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

Marginal note:Transfers from participating account

462. The only transfers that may be made from a participating account maintained pursuant to section 456 are

• (a) transfers made pursuant to sections 461 and 463;

• (b) transfers made in respect of transfers or reinsurance of all or any portion of the participating policies in respect of which the participating account is maintained;

• (c) transfers, with the approval of the Superintendent, of amounts that can be reasonably attributed to sources not related to the participating policies in respect of which the account is or has been maintained, if the transfer would not, in the opinion of the actuary of the company, materially affect the company’s ability to continue to comply with its dividend or bonus policy, maintain the levels or rates of dividends or bonuses paid to the company’s participating policyholders or meet the company’s obligations under its participating policies; and

• (d) transfers made in respect of the conversion of a mutual company into a company with common shares.

Marginal note:Transfers to segregated funds from participating account

• 463. (1) A company may transfer from a participating account maintained pursuant to section 456 to a segregated fund maintained pursuant to section 451 an amount not exceeding the amount determined in accordance with the formula

  A - (B - C)

  where

  A 

  is 25 per cent of the unappropriated earned surplus of that account;

  B 

  is the aggregate amount of all previous transfers from that account to the segregated funds; and

  C 

  is the aggregate amount returned to the participating account from the segregated funds.

• Marginal note:Ceiling

  (2) The aggregate amount of all transfers from participating accounts maintained pursuant to section 456 to the segregated funds maintained pursuant to section 451 may not exceed the amount determined in accordance with the formula

  A - (B - C)

  where

  A 

  is 10 per cent of the aggregate unappropriated earned surplus of the participating accounts;

  B 

  is the aggregate amount of all previous transfers from those accounts to those funds; and

  C 

  is the aggregate amount returned to those accounts from those funds.

Marginal note:Declaration of policy dividend or bonus

• 464. (1) Subject to this section, the directors of a company that issues participating policies may declare, and the company may pay or otherwise satisfy, a dividend, bonus or other benefit on those policies in accordance with its dividend or bonus policy established pursuant to paragraph 165(2)(e).

• Marginal note:Report of actuary

  (2) The company’s actuary shall, in writing, report to the directors on the fairness to participating policyholders of a proposed dividend, bonus or other benefit and whether it is in accordance with the policy. The directors shall consider the actuary’s report before declaring the dividend, bonus or other benefit.

• Marginal note:Generally accepted actuarial practice

  (2.1) The report of the actuary referred to in subsection (2) shall be prepared in accordance with generally accepted actuarial practice with such changes as may be determined by the Superintendent and any additional directions that may be made by the Superintendent.

• Marginal note:When dividend not to be declared

  (3) The directors of a company shall not declare a dividend, bonus or other benefit to participating policyholders if there are reasonable grounds for believing that the company is, or the payment or other satisfaction would cause the company to be, in contravention of subsection 515(1), any regulation made under subsection 515(2) or any order made under subsection 515(3).