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2022 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, 2022, the Blue Cross Life LICAT ratio was 122%, 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, 2022


December 31, 2021


Available Capital 250.9 245.6
    Tier 1 Capital 204.7 209.8
    Tier 2 Capital 46.2 35.8
Surplus Allowance 220.9 192.9
Eligible Deposits 0 0
Total Capital Resources 471.8 438.5
Base Solvency Buffer 386.7 349.3
Total Ratio 122% 126%
Core Ratio 93% 99%


The increase in available capital was mainly driven by net income. The increase in surplus allowance was mainly driven by the acquisition of a new block of business.

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

  • The acquisition of a new block of business;
  • A reduction in Blue Cross Life’s reinsurance levels for select business; and
  • Rising interest rates throughout the year.

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