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2021 LICAT Ratio Public Disclosure Summary

As a federally regulated financial institution, Blue Cross Life Insurance Company of Canada (“Blue Cross Life”) is required to comply with the Office of the Superintendent of Financial Institutions (“OSFI”) Life Insurance Capital Adequacy Test (“LICAT”). At a minimum, Blue Cross Life therefore needs to maintain a Total LICAT Ratio of 90%, and a Core LICAT Ratio of 55%. In addition, OSFI has established a supervisory target Total LICAT Ratio of 100%, and a corresponding Target Core LICAT Ratio of 70%. Definitions of terms used in this disclosure can be found in the LICAT guideline on OSFI’s website.

As at December 31, 2021, the Blue Cross Life LICAT ratio was 126%, well in excess of both the supervisory target Total LICAT Ratio and Blue Cross Life’s internal target. A breakdown of this solvency ratio by component, with comparatives to the previous year, is presented in the following table.


December 31, 2021


December 31, 2020


Available Capital 245.6 230.1
    Tier 1 Capital 209.8 193.6
    Tier 2 Capital 35.8 36.5
Surplus Allowance 192.9 160.2
Eligible Deposits 0 0
Total Capital Resources 438.5 390.3
Base Solvency Buffer 349.3 302.8
Total Ratio 126% 129%
Core Ratio 99% 101%


The increase in available capital was mainly driven by net income and an increase in the market value of assets backing capital. The increase in surplus allowance was mainly driven by growth in Blue Cross Life’s business.

The increase in the base solvency buffer was mainly driven by the following factors:

  • A reduction in Blue Cross Life’s reinsurance levels for select business, and
  • High growth throughout the year.

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