In an article published by Canadian Underwriter, CNA's Melanie Hoad discusses regulatory changes affecting foreign entities that operate in Canada.

Foreign entities operating in Canada through a branch will now have to notify the federal regulator of any potential changes to branch management “as well as any circumstances that could negatively impact their suitability,” attendees to a virtual industry event heard recently.

“Whereas the prior guideline focused on the role and accountability of the chief agent, there’s a shift now to branch management, which may include the chief agent along with senior officers located in and outside Canada,” Melanie Hoad, assistant vice president, legal counsel with CNA Insurance, said of the Office of the Superintendent of Financial Institutions (OSFI)’s revised Guideline E-4: Foreign Entities Operating in Canada on a Branch Basis.

The guideline replaces and consolidates prior guidelines E-4A and E-4B that were specific to insurers and banks respectively, Hoad said Nov. 2 during Insurance Bureau of Canada’s 21st annual Regulatory Affairs Symposium. She was speaking as part of a panel looking at numerous current and emerging regulatory and compliance issues.

“As counsel to a branch of a foreign entity, I was eagerly awaiting the revised E-4 guideline,” Hoad said, adding that the deadline for compliance is “fast approaching” in January 2022. The guideline outlines OSFI’s expectations in terms of management and administration of the Canadian business of foreign entities. “There’s an acknowledgement that the home country regulator of the foreign entity is the primary regulator and OSFI’s role is limited to the business in Canada.”

For more information and personal insights, read the full feature: ‘Regulatory Changes to Foreign Entities Operating in Canada’ published in Canadian Underwriter.