offbalance sheet liabilities of the Canadian Branch in Canada. - Question 2.3 If the answer to this question is yes, then provide additional details. Provide a description of the issues, on a consolidated basis; including subsidiaries. Page 11.070 - General Interrogatories (continued) - Question 5.2 Specific methods are not prescribed for apportioning income and expenditure by fund or by line of business. Details of the bases and formula used by the Canadian Branch should provide sufficient information for OSFI and to assist in its independent verification process. - Question 5.5 The question relates to the insurer s/society s policies regarding market conduct practices. Additional information can be provided in an attached sheet or on page 20.060 if the insurer/society has answered no to this question. - Question 5.6 Include the total amount of all IT costs on line 510. On line 520, report only the software development costs amount capitalized during the year included in line 510. Life Insurance Return Instructions VI-7 Revised: July 2018
Pages 15.010 15.040 - Worldwide Financial Statements These pages apply to foreign insurers/societies only. Foreign insurers/societies are required to complete the condensed balance sheet and income statement for the worldwide operation of the Home Office. The information should be as of the latest fiscal year-end for which such information is available. Indicate the year-end date at the bottom of the page on line 930. Financial data must be converted from the currency of the home jurisdiction to Canadian currency. Indicate the currency on line 950 and the exchange rate used at the top of each column. The data used to complete these pages should be taken primarily from the return submitted to the regulatory body of the home jurisdiction. There is no requirement to convert the data from the home jurisdiction s accounting principles to IFRS/Canadian GAAP. Page 15.020 - Liabilities, Policyholders and Shareholders Equity - Worldwide Business This page applies to Foreign Life insurers only. Page 15.021 - Liabilities and Surplus - Worldwide Business This page applies to Foreign Fraternal Benefit Societies only. Life Insurance Return Instructions VI-8 Revised: July 2018
Page 15.040 - Capital/Solvency Information - Worldwide Business This information should be as of the latest fiscal year-end for which such information is available. Indicate the year-end date at the bottom of the page, on line 930. Financial data must be converted from the currency of the home jurisdiction to Canadian currency. Indicate the currency on line 950 and the exchange rate used at the top of each column. Because of the wide range of potential measurements of capital and solvency, there is opportunity to provide the information in the form of monetary capital amounts available and required as well as a ratio which might be on a different basis. For U.S. insurers/societies, capital available would be the Total Adjusted Capital in the RBC formula. Required capital would be the figure shown as Authorized Control Level Risk Based Capital. You will note that at the bottom of page there is room to provide comments to describe the standard used. Foreign insurers/societies should fill in only the data that is appropriate for their circumstances. For instance, if solvency is measured only in the form of a ratio, there is no need to fill in the monetary accounts on lines 001, 100 and 200. Of course, the opposite situation may be the actual case as well. Foreign insurers/societies are encouraged to use the comment section to describe the particular circumstances. Although the United Kingdom and the U.S.A. make capital and solvency information public (but not the solvency ratio for marketing purposes in the U.S.A.), OSFI has not been able to determine this fact for all other countries. So that insurers/societies will not contravene any foreign laws regarding publicity of capital solvency ratios, OSFI will not make this data public until it has confirmed that it may do so and in any event not before Canadian life insurance companies solvency ratios are made public. Pages 20.010 20.021 Opening Prior Year Restated: Only to be completed by insurers/societies that make a retrospective restatement or reclassification of items. Life Insurance Return Instructions VI-9 Revised: July 2018
Pages 20.010 20.042 IFRS requires many items be presented separately within the financial statements or shown within the notes to the financial statements. If the LIFE return does not accommodate the separate line reporting of certain items, insurers are expected to disclose such information within the notes to the financial statements. Foreign insurers/societies must report the financial statements on a non-consolidated basis. Pages 20.010 - Assets Foreign insurers/societies must report both total assets of the Canadian Branch as well as the portion that is vested in trust, at balance sheet values. For Canadian insurers/societies, disclosure should be consistent with amounts reported as assets in the non-consolidated financial statements on page 70.010. - Line 010 - Cash and Cash Equivalents Insurers/societies must not offset credit balances in one depository institution against debit balances in another depository institution. Netting is allowed only between branches of the same depository institution. - Line 020 Assets Held for Sale Report all assets that are in disposal groups under IFRS 5. This does not include investments in the portfolio designated available for sale. - Line 040 - Short Term Investments See instructions for page 21.012. Life Insurance Return Instructions VI-10 Revised: July 2018
