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PD-30 Lessons Learned Implementation of CICA 3855

2007 Annual Meeting – Vancouver. PD-30 Lessons Learned Implementation of CICA 3855. Blake A. Hill, AVP & Actuary. Review started Early (Summer ’06) Cross functional approach Actuaries, Accountants and Investments all at table to prepare and review Quarterly CALM implementation

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PD-30 Lessons Learned Implementation of CICA 3855

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  1. 2007 Annual Meeting – Vancouver PD-30 Lessons LearnedImplementation of CICA 3855 Blake A. Hill, AVP & Actuary

  2. Review started Early (Summer ’06) Cross functional approach Actuaries, Accountants and Investments all at table to prepare and review Quarterly CALM implementation Bigger issue than 3855 Required review of process Ensure 3855 fit into timelines of reporting Investment Systems Investment Reporting Opening Balance Sheet Financial Reporting CALM Reserve Roll forward 2007 Annual Meeting Assemblée annuelle 2007 Early Stages

  3. Investment Systems Not a big change Maintained old Book Value approach with additional details to get Statement Value Investment Reporting Additional breakdown good but.. Need more details still to ensure proper accounting of special circumstances I.E. Mortgage Prepayment Break Fees vs. MVA into proper accounting Fee Income, Capitalized Yield Spread 2007 Annual Meeting Assemblée annuelle 2007 Issues

  4. Opening Balance Sheet Started work very early on the process Used experience with past PGAAP work Tight controls on who can post entries Add Accounting Type to monitor direct impact of 3855 on B/S CGAAP Accnt + Transition Accnt = 3855 Accnt Unanticipated Issues HFT assets backing liabilities and AFS assets backing surplus co mingled 2007 Annual Meeting Assemblée annuelle 2007 Issues

  5. Opening Balance Sheet CALM Reserve If Loans (Private Debt & Mortgages) are disinvested Sold at MV but currently held at Book Correct, but if not actually sold creates issues Deferred Net Gains Removal is a benefit of 3855 as it reduces confusion and work effort to properly account for in reserves 2007 Annual Meeting Assemblée annuelle 2007 Issues

  6. Financial Reporting CALM Reserve Roll Forward Re tooling of process to capture additional FMV changes To simplify reconciliation, add 100% of asset change to reserves then adjust where necessary Getting necessary information from Expected (AXIS) and Actuals very theoretical for sometimes small impacts Currently back under review to better simplify explanations Overall great learning opportunity Really had to dig in and understand all the interactions with CALM 2007 Annual Meeting Assemblée annuelle 2007 Issues

  7. Financial Reporting How and where to split and report changes in asset values in an SOE More and more detail on investment income components and by asset type needed Comparison to USGAAP CGAAP impact is neutral but by line item in an SOE material differences 2007 Annual Meeting Assemblée annuelle 2007 Issues

  8. Tax Reserves Impact of 3855 with and without pending legislation Need to consider CLIFR guidance Not yet finalized, carryover impact from changes across financial reporting years 2007 Annual Meeting Assemblée annuelle 2007 Issues

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