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

Act current to 2016-10-11 and last amended on 2016-06-22. Previous Versions

Marginal note:Warranties of agents
  •  (1) A person signing a security, as authenticating trustee, registrar, transfer agent or other person entrusted by the issuer with the signing of the security, warrants to a purchaser for value without notice that

    • (a) the security is genuine;

    • (b) the person’s acts in connection with the issue of the security are within the person’s authority; and

    • (c) the person has reasonable grounds for believing that the security is in the form and within the amount the issuer is authorized to issue.

  • Marginal note:Limitation of liability

    (2) Unless otherwise agreed, a person referred to in subsection (1) does not assume any further liability for the validity of a security.

Marginal note:Title of purchaser
  •  (1) Subject to Part VII, on delivery of a security the purchaser acquires the rights in the security that the purchaser’s transferor had or had authority to convey, except that the position of a purchaser who has been a party to any fraud or illegality affecting the security or who as a prior holder had notice of an adverse claim is not improved by taking from a later bona fide purchaser.

  • Marginal note:Title of bona fide purchaser

    (2) A bona fide purchaser, in addition to acquiring the rights of a purchaser, also acquires the security free from any adverse claim.

  • Marginal note:Limited interest purchaser

    (3) A purchaser of a limited interest acquires rights only to the extent of the interest purchased.

Marginal note:Deemed notice of adverse claim

 A purchaser of a security, or any securities broker for a seller or purchaser, is deemed to have notice of an adverse claim if

  • (a) the security, whether in bearer form or registered form, has been endorsed “for collection” or “for surrender” or for some other purpose not involving transfer; or

  • (b) the security is in bearer form and has on it a statement that it is the property of a person other than the transferor, except that the mere writing of a name on a security is not such a statement.

Marginal note:Notice of fiduciary duty

 Notwithstanding that a purchaser, or any securities broker for a seller or purchaser, has notice that a security is held for a third person by, or is registered in the name of or endorsed by, a fiduciary, neither the purchaser nor the securities broker has any duty to inquire into the rightfulness of the transfer or any notice of an adverse claim, except that if the purchaser or securities broker for the seller or purchaser knows that the consideration is to be used for, or that the transaction is for, the personal benefit of the fiduciary or is otherwise in breach of the fiduciary’s duty, the purchaser or securities broker is deemed to have notice of an adverse claim.

Marginal note:Staleness as notice

 An event that creates a right to immediate performance of the principal obligation evidenced by a security or that sets a date on or after which the security is to be presented or surrendered for redemption or exchange is not of itself notice of an adverse claim, except in the case of a purchase

  • (a) made more than one year after any date set for such a presentation or surrender; or

  • (b) made more than six months after any date set for payment of money against such a presentation or surrender if funds are available for payment on that date.

Marginal note:Warranties to issuer
  •  (1) A person who presents a security for registration of transfer or for payment or exchange warrants to the issuer that the person is entitled to the registration, payment or exchange, except that a purchaser for value without notice of an adverse claim who receives a new, reissued or re-registered security on registration of transfer warrants only that the purchaser has no knowledge of any unauthorized signature in a necessary endorsement.

  • Marginal note:Warranties to purchaser

    (2) A person by transferring a security to a purchaser for value warrants only that

    • (a) the transfer is effective and rightful;

    • (b) the security is genuine and has not been materially altered; and

    • (c) the person knows of nothing that might impair the validity of the security.

  • Marginal note:Warranties of intermediary

    (3) Where a security is delivered by an intermediary known by the purchaser to be entrusted with delivery of the security on behalf of another or with collection of a draft or other claim to be collected against that delivery, the intermediary by that delivery warrants only the intermediary’s own good faith and authority even if the intermediary has purchased or made advances against the draft or other claim to be collected against the delivery.

  • Marginal note:Warranties of pledgee

    (4) A pledgee or other holder for purposes of security who redelivers a security received, or after payment and on order of the debtor delivers that security to a third person, gives only the warranties of an intermediary under subsection (3).

  • Marginal note:Warranties of securities broker

    (5) A securities broker gives to the broker’s customer, to the issuer and to a purchaser, as the case may be, the warranties provided in subsections (1) to (4) and has the rights and privileges of a purchaser under those subsections, and those warranties of and in favour of the broker acting as an agent are in addition to warranties given by the broker’s customer and warranties given in favour of the broker’s customer.

Marginal note:Right to compel endorsement

 Where a security in registered form is delivered to a purchaser without a necessary endorsement, the purchaser may become a bona fide purchaser only as of the time the endorsement is supplied, but against the transferor the transfer is complete on delivery and the purchaser has a specifically enforceable right to have any necessary endorsement supplied.

Definition of appropriate person

  •  (1) In this section, section 115, subsections 122(1), 125(4) and 130(1) and section 134, appropriate person means

    • (a) the person specified by the security or by special endorsement to be entitled to the security;

    • (b) if a person described in paragraph (a) is described as a fiduciary but is no longer serving in the described capacity, either that person or that person’s successor;

    • (c) if the security or endorsement mentioned in paragraph (a) specifies more than one person as fiduciaries and one or more of those persons are no longer serving in the described capacity, the remaining fiduciary or fiduciaries, whether or not a successor has been appointed;

    • (d) if a person described in paragraph (a) is a natural person and is without capacity to act by reason of death, incompetence, minority or other reason, the person’s fiduciary;

    • (e) if the security or endorsement mentioned in paragraph (a) specifies more than one person with right of survivorship and by reason of death not all of the persons can sign, the survivor or survivors;

    • (f) a person having power to sign under any applicable law or a power of attorney; or

    • (g) to the extent that a person described in any of paragraphs (a) to (f) may act through an agent, the person’s authorized agent.

  • Determining an appropriate person

    (2) Whether the person signing is an appropriate person is determined as of the time of signing, and an endorsement by such a person does not become unauthorized for the purposes of this Part by reason of any subsequent change of circumstances.

Marginal note:Endorsement
  •  (1) An endorsement of a security in registered form is made when an appropriate person signs, either on the security or on a separate document, an assignment or transfer of the security or a power to assign or transfer it, or when the signature of an appropriate person is written without more on the back of the security.

  • Marginal note:Special or blank

    (2) An endorsement may be special or in blank.

  • Marginal note:Blank endorsement

    (3) An endorsement in blank includes an endorsement to bearer.

  • Marginal note:Special endorsement

    (4) A special endorsement specifies the person to whom the security is to be transferred, or who has power to transfer it.

  • Marginal note:Right of holder

    (5) A holder may convert an endorsement in blank into a special endorsement.

Marginal note:Immunity of endorser

 Unless otherwise agreed, the endorser by the endorsement assumes no obligation that the security will be honoured by the issuer.

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