Pages 20.010 - Line 200 Policy/Certificate Loans Loans are to be reported at their unpaid balances. If the amount outstanding exceeds a policy s/certificate s cash surrender value, the excess should be classified out of policy/certificate loans and included in line 600 as an unsecured loan and a provision for collectability. - Line 250 - Bonds and Debentures See instructions for page 21.012. - Line 300 Mortgage Loans See instructions for page 21.012. - Line 420 Preferred Shares See instructions for page 21.012. - Line 440 Common Shares See instructions for page 21.012. - Line 510 Investment Properties Include right-of-use assets that are considered investment properties. - Line 540 Property and Equipment Include right-of-use assets that are considered Property and Equipment. - Line 550 Interests in Associates & Joint Ventures See instructions for page 21.100 Part A. - Line 600 Other Loans and Invested Assets See instructions for page 21.012, line 870. Life Insurance Return Instructions VI-11 Revised: July 2018
Pages 20.010 - Line 750 Investments in Subsidiaries This line applies to foreign insurers/societies only. Report on the equity basis. Cost of an investment in a subsidiary should include any portion of the share premium or contributions to surplus whether paid in cash, dividends, or other consideration. The initial cost or balance sheet value is written up or down at the end of each accounting period to reflect the pro rata share of the parent company in the earnings of the subsidiary. - Line 880 Other Assets Include prepaid expenses, deferred charges and deferred acquisition costs not related to insurance contract liabilities, and accounts receivable for fraternal and other funds. Insurers/Societies licensed in Quebec: See instructions for page 21.155. Page 20.020 - Liabilities, Policyholders /Shareholders Equity and Head Office Account This page applies to Life insurers only. Amounts for lines 510 to 550 and 610 to 740 are only be reported on the 4 th quarter filing. Policyholders and Shareholders Equity only applies to Canadian Life insurers. - Line 005 Liabilities Held for Sale Report all liabilities that are in disposal groups under IFRS 5. This does not include liabilities designated available for sale. - Line 010 Actuarial Liabilities for Insurance Contracts See instructions for page 22.020. - Line 040 Other Contract Liabilities See instructions for page 22.020. Life Insurance Return Instructions VI-12 Revised: July 2018
Page 20.020 - Line 070 Trust and Banking Deposits Include deposits relating to the life insurer s banking and trust subsidiary operations. Quebec life insurers: Include deposits relating to the life insurer s banking and trust operations. Include lease liabilities. - Line 160 Provisions and Other Liabilities - Line 280 Subordinated Debt Refer to the LICAT/CARLI Guideline. - Line 610 Capital Stock Include preferred shares issued by mutual companies. - Line 700 Retained Earnings For use by stock companies only. - Line 800 Head Office Account This line applies to foreign insurers only. Report end of year balance as reconciled on page 20.044. - Lines 840 and 999 These lines apply to foreign insurers only. Page 20.021 - Liability, Surplus, Head Office Account and Accumulated Other Comprehensive Income (Loss) This page applies to Fraternal Benefit Societies only. See detailed instructions for page 20.020. Life Insurance Return Instructions VI-13 Revised: July 2018
Page 20.021 - Line 589 Surplus This line applies to Canadian societies only. - Lines 800 and 840 These lines apply to foreign societies only. Page 20.030 - Statement of Income The statement of income excludes any income earned on Segregated Funds; however management fees and related revenue and expense items in respect of Segregated Funds are included. - Line 050 Gross Investment Income See instructions for page 23.010. - Line 060 Investment Expenses and Taxes See instructions for page 23.010. - Line 075 - Overlay approach adjustment for financial instruments (Reclass from P&L to OCI) This line only applies to Quebec provincially incorporated insurers who have adopted the overlay approach for the implementation of IFRS 9. - Line 130 Fee Income See instructions for pages 35.010-35.020, line 130. - Line 160 Other: Revenue See instructions for pages 35.010-35.020, line 160. - Line 260 Policyholder/Certificateholder Benefits See instructions for pages 35.010-35.020, lines 210 to 240. Life Insurance Return Instructions VI-14 Revised: July 2018
