OFF-BALANCE SHEET LIABILITIES AND CONTINGENCIES
In addition to litigation relating to claims made in respect of insurance policies written by us, we are subject to other litigation arising in the normal course of conducting our business. We are of the opinion that this non-claims litigation will not have a significant effect on our financial position, results of operations, or cash flows. Refer to Section 12 — “Risk management”, Claims reserving risk, which describes our process for ensuring appropriate provisions are recorded for reported and unreported claims.
We participate in a securities lending program managed by a major Canadian and US financial institution, whereby we lend securities we own to other financial institutions to allow them to meet delivery commitments. The lending agents assume the risk of borrower default associated with the lending activity. As at December 31, 2016, securities with an estimated fair value of $527.3 million (2015: $509.3 million) have been loaned and securities with an estimated fair value of $545.0 million (2015: $524.6 million) have been received as collateral from the financial institutions. Lending collateral as at December 31, 2016 was 100.0% (2015: 100.0%) held in cash and government-backed securities. The securities loaned under this program have not been removed from “Investments” on the consolidated balance sheet because we retain the risks and rewards of ownership.
The financial compensation we receive in exchange for securities lending is reflected in the consolidated statement of comprehensive income in “Interest”.