What’s Ahead for Insurance & Reinsurance in 2025 and Beyond
April 2025
Author: Tina Mashhadian – Regulatory Reporting Chair of RAPA
As part of RAPA’s ongoing commitment to supporting proactive engagement with regulatory developments, this overview aims to guide industry leaders in navigating the months ahead with clarity and confidence.
As we settle into the second quarter of 2025, Canada’s insurance and reinsurance sectors are navigating one of the most dynamic regulatory years in recent memory. With more than 40 initiatives across OSFI (Office of the Superintendent of Financial Institutions) and FSRA (Financial Services Regulatory Authority of Ontario), firms are being challenged to rethink resilience, transparency, and sustainability while keeping pace with innovation and evolving risks.
To help industry stakeholders stay ahead, we have mapped out both what’s already in effect and what lies ahead for the remainder of 2025. While this piece is focused on the Canadian market, certain regulatory trends especially around AI, climate risk, and crypto are echoed in the USA and globally, making this a valuable reference across borders.
Navigating the Regulatory Roadmap:
What’s Already in Effect (Q1 2025)
1)Mortgage Insurance Capital Adequacy Test (MICAT) 2024 Update
Effective: December 2024 | Regulator: OSFI
The update emphasized stronger capital and operational risk management for mortgage insurers.
Opportunity: Reassessment of capital structures and resilience frameworks.
2)LICAT 2025 Guideline
Effective: January 2025 | Regulator: OSFI
Revisions to the Life Insurance Capital Adequacy Test, with particular focus on segregated fund guarantee businesses.
Opportunity: Capital model optimization and improved alignment with product risk profiles.
What’s Coming Next: Regulatory Milestones from Q2 2025 Onward
| Regulation | Effective Date | Regulator | What It Covers | Opportunity for Insurers |
| Guideline E-21: Operational Risk & Resilience | April 2025 | OSFI | Managing disruptions from cyberattacks to natural disasters | Embed resilience into enterprise risk and boost continuity planning |
| Agent Supervision Framework | March 2025 | FSRA | Tighter oversight of life & health insurance agents | Strengthen agent relationships through better training and compliance |
| Crypto-Asset Exposure Disclosure | June 2025 | OSFI | Transparency in reporting crypto-asset exposures | Build trust with sound risk practices in emerging assets |
| Auto Insurance Reforms | July 2025 | FSRA | Fairness and transparency in auto premium setting | Stand out with responsible pricing and earn consumer trust |
| AI/ML Model Risk Management | August 2025 | OSFI | Governance of AI/ML models to mitigate risks | Lead in responsible AI use and boost model reliability |
| Cybersecurity Guidelines | September 2025 | FSRA | Sector-wide digital risk management standards | Reduce exposure and show leadership in data protection |
| Climate Risk Management Expectations | December 2025 | FSRA | Climate risk integration into operations and disclosures | Innovate with ESG-aligned products and strategies |
| Pension Funding & Risk Framework | December 2025 | OSFI | Managing DB pension plan funding and risks | Innovate in pension de-risking and longevity risk solutions |
Looking Ahead: Turning Compliance Into Competitive Advantage
The pace and breadth of regulatory change in 2025 may feel daunting but the reality is, many of these initiatives offer tangible value-creation opportunities for insurers and reinsurers who think beyond
Here’s how leading firms in the Canadian and cross-border market can respond strategically:
- Resilience as a Strategic Advantage
OSFI’s E-21 means resilience can’t just sit with IT anymore. Firms that make it part of their overall risk strategy will not only meet regulatory expectations but also cut downtime, speed up claims, and earn long-term trust. - Smarter AI Governance
With OSFI’s AI guidelines coming in August 2025, now’s the time to tighten model oversight. It’s not just about compliance—it’s about earning trust in AI-driven decisions and standing out with responsible innovation. - Growth Through Sustainability
FSRA’s climate guidance is pushing insurers to rethink products—from parametric covers to ESG-linked policies. Moving early means getting ahead of demand from climate-conscious clients and investors. - Capital as a Strategic Lever
Updates to MICAT and LICAT are raising the bar. Teams that align across actuarial, risk, and finance can fine-tune models, boost efficiency, and improve capital outcomes. - Cybersecurity as a Business Signal
With new cyber rules arriving in September, firms that treat cybersecurity as a business issue—not just IT—will stand out. Strong cyber practices won’t just reduce risk—they’ll signal leadership to clients and partners.
Conclusion: From Regulatory Burden to Strategic Blueprint
The Canadian regulatory landscape in 2025 is not merely a list of compliance deadlines but it’s a blueprint for modernization. For insurers and reinsurers, this is an opportunity to reinforce trust, build more adaptive operating models, and reframe regulatory change as a lever for competitive advantage.
Navigating the Regulatory Roadmap 2025 Word Document Download