Page 20.030 - Line 270 Column 01 Benefits Ceded See instructions for pages 35.010-35.020, line 270. - Lines 310-320 Gross Changes to Actuarial Liabilities The following examples of basis changes are not meant to be all inclusive. Federal life insurers/fraternal benefit societies only: Changes in any best-estimate assumptions for in-force business. This includes changes in mortality, morbidity, lapse, policyholder/certificateholder dividends, expenses, ultimate interest rates, equity returns, real estate returns, default rates, etc. This also includes changes in PfADs where the MfADs are a function of the best-estimate actuarial liabilities. Quebec life insurers: Refer to section 8, Variation in consolidated net contract liabilities, of the Actuary s Guide to Reporting on Insurers of Persons Policy Liabilities issued by the Autorité des marchés financiers. The Normal change in actuarial liabilities is the total change, less the basis change amount. - Lines 342 and 344 Gross Changes to Other Contract Liabilities Normal/Basis Change See instructions for pages 35.010-35.020, lines 342 and 344. - Line 360 Policyholder/Certificateholder Dividends See instructions for pages 35.010-35.020, line 360. - Line 420 Transfer to an (Transfer from) Other Funds See instructions for pages 35.010-35.020, line 420. - Line 480 Interest on Policyholder/Certificateholder Amounts on Deposit See instructions for pages 35.010-35.020, line 480. - Line 510 - Interest Expenses and Finance Costs See instructions for page 23.030. Life Insurance Return Instructions VI-15 Revised: July 2018
Page 20.030 Line 540 General Expenses and Taxes (excl. income taxes) See instructions for page 23.030. - Line 570 Other Expenses See instructions for page 23.030. - Line 830 Discontinued Operations (net of Income Taxes of $ ) There are three datapoints to be completed on this line: current (column 01), prior (column 02) and an inside datapoint (column 99). The inside datapoint is labelled net of Income Taxes of $, and is located at the bottom of the form - Lines 859, 870, 900 and 920 These lines apply to Canadian insurers/societies only. Page 20.031 - Statement of Income (Budget) (BC) This page applies to Canadian B.C. incorporated insurers only. Page 20.040 Statement of Equity in Participating Account This page applies to Canadian insurers/societies only. Fraternal Benefit Societies are only required to fill in this page if this type of business applies. Consult your primary regulator prior to making transfers between par, non-par and retained earnings accounts. Life Insurance Return Instructions VI-16 Revised: July 2018
Page 20.040 - Lines 040-070 - Adjustments The portions of: i) prior period adjustments; and ii) accounting policy changes which have been applied retroactively and which have been allocated to the participating account are to be reported on this line. Any changes should be fully explained in the Notes to the Financial Statements, or in the answer to Question 5.5 on Page 10.090. Any transitional adjustments/balances from the adoption of a new accounting standard should be reported on line 070 in the year of transition. - Line 100 Share of Net Income (Loss) This line is equal to line 870 on page 20.030 for stock companies only. - Line 130 Transfer from (to) Retained Earnings (Stock companies) Contact your primary regulator prior to transferring any amounts. Page 20.040 - Statement of Non-Participating Account Mutual Companies Only - Line 160 Transfer from (to) Non-Par Account (Mutual companies) For mutual companies, transfers from/to the non-participating account can only be made where there has been a corresponding transfer of liabilities, such as where a participating policy has been changed to a non-participating policy, or where legislative requirements have been met. The portions of: - Lines 340 370 - Adjustments i) prior period adjustments; and ii) accounting policy changes which have been applied retroactively and which have been allocated to the non-participating account are to be reported on this line. Such changes should be fully explained in the Notes to the Financial Statements. Any transitional adjustments / balances from the adoption of a new accounting standard should be reported on line 370 in the year of transition. Life Insurance Return Instructions VI-17 Revised: July 2018
Page 20.040 - Lines 540 570 - Adjustments The portions of: i) prior period adjustments; and ii) accounting policy changes which have been applied retroactively and which have been allocated to opening retained earnings are to be reported on this line. Such changes would normally be fully explained in the Notes to the Financial Statements or on page 20.060. Any transitional adjustments/balances from the adoption of a new accounting standard should be reported on line 570 in the year of transition - Line 630 Transfer from (to) Par Account Contact your primary regulator prior to any transfers Page 20.041 - Statement of Surplus This page applies to Canadian Fraternal Benefit Societies only. To report the reconciliation of surplus from the beginning to the end of the year, split by Insurance Fund and Fraternal and Other Funds. See detailed instructions for page 20.040. Page 20.044 - Head Office Account This page applies to foreign insurers/societies only. The portions of: - Lines 040-070 Adjustments ii) prior period adjustments; and ii) accounting policy changes which have been applied retroactively and which have been allocated to the non-participating account are to be reported on this line. Such changes should be fully explained in the Notes to the Financial Statements. Any transitional adjustments/balances from the adoption of a new accounting standard should be reported on line 070 in the year of transition. Life Insurance Return Instructions VI-18 Revised: July 2018
