Canada's banking and insurance regulator, the Office of the Superintendent of Financial Institutions (OSFI), has proposed a new guideline for residential mortgage insurers, outlining OSFI’s expectations on prudent underwriting governance, internal controls, and risk management. Mortgage insurance is designed to protect mortgage lenders against borrower default. "Given the exposure to potential losses, a mortgage insurer’s safety and soundness is strongly influenced by its mortgage insurance underwriting policies, practices, and risk management," OSFI said in its consultation notice. The proposed guidance would act as a companion policy to Guideline B-20 on Residential Mortgage Underwriting Practices and Procedures, implemented in 2012, which set underwriting and acquisition standards for mortgage providers. OSFI stressed that Guideline B-20's focus on the mortgage origination process left insurers without clearly defined regulatory expectations. The main objectives of the Guideline
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