Validus Reinsurance Ltd., the Bermuda-based reinsurer whose parent company was acquired by AIG for $5.56 billion last year, intends to open a new branch in Canada, according to notices given in the Canada Gazette.
The company plans to file an application with a federal regulator, the Office of the Superintendent of Financial Institutions (OSFI), to enable it to conduct reinsurance business in Canada.
“In particular, Validus Reinsurance, Ltd. intends to provide in Canada treaty and facultative reinsurance of commercial property and casualty and specialty risks,” a notice stated. “All classes of insurance will be limited to the business of reinsurance.”
Validus also stated that its Canadian chief agency will be located in Toronto, Ontario.
AIG already has a presence in Canada through its primary insurance subsidiary, AIG Insurance Company of Canada, which covers property and casualty risks.
OSFI guidelines for foreign insurers intending to set up a branch in Canada state that applications for an order to insure typically take at least 12 to 18 months, the Financial Post noted.
Reinsurance has recently become a topic of interest to OSFI. The regulator released a discussion paper on reinsurance last June that include proposals to address certain risks.
“In light of the increasing reliance on reinsurance and the emergence of new and evolving business models related to the use of reinsurance, OSFI must ensure that its reinsurance framework remains appropriate,” the paper said.