Page 20.044 - Line 080 Net Income (Loss): Fraternal & Other Funds List items considered as prior period adjustments which should be explained in the notes to the financial statements or separately on page 20.060. Page 20.042 - Comprehensive Income (Loss), and Accumulated Other Comprehensive Income (Loss) - Lines 220, 225 and 775 Overlay Approach These lines only applies to Quebec provincially incorporated insurers who have adopted the overlay approach for the implementation of IFRS 9. - Lines 615, 600 and 620 These lines apply to Canadian insurers/societies only. Page 20.054 - Statement of Changes in Equity This page applies to Canadian Life insurers only. Report changes in equity items per Equity section of Consolidated Financial Statements on page 20.020 and AOCI on page 20.042. Page 20.060 - Notes to the Financial Statements Insurers/societies are reminded to file a copy of their Management Discussion & Analysis. Page 20.085 - Quebec Appointed Actuary s Certificate This page applies to Canadian Quebec incorporated insurers only. Life Insurance Return Instructions VI-19 Revised: July 2018
Page 21.012 - Summary of Investments Please note: This page accommodates either accounting standard IAS 39 or IFRS 9, depending on which accounting standard is adopted by the insurer. Columns 52, 53, 54 and 55 are only to be used if an insurer has adopted IFRS 9. The remaining columns are applicable to either IAS39 or IFRS 9. Government Securities are securities issued or guaranteed by OECD Central Governments and Canadian Provinces and Territories. If bonds issued by crown corporations are guaranteed by OECD governments, they should be reported under Government. Corporate Public bonds and debentures are securities that are registered and traded to the public. They usually have CUSIP numbers. Corporate Private bonds and debentures are securities which are not registered and traded to the public. They are normally offered to a single or select group of investors. Investment grade corporate public bonds and debentures are defined as securities that are rated as BBB or higher by a recognized rating agency. Investment grade for corporate private bonds and debentures is defined as securities that would be rated as BBB or higher according to the criteria used by recognized rating agencies. Some regulators require insurers/societies to maintain detailed listings of investments for examination; they are not required to be submitted with the LIFE return. Refer to Section V - Jurisdictional Requirements. For each investment category listed in the summary the balance sheet value of the investments should be reported in the columns based on their classification under the applicable accounting standards. For foreign insurers/societies, Canadian GAAP is to be followed with respect to conversions of foreign denominated securities to Canadian currency. Report all amounts vested in trust. - Line 010 Short-Term Investments Investments other than Cash Equivalents having an original term to maturity of one year or less; includes term deposit, GICs, commercial paper, treasury bills, etc. - Line 479 - Bonds and Debentures Fixed-term investments having a fixed maturity date or dates for the repayment of principal (includes convertible bonds, stripped bonds, asset backed securities and GICs with original terms to maturity of more than one year). Life Insurance Return Instructions VI-20 Revised: July 2018
Page 21.012 - Line 500 Mortgage Loans Amounts reported should be after the deduction of collective and individual provisions, if any, which were established to reflect non-collectability of loan balances. Includes sale agreements, power of sales, mortgage pools, and mortgages in process of foreclosure, where title has not yet passed to the insurer/society. - Line 599 Preferred Shares Include convertible preferred shares. - Line 659 Common Shares Include options, warrants and rights in respect of common shares. - Line 870 Other Loans and Invested Assets Include leases, seed money provided for Segregated Funds operations and other recognized financial assets not reported on line items above. - Column 16 Available for Sale (FV) Report items that are classified as Available for Sale, but are measured at amortized cost in this column. - Columns 52, 53 and 54 - Expected Credit Loss (ECL) Stage I, II and III For insurers who have adopted IFRS 9, report the expected credit losses amount for each stages 1, 2 and 3 as described in IFRS 9, Financial Instruments. - Column 70 Balance Sheet Value of Assets Used to Back Index Linked Products Report balance sheet value of investments that are in the general fund and where the investment risks are passed through to policyholder/certificateholder as the investments are used to back index-linked products. Refer to the LICAT/CARLI Guideline. Life Insurance Return Instructions VI-21 Revised: July 2018
