Financial Strength
Insuring Canadians since 1887, The Dominion of Canada General Insurance Company (The Dominion) has withstood more than a century of economic change to earn a reputation for stability, integrity and strength. The Dominion is 100% owned by E-L Financial Corporation Limited, a company whose shares are publicly traded on the Toronto Stock Exchange.1
Four important factors that underlie our financial strength are: Canada’s strong financial services regulatory environment, our prudent investment policies, our excess capital and backing by high quality global reinsurers.
The Dominion operates under Canada’s world-class financial services regime. As a result of strong regulatory oversight and a sound financial services sector, Canada’s financial institutions have fared relatively well in the recent global financial crisis. The Dominion is a federal financial institution, subject to the financial and other requirements of The Insurance Companies Act (Canada) (the "Act"). The solvency of The Dominion and other federal financial institutions is regulated by the Office of the Superintendent of Financial Institutions (OSFI), as well as provincial insurance regulators.
The Dominion's insurance liabilities are backed by a conservative investment portfolio. We invest in high-quality fixed income securities in order to fund ongoing claims payments. These investments consist mainly of government securities and investment-grade corporate bonds, debentures and preferred shares. In addition to the investments held to pay claims, The Dominion has investments supporting shareholder capital, which serve as a buffer for large unusual losses or unexpected increases in existing claims liabilities. Investments supporting The Dominion's shareholder capital are comprised mostly of high quality common shares from Canadian and foreign “blue chip” corporations. As a result, The Dominion's shareholder capital fluctuates with changes in global equity market values. The Dominion addresses this volatility by carrying capital in excess of regulatory requirements.
The Dominion maintains shareholder capital in excess of regulatory requirements. The Act requires The Dominion to maintain adequate levels of capital to fulfill its obligations to policyholders. OSFI has established a supervisory target Minimum Capital Test (MCT) result of 150% to provide a safety buffer above the legally required minimum MCT result of 100%.2 The Dominion maintains capital in excess of the amount required by OSFI and monitors its capital position on an ongoing basis.3
The Dominion's MCT results, from the time the MCT was first implemented in 2003, are as follows:
| 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 |
| 194% | 206% | 238% | 257% | 227% | 182% | 201% |
The Dominion's MCT declined in 2008 as a result of declines in common stock market values. The MCT increased in 2009 as a result of improved market values of bonds and common stocks, as well as The Dominion's decision to reduce its holdings of common stocks and make a corresponding increase in its investment in bonds. The Dominion's December 31, 2009 MCT result of 201% represents $175 million in excess capital above OSFI's supervisory target MCT of 150%.
The Dominion enters into reinsurance agreements with other insurers in order to limit its exposure to significant losses. The Dominion's reinsurance treaties are renewed annually. As part of the annual renewal process, management reviews the financial performance and condition of reinsurers and only those that have at least an ‘A’ credit rating at the time of renewal are accepted on our reinsurance program for the year.
The Dominion has not acquired an interactive independent financial rating. Some rating agencies provide “public data” ratings for entities, like The Dominion, that do not pay for an interactive rating. Public data ratings are based entirely on the rating agency’s analysis of publicly available financial information and do not benefit from confidential internal information, nor from interaction with the company’s management. In management’s opinion, public data ratings do not provide a complete assessment of the financial strength and agility of a company and its management. A.M. Best has provided public data ratings for The Dominion as follows:
| 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 |
| B++ | A- | A- | A- | A- | A- | A- | A- | A- | B++ |
A.M.Best describes their ratings from B+ to A++ to be “secure.” A.M. Best states that B++ is assigned to “companies that in our opinion have a good ability to meet their ongoing insurance obligations.”
The Dominion's commitment to you comes backed by a strong and stable financial history. When you insure with The Dominion, you have the ongoing confidence that the things you care about are protected.
1 Stakeholders may obtain financial and other information on the System for Electronic Document Analysis and Retrieval (SEDAR) website at www.sedar.com.
2 MCT is the ratio of capital available divided by capital required.
3 Quarterly and annual financial information and information regarding The Dominion's Minimum Capital Test is publicly available on the OSFI website at http://www.osfi-bsif.gc.ca/osfi/index_e.aspx?ArticleID=568.