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

Marginal note:Exception — conditions before acquisition

• 76.01 (1) A company may permit any of its subsidiaries to acquire shares of the company through the issuance of those shares by the company to the subsidiary if the conditions prescribed for the purposes of this subsection are met before the subsidiary acquires the shares.

• Marginal note:Conditions after acquisition

  (2) After a subsidiary has acquired shares under the purported authority of subsection (1), the conditions prescribed for the purposes of this subsection must be met.

• Marginal note:Non-compliance with conditions

  (3) If a company permits any of its subsidiaries to acquire shares of the company under the purported authority of subsection (1) and one or more of the conditions prescribed for the purposes of subsections (1) and (2) were not met, are not met or cease to be met, as the case may be, then, despite section 16 and subsection 70(2), the company must comply with the prescribed requirements.

Marginal note:Holding in market-indexed segregated fund

76.1 A company may hold shares of the company or shares or ownership interests of an entity that controls the company, if

• (a) the shares or ownership interests are assets of a fund maintained by the company as required by paragraph 451(b); and

• (b) the assets of the fund reflect the securities upon which a generally recognized market index is based and the weighting of those securities in that index.

Marginal note:Cancellation of shares

• 77. (1) Subject to subsection (2), where a company purchases shares of the company or fractions thereof or redeems or otherwise acquires shares of the company, the company shall cancel those shares.

• Marginal note:Requirement to sell

  (2) Where a company or any of its subsidiaries, through the realization of security, acquires any shares of the company or of any body corporate that controls the company or any ownership interests in an unincorporated entity that controls the company, the company shall, or shall cause its subsidiaries to, as the case may be, within six months after the day of the realization, sell or otherwise dispose of the shares or ownership interests.

Marginal note:Subsidiary holding shares

78. Subject to the regulations, a former-Act company shall cause any subsidiary of the company that holds shares of the company, or of any body corporate that controls the company, or any ownership interests of any unincorporated entity that controls the company to sell or otherwise dispose of those shares or ownership interests within six months after the day this section comes into force.

Marginal note:Reduction of capital

• 79. (1) The stated capital of a company may be reduced by special resolution.

• Marginal note:Limitation

  (2) A company shall not reduce its stated capital by special resolution if there are reasonable grounds for believing that the company is, or the reduction 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).

• Marginal note:Contents of special resolution

  (3) A special resolution to reduce the stated capital of a company shall specify the stated capital account or accounts from which the reduction of stated capital effected by the special resolution will be deducted.

• Marginal note:Approval by Superintendent

  (4) A special resolution to reduce the stated capital of a company has no effect until it is approved in writing by the Superintendent.

• Marginal note:Exception

  (4.1) Subsection (4) does not apply if

  • (a) the reduction in the stated capital is made solely as a result of changes made to the accounting principles referred to in subsection 331(4); and

  • (b) there is to be no return of capital to shareholders or policyholders as a result of the reduction.

• Marginal note:Conditions for approval

  (5) No approval to reduce the stated capital of a company may be given by the Superintendent unless application therefor is made within three months after the time of the passing of the special resolution and a copy of the special resolution, together with a notice of intention to apply for approval, has been published in the Canada Gazette.

• Marginal note:Statements to be submitted

  (6) In addition to evidence of the passing of a special resolution to reduce the stated capital of a company and of the publication thereof, statements showing

  • (a) the number of the company’s shares issued and outstanding,

  • (b) the results of the voting by policyholders and by class of shares of the company,

  • (c) the company’s assets and liabilities, and

  • (d) the reason why the company seeks the reduction of capital

  shall be submitted to the Superintendent at the time of the application for approval of the special resolution.