Page 21.020 - Summary of Provisions Please note: This page accommodates either accounting standard IAS 39 or IFRS 9, depending on which accounting standard is adopted by the insurer. Columns 57, 58 and 59 are only to be used if an insurer has adopted IFRS 9. The remaining columns are applicable to either IAS39 or IFRS 9. Report short-term investments, preferred and common shares under line 710 Other Loans and Invested Assets. Foreign insurers/societies should report all amounts vested in trust. - Columns 10 to 46 Amounts for columns 10 to 46 are only be reported on the 4 th quarter filing. - Column 10 Provisions Prior Period End - Total Report Prior Period End Provisions (collective & individual) under IAS 39 or ECL under IFRS 9. - Column 33 Movement Current Period - Increase Report increase of provisions (collective & individual) under IAS 39 or ECL under IFRS 9 during current period. - Column 35 Movement Current Period - Decrease Report decrease of provisions (collective & individual) under IAS 39 or ECL under IFRS 9 during current period. - Columns 57, 58 and 59 Provisions Current Period End (Including (ECL) Stage I, II and III For insurers who have adopted IFRS 9, report the expected credit losses amount for each stages 1, 2 and 3 as described in IFRS 9, Financial Instruments. Life Insurance Return Instructions VI-22 Revised: July 2018
Page 21.030 - Corporate Investments by Sector Provide balance sheet values after individual provisions of all corporate bonds, preferred and common shares by sector (based on Bloomberg or GICS sector classification system). Sectors should be classified according to the domicile of the issuing Corporation. E.g. If a Canadian Corporation issues U.S. dollar pay securities then this should be reported under Canada in the relevant sector. All amounts are to be reported in Canadian Currency. Exclude derivative instruments, or securities issued or guaranteed by the government which have a zero rating for Capital Adequacy purposes and investments made for the Segregated Fund account holders. Materiality limits for limiting disclosure of immaterial investments by issuer is as follows: Insurers/societies must separately disclose investments issued in the U.S.A. and/or in Other if one of the following condition is meet: assets in that territory exceed 5% of the consolidated equity; revenue in that territory exceeds 5% of consolidated revenue. In all other cases, insurers/societies may report the immaterial investments as if issued in Canada. Where there is no relevant sector for the classification include in Sector Other. Foreign insurers/societies should report all amounts vested in trust. Page 21.040 - Significant Exposures By Group of Companies Exclude derivative instruments, or securities issued or guaranteed by the government which have a zero rating for Capital Adequacy purposes and investments made for the Segregated Fund account holders. Foreign insurers/societies should report all amounts vested in trust. - Column 31 Other Loans and Investments Include short-term debt, guarantees, leases and other investments. Life Insurance Return Instructions VI-23 Revised: July 2018
Page 21.040 - Column 36 Reinsurance Ceded Provide the total credit risk exposure to a particular reinsurer or reinsurance group. This exposure includes liabilities ceded, amounts on deposit with the reinsurer under funds withheld or similar arrangements, and any amounts due and unpaid. Page 21.050 - Mortgage Loans Foreign insurers/societies should report all amounts vested in trust. Single Residential (SR) Note: that the definition of residential mortgages differs from that applicable to the LICAT/CARLI calculations. A residential mortgage is one that is secured by residential property. Residential property is defined as real property consisting of buildings that are used, or are to be used, to the extent of the majority of the floor space thereof, as one or more private dwellings. A single residential property is a dwelling having no wall in common with another dwelling and designed for occupancy by a single family. Multiple Residential (MR) Include all other residential properties under multiple. Office (O) Mortgages on real property consisting of buildings that are used primarily as offices. Retail Stores (RS) Mortgages on real property consisting of buildings that are used primarily as retail stores including shopping plazas. Industrial (I) Mortgages on real property consisting of buildings that are used primarily for industrial purposes including manufacturing and warehouses. Life Insurance Return Instructions VI-24 Revised: July 2018
