CDIC Differential Premiums By-law Update

Summary#

The federal insurer Canada Deposit Insurance Corporation made technical changes to the By-law Amending the Canada Deposit Insurance Corporation Differential Premiums By-law that update how it collects and scores data from member institutions. The by-law came into force when it was registered on February 3, 2020 and was published in the Canada Gazette on February 19, 2020.

What it does#

• Updates the definition of the Reporting Manual to match the wording used by Office of the Superintendent of Financial Institutions (OSFI).
• Says that if the CDIC adjusts a Reporting Form, it will use that adjusted form when assigning scores.
• Simplifies and corrects several calculations used to score member institutions for differential premiums. This includes:
  • Changing how some capital and income measures are reported and calculated.
  • Removing duplicate scoring tables from the Reporting Form and relying on Schedule 3 for scoring rules.
  • Fixing the formula used when an examiner’s rating is not available.
• Aligns wording and data points with current OSFI forms (for example, the Leverage Requirements Return and Basel III reporting forms).
• Makes many targeted edits to specific items on the Reporting Form (items 1 through 10 and related schedule entries) to remove redundancy and clarify how numbers should be reported.

Who's affected#

• Canada Deposit Insurance Corporation member institutions — mainly banks, trust companies and other deposit-taking institutions that pay CDIC premiums.
• Office of the Superintendent of Financial Institutions, because the changes align CDIC reporting with OSFI forms.
• CDIC staff and the institutions’ reporting teams, who will use the updated Reporting Form and scoring rules starting with the 2020 premium year.
• General depositors are unlikely to notice direct effects from these technical changes.

Why it matters#

• These are mainly technical housekeeping changes meant to keep CDIC’s premium‑setting rules consistent with current OSFI reporting and to remove redundancies.
• For member institutions, the changes affect how data is reported and how their quantitative scores are calculated. That, in turn, can affect how much each institution pays in CDIC differential premiums.
• CDIC’s regulatory statement says the amendments do not add costs for industry. For regular bank customers, the practical impact should be minimal or none.