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2023 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, 2023, the Blue Cross Life LICAT ratio was 137%, 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, 2023


December 31, 2022*


Available Capital 287.6 265.1
    CSM 5.4 5.3
    Other Tier 1 Capital 228.9 205.5
    Tier 2 Capital 53.3 54.3
Surplus Allowance 248.7 215.0
Eligible Deposits 0 0
Total Capital Resources 536.2 480.1
Base Solvency Buffer 390.5 367.3
Total Ratio 137% 131%
Core Ratio 105% 98%

* Estimated based on the retrospective application of the 2023 LICAT Guideline to 2022 financial results, which have been restated to reflect the adoption of IFRS 17 and IFRS 9.

The increase in available capital was mainly driven by net income. The increase in surplus allowance was mainly driven by organic growth.

The increase in the base solvency buffer was due to:

  • Organic growth;
  • A reduction in reinsurance for some lines of business; and
  • Changes in Blue Cross Life’s investment portfolio.

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