Bank Act (S.C. 1991, c. 46)

Marginal note:Restriction on securities activities

415. A bank shall not deal in Canada in securities to the extent prohibited or restricted by such regulations as the Governor in Council may make for the purposes of this section.

Marginal note:Restriction on insurance business

• 416. (1) A bank shall not undertake the business of insurance except to the extent permitted by this Act or the regulations.

• Marginal note:Restriction on acting as agent

  (2) A bank shall not act in Canada as agent for any person in the placing of insurance and shall not lease or provide space in any branch in Canada of the bank to any person engaged in the placing of insurance.

• Marginal note:Regulations

  (3) The Governor in Council may make regulations respecting the matters referred to in subsection (1) and regulations respecting relations between banks and

  • (a) entities that undertake the business of insurance; or

  • (b) insurance agents or insurance brokers.

• Marginal note:Saving

  (4) Nothing in this section precludes a bank from

  • (a) requiring insurance to be placed by a borrower for the security of the bank; or

  • (b) obtaining group insurance for its employees or the employees of any bodies corporate in which it has a substantial investment pursuant to section 468.

• (5) [Repealed, 1997, c. 15, s. 45]

• Definition of “business of insurance”

  (6) In this section, “business of insurance” includes

  • (a) the issuance of any annuity if the liability in respect of the annuity is contingent on the death of a person; and

  • (b) the issuance of any debt obligation, any of whose terms and conditions are established on the basis of mortality considerations, under which the issuer is obliged to make periodic payments.

Marginal note:Restriction on leasing

417. A bank shall not engage in Canada in any personal property leasing activity in which a financial leasing entity, as defined in subsection 464(1), is not permitted to engage.

Marginal note:Restriction on residential mortgages

• 418. (1) A bank shall not make a loan in Canada on the security of residential property in Canada for the purpose of purchasing, renovating or improving that property, or refinance such a loan, if the amount of the loan, together with the amount then outstanding of any mortgage having an equal or prior claim against the property, would exceed 80 per cent of the value of the property at the time of the loan.

• Marginal note:Exception

  (2) Subsection (1) does not apply in respect of

  • (a) a loan made or guaranteed under the National Housing Act or any other Act of Parliament by or pursuant to which a different limit on the value of property on the security of which the bank may make a loan is established;

  • (b) a loan if repayment of the amount of the loan that exceeds the maximum amount set out in subsection (1) is guaranteed or insured by a government agency or a private insurer approved by the Superintendent;

  • (c) the acquisition by the bank from an entity of securities issued or guaranteed by the entity that are secured on any residential property, whether in favour of a trustee or otherwise, or the making of a loan by the bank to the entity against the issue of such securities; or

  • (d) a loan secured by a mortgage where

    • (i) the mortgage is taken back by the bank on a property disposed of by the bank, including where the disposition is by way of a realization of a security interest, and

    • (ii) the mortgage secures payment of an amount payable to the bank for the property.