Page 21.050 - Mortgage Loans (cont d) Hotels (H) Include hotels, motels, lodges and resorts. Other (X) Include all other types of real estate including vacant land. Insured loans are those where the amount owed by the borrower is insured against default by Canada Mortgage and Housing Corporation (CMHC), another government body, or by a private insurer/society. Restructured loans allow the lender to grant any of the following concessions to the borrower that it would not otherwise consider: (a) (b) (c) (d) (e) a reduced interest rate; uncompensated deferral or extension of principal repayments or interest payments; forgiveness of a portion of principal or previously accrued interest; acceptance of assets other than cash in settlement of a larger amount of the loan than is represented by the estimated net proceeds from sale of the assets; other concessions which would not be considered in the absence of the weakened financial condition of the borrower. The arrears status of restructured loans is established with respect to the terms of the restructure, rather than original loan terms. For purposes of identifying the appropriate column, the age of arrears is defined as the number of days that has elapsed since the due date of the oldest payment or partial payment (principal and/or interest) that has not been received according to the terms of the loan as of the statement date. Foreclosures in progress (title has not yet passed to the insurer/society) are to be included in mortgage loans. Life Insurance Return Instructions VI-25 Revised: July 2018
Page 21.050 - Lines 010-410 - Column 11-31 Unsatisfactory Loans Report the total amount of Mortgage Loans before individual provisions in these columns. Columns 11-16 should not include loans that could be classified as impaired; these loans should be reported in column 26 (see below). - Column 21 Loans Delinquent > 90 days but not designated impaired Report the amount of all the mortgages loans (including restructured loan) which are > 90 days but not designated as impaired. - Column 26 Impaired Loans Report the balance sheet value of loans on which the insurer/society has taken individual provisions (gross of provisions). Insured loans should be excluded. - Line 710 Second and subsequent mortgage loans These numbers are for information purposes only. They are already included in lines 010-410. Page 21.060 - Mortgage Loans 25 Largest Uninsured List the largest 25 uninsured residential and non-residential mortgage loans in descending order by outstanding principal balance (gross before provisions). See instructions for page 21.050 for description of property types. Foreign insurers/societies should report all amounts vested in trust. - Column 02 Name of Borrower The total of all uninsured mortgages to the same borrower or group of related borrowers should be considered one mortgage in determining the largest 25 uninsured mortgages. - Column 36 Amount of Cumulative Prior Encumbrances If the insurer s/society s mortgage loan is not a first charge on the property, the total cumulative amount of all prior mortgages and prior claims should be included in this column. Life Insurance Return Instructions VI-26 Revised: July 2018
Page 21.060 - Column 46 Property Type Use the property type definitions and codes on page 21.050. - Column 51 Market Value of Property Show the market valuation of the property as at year-end. If the loan is shared with other lenders having claims on the property, the market value of the property reported in column 51 should be the market value of the property multiplied by the proportion of the insurer s/society s original loan in relation to the total loan originally advanced. Page 21.070 - Insurers/Societies licensed in Quebec Mortgage Loans Geographic Distribution Only Canadian insurers/societies that are licensed in the province of Quebec are required to fill in this schedule. The amounts to be included in this schedule are to be gross (before provisions). This table shows the allocation of mortgage loans according to business sector by geographic location of the mortgaged property. Insured loans are those where the amount owed by the borrower is insured against default by Canada Mortgage and Housing Corporation (CMHC), another government body, or by a private insurer/society. Refer to instructions for page 21.050 for property type definitions. - Lines 010-130 Location of Property The gross value of Canadian loans should be classified according to the province in which the property securing the loan is located, with all insured mortgages reported in column 01 and all uninsured mortgages reported by type of property in columns 06 to 36. - Columns 51, 61 - Amount of Principal on which Interest was overdue > 90 days The gross amount of principal (before provisions) on loans in arrears more than 90 days should be reported in column 51 for insured mortgages and column 61 for uninsured mortgages. Life Insurance Return Instructions VI-27 Revised: July 2018
