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

Act current to 2014-10-27 and last amended on 2014-06-19. Previous Versions

Borrowing Costs

Definition of “cost of borrowing”

 For the purposes of this section and sections 598.1 to 605, “cost of borrowing” means, in respect of a loan or an advance on the security or against the cash surrender value of a policy made by a foreign company,

  • (a) the interest or discount applicable to the loan or advance;

  • (b) any amount charged in connection with the loan or advance that is payable by the borrower to the foreign company; and

  • (c) any charge prescribed to be included in the cost of borrowing.

For those purposes, however, “cost of borrowing” does not include any charge prescribed to be excluded from the cost of borrowing.

  • 1991, c. 47, s. 598;
  • 1997, c. 15, s. 307;
  • 2001, c. 9, s. 443.
Marginal note:Rebate of borrowing costs
  •  (1) Where a foreign company makes a loan in respect of which the disclosure requirements of section 599 apply, and the loan is not secured by a mortgage on real property and is required to be repaid either on a fixed future date or by instalments, the foreign company shall, if there is a prepayment of the loan, rebate to the borrower a portion of the charges included in the cost of borrowing in respect of the loan.

  • Marginal note:Exception

    (2) The charges to be rebated do not include the interest or discount applicable to the loan.

  • Marginal note:Regulations

    (3) The Governor in Council may make regulations governing the rebate of charges under subsection (1). The rebate shall be made in accordance with those regulations.

  • 1997, c. 15, s. 307.
Marginal note:Disclosing borrowing costs
  •  (1) A foreign company shall not include in its assets in Canada any loan to a natural person that is repayable in Canada unless the cost of borrowing, as calculated and expressed in accordance with section 600, and other prescribed information have been disclosed by the foreign company to the borrower at the prescribed time and place and in the prescribed form and manner.

  • Marginal note:Non-application

    (2) Subsection (1) does not apply in respect of a loan that is of a prescribed class of loans.

  • 1991, c. 47, s. 599;
  • 1997, c. 15, s. 307;
  • 2012, c. 5, s. 146.
Marginal note:Calculating borrowing costs

 The cost of borrowing shall be calculated, in the prescribed manner, on the basis that all obligations of the borrower are duly fulfilled and shall be expressed as a rate per annum and, in prescribed circumstances, as an amount in dollars and cents.