Insurance Companies Act (S.C. 1991, c. 47)

Act current to 2016-08-01 and last amended on 2016-06-22. Previous Versions

SUBDIVISION 3Directors and Officers

Duties

Marginal note:Duty to manage
  •  (1) Subject to this Act, the directors of an insurance holding company shall manage or supervise the management of the business and affairs of the insurance holding company.

  • Marginal note:Specific duties

    (2) Without limiting the generality of subsection (1), the directors of an insurance holding company shall

    • (a) establish an audit committee to perform the duties referred to in subsections 829(3) and (4);

    • (b) establish procedures to resolve conflicts of interest, including techniques for the identification of potential conflict situations and for restricting the use of confidential information;

    • (c) designate a committee of the board of directors to monitor the procedures referred to in paragraph (b); and

    • (d) establish investment and lending policies, standards and procedures in accordance with section 968.

  • Marginal note:Exception

    (3) Paragraph (2)(a) does not apply to the directors of an insurance holding company if

    • (a) all the voting shares of the insurance holding company are beneficially owned by a Canadian financial institution described by any of paragraphs (a) to (d) of the definition financial institution in subsection 2(1); and

    • (b) the audit committee of the Canadian financial institution referred to in paragraph (a) performs for and on behalf of the insurance holding company all the functions that would otherwise be required to be performed by the audit committee of the insurance holding company under this Part.

  • 2001, c. 9, s. 465.
Marginal note:Duty of care
  •  (1) Every director and officer of an insurance holding company in exercising any of the powers of a director or an officer and discharging any of the duties of a director or an officer shall

    • (a) act honestly and in good faith with a view to the best interests of the insurance holding company; and

    • (b) exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances.

  • Marginal note:Duty to comply

    (2) Every director, officer and employee of an insurance holding company shall comply with this Act, the regulations, the insurance holding company’s incorporating instrument and the by-laws of the insurance holding company.

  • Marginal note:No exculpation

    (3) No provision in any contract, in any resolution or in the by-laws of an insurance holding company relieves any director, officer or employee of the insurance holding company from the duty to act in accordance with this Act and the regulations or relieves a director, officer or employee from liability for a breach thereof.

  • 2001, c. 9, s. 465.

Qualification and Number — Directors

Marginal note:Minimum number of directors
  •  (1) An insurance holding company shall have at least seven directors.

  • Marginal note:Residency requirement

    (2) At least one half of the directors of an insurance holding company that is a subsidiary of a foreign institution and a majority of the directors of any other insurance holding company must be, at the time of each director’s election or appointment, resident Canadians.

  • 2001, c. 9, s. 465;
  • 2007, c. 6, s. 319.
Marginal note:Disqualified persons

 The following persons are disqualified from being directors of an insurance holding company:

  • (a) a person who is less than eighteen years of age;

  • (b) a person who is of unsound mind and has been so found by a court in Canada or elsewhere;

  • (c) a person who has the status of a bankrupt;

  • (d) a person who is not a natural person;

  • (e) a person who is prohibited by subsection 793(7) or section 945 or 955 from exercising voting rights attached to shares of the insurance holding company;

  • (f) a person who is an officer, director or full-time employee of an entity that is prohibited by subsection 793(7) or section 945 or 955 from exercising voting rights attached to shares of the insurance holding company;

  • (f.1) a person who is an officer, director, employee or agent of — or any other person acting on behalf of — an eligible agent within the meaning of section 406.1;

  • (g) [Repealed, 2013, c. 40, s. 165]

  • (h) a minister of Her Majesty in right of Canada or in right of a province; and

  • (i) a person who is an agent or employee of the government of a foreign country or any political subdivision thereof.

  • 2001, c. 9, s. 465;
  • 2012, c. 19, s. 344, c. 31, s. 141;
  • 2013, c. 40, s. 165.
Marginal note:No requirement to hold shares

 A director of an insurance holding company is not required to hold shares of the insurance holding company.

  • 2001, c. 9, s. 465.
Marginal note:Limit on directors

 No more than 15 per cent of the directors of an insurance holding company may, at each director’s election or appointment, be employees of the insurance holding company or a subsidiary of the insurance holding company, except that up to four persons who are employees of the insurance holding company or a subsidiary of the insurance holding company may be directors of the insurance holding company if those directors constitute not more than one half of the directors of the insurance holding company.

  • 2001, c. 9, s. 465.

Election and Tenure — Directors

Marginal note:Number of directors
  •  (1) Subject to subsection 796(1) and sections 803 and 851, the directors of an insurance holding company shall, by by-law, determine the number of directors or the minimum and maximum number of directors, but no by-law that decreases the number of directors shortens the term of an incumbent director.

  • Marginal note:Election at annual meeting

    (2) A by-law made pursuant to subsection (1) that provides for a minimum and maximum number of directors may provide that the number of directors to be elected at any annual meeting of the shareholders be such number as is fixed by the directors prior to the annual meeting.

  • 2001, c. 9, s. 465.
Marginal note:Election or appointment as director

 The election or appointment of a person as a director is subject to the following:

  • (a) the person was present at the meeting when the election or appointment took place and did not refuse to hold office as a director; or

  • (b) the person was not present at the meeting when the election or appointment took place but

    • (i) consented in writing to hold office as a director before the election or appointment or within 10 days after it, or

    • (ii) acted as a director after the election or appointment.

  • 2005, c. 54, s. 327.
Marginal note:Term of directors
  •  (1) Except where this Part or the by-laws of an insurance holding company provide for cumulative voting, the insurance holding company may, by by-law, provide that the directors be elected for terms of one, two or three years.

  • Marginal note:Term of one, two or three years

    (2) A director elected for a term of one, two or three years holds office until the close of the first, second or third annual meeting of shareholders, as the case may be, following the election of the director.

  • Marginal note:No stated term

    (3) A director who is not elected for an expressly stated term of office ceases to hold office at the close of the next annual meeting of shareholders following the election of the director.

  • Marginal note:Tenure of office

    (4) It is not necessary that all directors elected at a meeting of shareholders hold office for the same term.

  • Marginal note:Tenure of office

    (5) If a by-law of an insurance holding company provides that the directors be elected for a term of two or three years, it may also provide that the term of office of each director be for the whole of that term, or that, as nearly as may be, one half of the directors retire each year if the term is two years, and that one third of the directors retire each year if the term is three years.

  • Marginal note:Composition requirements

    (6) Where a director of an insurance holding company is elected or appointed for a term of more than one year, the insurance holding company shall comply with subsection 796(2) and section 799 at each annual meeting of shareholders during the director’s term of office as if that director were elected or appointed on that date.

  • 2001, c. 9, s. 465.
 
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