Page 21.070 - Column 70 Total Provisions Report the amount of specific provisions for all gross mortgage loans reported in column 41. Page 21.075 - Quebec incorporated insurers only Mortgage Loans Geographic Distribution by Region Quebec insurers should follow the instructions of page 21.070 unless the insurer has 50% or more of balance sheet value (before provisions) of properties in which it has a mortgage investment located in Quebec, in which case page 21.075 must be completed. An insurer also has the option to complete both pages. This page applies to Canadian Quebec incorporated insurers only. Canadian societies are not required to fill in this page. The geographic sectors used are based on the administrative regions of Quebec and are partially combined. The administrative regions of Quebec are: 01 Bas-Saint-Laurent 10 Northern Quebec 02 Saguenay-Lac-Saint-Jean 11 Gaspesie-Iles-de-la-Madeleine 03 National Capital 12 Chaudiere-Appalaches 04 Mauricie 13 Laval 05 Estrie 14 Lanaudiere 06 Montreal 15 Laurentides 07 Outaouais 16 Monteregie 08 Abitibi-Temiscamingue 17 Central Quebec 09 Cote-Nord These regions have been combined as follows: column 01: regions 01-09-11: Eastern Quebec column 02: regions 02-08-10: Northern Quebec column 03: regions 03-12: Quebec Beauce column 04: regions 04-05-16-17: Southern Quebec Mauricie Central Quebec column 05: regions 07-14-15: Outaouais - Laurentides Lanaudiere column 06: regions 06-13: Montreal Laval Life Insurance Return Instructions VI-28 Revised: July 2018
Page 21.075 - Line 010-060 Location of Property The gross value of Quebec loans should be classified according to the region in which the property securing the loan is located, with all insured mortgages reported in column 01 and all uninsured mortgages reported by type of property in columns 06 to 36. Page 21.080 - Investment Properties & Own Use Property and Equipment Insurers/ societies: List the top 10 properties in order of size (based on balance sheet value) and provide a sub-total of all others, including properties sold during the year. Include rightof-use assets in the respective asset lines. Quebec insurers: List all properties with a balance sheet value greater than $500,000, including properties sold during the year. Societies should only include Insurance Funds on this page. Foreign insurers/societies should report all amounts vested in trust. Insurers incorporated in the province of Alberta must file this page on a quarterly basis. All other insurers are only required to file this page with their 4 th quarter filing. - Column 06 Property Type See instructions for page 21.050 for property type definition and codes to use. Where a property has more than one use (i.e., office and retail) the whole property should be classified as one type based upon the use of the majority of the floor space. - Column 21 Balance Sheet Value before Provisions Beginning of Year The amount on line 899 of column 21 should agree to the amount on line 899 of column 66 for the prior year. - Column 71 Cumulative Individual Provisions Report the individual provisions that have been booked against each property. Include (in brackets) the amount of individual provision reversals where an asset was previously written down - Line 099 All Other Own Use Properties Provide the total of all own use properties not listed including own use properties sold during the year. Life Insurance Return Instructions VI-29 Revised: July 2018
Page 21.080 - Line 929 Total excluding those held by subsidiaries This line applies to Canadian insurers/societies only. Page 21.090 - Insurers/Societies licensed in Quebec Real Estate Geographic Distribution by Type Only Canadian insurers/societies that are licensed in the province of Quebec are required to fill in this schedule. This schedule provides an analysis of the consolidated gross balance sheet value (before provisions) of real estate, including foreclosed real estate which is held for sale. Where mortgage encumbrances exist, they should not be deducted from the value of the real estate. Where a property has more than one use (i.e., office and retail) the whole property should be classified as one type based upon the use of the majority of the floor space. The property types are described in the instructions for page 21.050 (except for properties held for own use). Page 21.095 - Quebec incorporated insurers only Real Estate Geographic Distribution by Type and by Regions Quebec insurers should follow the instructions for page 21.090 unless the insurer has 50% or more of balance sheet value (before provisions) of properties located in Quebec, in which case page 21.095 must be completed. An insurer also has the option to complete both pages. This page applies to Canadian Quebec incorporated insurers only. Canadian Fraternal Benefit Societies are not required to fill in this page. The geographic sectors used are based on the administrative regions of Quebec and are partially combined. The administrative regions of Quebec are described in the instructions for page 21.075. Life Insurance Return Instructions VI-30 Revised: July 2018
