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

Marginal note:Duty to manage

• 794. (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.

Marginal note:Duty of care

• 795. (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.

Marginal note:Minimum number of directors

• 796. (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.