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

Marginal note:Compensation association

• 591. (1) Every foreign company that is insuring risks that fall within a class of insurance shall become and remain a member of any compensation association designated by order of the Minister for that class of insurance.

• Marginal note:Designation limitation

  (1.1) A compensation association shall not be designated under subsection (1) unless, in the opinion of the Minister, it has the authority to levy an assessment on each of its members of not less than eighty-five one hundredths of one per cent of the member’s average annual premium income from policies that are eligible for compensation from the association.

• Marginal note:Exceptions

  (2) Subsection (1) does not apply

  • (a) to a foreign company that may reinsure but may not otherwise insure risks;

  • (b) in respect of a class of insurance that, in the opinion of the Minister, is adequately covered by some other compensation plan for that class of insurance;

  • (c) in respect of the insuring in Canada of risks against the loss of, or damage to, property caused by fire, by lightning, by an explosion due to ignition, by smoke or by breakage of or leakage from a sprinkler, from other fire protection equipment or from another fire protection system by a foreign company that is a member of the Fire Mutuals Guarantee Fund; or

  • (d) to a foreign company that is a foreign fraternal benefit society or an exchange.

Marginal note:Segregated funds restricted to foreign life companies

592. Unless authorized to insure risks that fall within the class of life insurance, a foreign company shall not

• (a) insure risks under policies, or

• (b) accept or retain on the direction of a policyholder or beneficiary policy dividends or bonuses, or policy proceeds that are payable on the surrender or maturity of the policy or on the death of the person whose life is insured,

where the liabilities of the foreign company in respect of the policies or the amounts accepted or retained vary in amount depending on the market value of a fund consisting of a specified group of assets.

Marginal note:Where segregated funds required

593. A foreign company that issues policies described in section 592 or accepts or retains amounts so described shall, in respect of those policies or amounts,

• (a) maintain separate accounts; and

• (b) establish and maintain one or more funds consisting of assets in Canada that are segregated from the other assets in Canada of the foreign company and that are specified as the assets on the market value of which the liabilities of the foreign company in respect of those policies or amounts depend.