Page 21.100 - Interest in Associates & Joint Ventures and Other Loans and Invested Assets Foreign insurers/societies should report all amounts vested in trust. Part A Interests in Associates & Joint Ventures Investments in mutual funds, segregated funds and any similar investments should not be reported here. List the top 10 (regardless of materiality) interests in Associates & Joint Ventures on lines 001 to 010 and fill out amounts in column 06. The total of all remaining interests in Associates & Joint Ventures not listed in lines 001 to 010 should be reported on line 019, column 06. Part B Other Loans and Invested Assets Other loans and invested assets including fixed term investments not reported elsewhere should be reported here. Report the top 10 on lines 201 to 210 regardless of materiality. The total of all remaining investments not listed in lines 201 to 210 should be reported on line 219, column 16. Page 21.110 - Derivative Instruments Risks Profile - Lines 010-050, 210-250, 310-330 Employed by the Insurer/Society Risk Role Indicate what risk role(s) the insurer/society assumes in using each type of derivative instrument using the legend at the bottom of page 21.110. Where the insurer/society assumes more than one risk role in respect of a particular type of instrument, each role should be indicated. For example, during the reporting period, the reporting entity may have been a trader in interest rate swaps and used them as well for hedging. In this case, beside the interest rate swaps, it would list risk roles 1 and 2 in line 030, column 02. - Lines 010-499 Columns 07-37 Gross Notional Principal Amount of year end The consolidated amounts should be reported in column 07 and the non-consolidated amount for the insurer/society only should be reported in column 12. For societies, column 12 should only include amount from insurance funds. Life Insurance Return Instructions VI-31 Revised: July 2018
Page 21.110 - Lines 010-499 Column 17 Over the Counter Amount Report the notional amounts relating to all derivative contracts that are not exchange traded. - Lines 010-499 Column 22 Amount Held for Trading Report the notional amounts relating to all derivative contracts that are held for trading purposes. - Lines 010-499 Columns 27, 32, 37 Remaining Term of Exposure The total notional principal amount reported in column 07 should be broken down in columns 27, 32 and 37 by the remaining term to maturity. The sum of these columns should equal the amount reported in column 07. - Lines 010-499 Column 42 Credit Risk (Positive Mark to Market Exposure) Report amounts only for contracts that have credit risk (i.e., positive mark to market exposure). - Line 550 Column 42 Adjustments for master netting agreements Report on line 550 any adjustments for master netting agreements not recognized under the applicable accounting standards because there is no intention of settling on a net basis or of realizing the asset and settling the liability simultaneously. - Lines 010-499 Column 47 Credit Equivalent Amount Insurers/ societies: The Credit Equivalent Amount is determined on the basis outlined in the LICAT Guideline. Quebec insurers: The Credit Equivalent Amount is determined on the basis outlined in the CARLI Guideline. - Column 12 Notional Amount in Life Insurer/Insurance Fund This column applies to Canadian insurers/societies only. Life Insurance Return Instructions VI-32 Revised: July 2018
Page 21.120 - Derivative Instruments Risk Profile Gross/Net Mark to Market Exposures - Line 010-099 Total Net Positive Mark to Market Exposures by Credit Rating and Contract Class For each credit rating category, report the net positive mark to market exposure relating to each class of contract, split between exposures to related and arm s length counterparties. The net positive mark to market exposure is the summation of all individual positive mark to mark exposures (except where an offsetting of negative mark to market exposures with the same counterparty is permitted). - Line 110 199 Total Gross Positive Mark to Market Exposures by Credit Rating and Contract Class For each credit rating category report the gross positive mark to market exposure relating to each class of contract, split between exposures to related and arm s length counterparties. The gross positive mark to market exposure is the exposure before offsetting. Do not report contracts with negative mark to market exposures. Page 21.130 - Substantial Investments This page applies to Canadian insurers/societies only. Refer to your principle regulator for requirements in their jurisdiction. Materiality is defined as one percent of the consolidated equity of the Insurer/Society. Substantial investments are defined under Section 10 of the Insurance Companies Act. - Column 07 Direct or Indirect Investment Indicate if the investment is held directly by the insurer/society or indirectly through subsidiaries. - Column 12 Date of Acquisition Include each date of acquisition of shares where the insurer/society has made investments in a particular corporation over a period of time. Life Insurance Return Instructions VI-33 Revised: July 2018