April 15, 2013 / Page 2
April 15, 2013
To: All Ontario Credit Unions and Caisses Populaires
From: Andy Poprawa, CEO
Subject: Consultation on Proposed Revisions to the Differential Premium System
When the current Differential Premium System (“DPS”) was introduced in 2001, DICO committed to undertake a regular review of the regime in order to determine whether modifications would be appropriate. Since the last review of the system significant changes have occurred in the environment in which Ontario credit unions and caisses populaires operate.
In July 2012, DICO completed an extensive review of the current differential premium system, including the development of a consultation paper that set out the proposed revisions to the regime. As a result of that consultation and the comments received from our stakeholders, DICO decided to revisit the proposal and incorporate some of the suggestions received into a modified proposal, namely:
· Move to a continuous scoring structure for both capital and governance;
· Move to a continuous premium structure;
· Provide additional information regarding scoring for the governance criteria; and
· Move the effective date to invoices issued on or after January 1, 2015.
This revised consultation paper is enclosed for your review and comment. Credit unions are invited to respond in writing with their comments to this paper no later than Friday June 14, 2013. Credit unions will also be provided with the opportunity to offer their feedback though an on-line survey that can be accessed through the following URL: http://www.surveymonkey.com/s/DICO_DPSConsultationSurvey (a link is also available through DICO’s website).
This consultation document is intended to facilitate constructive dialogue concerning its contents. Please note that the proposals in this document are subject to change as a result of the consultation process and as a result of review by the government. The proposals will only become law if the Lieutenant Governor in Council makes an amending regulation under the Credit Unions and Caisses Populaires Act, 1994.
As part of the review of these proposed revisions, credit union and caisse populaire directors and management may wish to consider the following questions:
· What would our credit union/caisse populaire’s deposit insurance premium be under the proposed DPS, given current capital levels and corporate governance ratings?
· If our credit union/caisse populaire is not in the lowest premium tier, based on an analysis of the costs to achieve the lowest premium tier versus financial benefit arising, would this be an appropriate objective?
· If it is a desirable objective, can the credit union/caisse populaire reach the applicable capital level or corporate governance rating by the time the revised DPS is implemented?
· Are there any undesirable impacts or unintended consequences arising?
Your comments and suggestions are valued and appreciated. Please forward any comments no later than Friday June 14, 2013 to the attention of Suzanne Tucker, Manager, Policy & Research by e-mail to or by mail to the address noted above.
We thank you for your consideration and your continued support.