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

Act current to 2016-08-01 and last amended on 2016-06-22. Previous Versions

Marginal note:Application

 This Division applies in respect of a trust indenture if the subordinated indebtedness issued or to be issued under the trust indenture is part of a distribution to the public.

Marginal note:Exemption

 The Superintendent may, in writing, exempt a trust indenture from the application of this Division if, in the Superintendent’s opinion, the trust indenture and the subordinated indebtedness are subject to a law of a province or other jurisdiction, other than Canada, that is substantially equivalent to the provisions of this Act relating to trust indentures.

Marginal note:Conflict of interest
  •  (1) No person shall be appointed as trustee if at the time of the appointment there is a material conflict of interest between the person’s role as trustee and any other role of the person.

  • Marginal note:Eliminating conflict of interest

    (2) A trustee shall, within ninety days after the trustee becomes aware that a material conflict of interest exists,

    • (a) eliminate the conflict of interest; or

    • (b) resign from office.

Marginal note:Validity despite conflict

 A trust indenture and any subordinated indebtedness issued thereunder are valid notwithstanding a material conflict of interest of the trustee.

Marginal note:Removal of trustee

 If a trustee is appointed in contravention of subsection 320(1) or if a trustee contravenes subsection 320(2), any interested person may apply to a court for an order that the trustee be replaced, and the court may make an order on such terms as it thinks fit.

Marginal note:Trustee qualifications

 A trustee, or at least one of the trustees if more than one is appointed, must be

  • (a) a trust company pursuant to subsection 57(2) of the Trust and Loan Companies Act; or

  • (b) a body corporate that is incorporated by or under an Act of the legislature of a province and authorized to carry on business as a trustee.

  • 1991, c. 47, ss. 323, 758;
  • 2007, c. 6, s. 213.
Marginal note:List of security holders
  •  (1) A holder of subordinated indebtedness issued under a trust indenture may, on payment to the trustee of a reasonable fee and on delivery of a statutory declaration to the trustee, require the trustee to provide, within fifteen days after the delivery to the trustee of the statutory declaration, a list setting out

    • (a) the names and addresses of the registered holders of the outstanding subordinated indebtedness,

    • (b) the principal amount of outstanding subordinated indebtedness owned by each such holder, and

    • (c) the aggregate principal amount of subordinated indebtedness outstanding

    as shown on the records maintained by the trustee on the day the statutory declaration is delivered to that trustee.

  • Marginal note:Duty of issuer

    (2) On the demand of a trustee, the issuer of subordinated indebtedness shall provide the trustee with the information required to enable the trustee to comply with subsection (1).

  • Marginal note:Where applicant is entity

    (3) Where the person requiring the trustee to provide a list under subsection (1) is an entity, the statutory declaration required under that subsection shall be made by a director or an officer of the entity or a person acting in a similar capacity.

  • Marginal note:Contents of statutory declaration

    (4) The statutory declaration required under subsection (1) must state

    • (a) the name and address of the person requiring the trustee to provide the list and, if the person is an entity, the address for service thereof; and

    • (b) that the list will not be used except as permitted by subsection (5).

  • Marginal note:Use of list

    (5) No person shall use a list obtained under this section except in connection with

    • (a) an effort to influence the voting of the holders of subordinated indebtedness;

    • (b) an offer to acquire subordinated indebtedness; or

    • (c) any other matter relating to the subordinated indebtedness or the affairs of the issuer or guarantor thereof.

Marginal note:Compliance with trust indentures
  •  (1) An issuer or a guarantor of subordinated indebtedness issued or to be issued under a trust indenture shall, before undertaking

    • (a) the issue, certification and delivery of subordinated indebtedness under the trust indenture, or

    • (b) the satisfaction and discharge of the trust indenture,

    provide the trustee with evidence of compliance with the conditions in the trust indenture in respect thereof.

  • Marginal note:Compliance by issuer or guarantor

    (2) On the demand of a trustee, the issuer or guarantor of subordinated indebtedness issued or to be issued under a trust indenture shall provide the trustee with evidence of compliance with the conditions in the trust indenture by the issuer or guarantor in respect of any act to be done by the trustee at the request of the issuer or guarantor.

  • Marginal note:Evidence of compliance

    (3) The following documents constitute evidence of compliance for the purposes of subsections (1) and (2):

    • (a) a statutory declaration or certificate made by a director or an officer of the issuer or guarantor stating that the conditions referred to in subsections (1) and (2) have been complied with;

    • (b) an opinion of legal counsel that the conditions of the trust indenture requiring review by legal counsel have been complied with, if the trust indenture requires compliance with conditions that are subject to review by legal counsel; and

    • (c) an opinion or report of the auditors of the issuer or guarantor, or such other accountant as the trustee selects, that the conditions of the trust indenture have been complied with, if the trust indenture requires compliance with conditions that are subject to review by auditors.

  • Marginal note:Further evidence of compliance

    (4) The evidence of compliance referred to in subsection (3) shall include a statement by the person giving the evidence

    • (a) declaring that the person has read and understands the conditions of the trust indenture referred to in subsections (1) and (2);

    • (b) describing the nature and scope of the examination or investigation on which the person based the certificate, statement or opinion; and

    • (c) declaring that the person has made such examination or investigation as the person believes necessary to enable the statements to be made or the opinions contained or expressed therein to be given.

Marginal note:Trustee may require evidence
  •  (1) On the request of a trustee, the issuer or guarantor of subordinated indebtedness issued under a trust indenture shall provide the trustee with evidence in such form as the trustee requires of compliance with any condition thereof relating to any action required or permitted to be taken by the issuer or guarantor under the trust indenture.

  • Marginal note:Certificate of compliance

    (2) At least once in each twelve month period beginning on the date of the trust indenture and at any other time on the demand of a trustee, the issuer or guarantor of subordinated indebtedness issued under a trust indenture shall provide the trustee with a certificate stating that the issuer or guarantor has complied with all requirements contained in the trust indenture that, if not complied with, would, with the giving of notice, lapse of time or otherwise, constitute an event of default, or, if there has been failure to so comply, giving particulars thereof.

Marginal note:Notice of default

 A trustee shall, within thirty days after the trustee becomes aware of the occurrence thereof, give to the holders of subordinated indebtedness issued under a trust indenture notice of every event of default arising under the trust indenture and continuing at the time the notice is given, unless the trustee believes on reasonable grounds that it is in the best interests of the holders of the subordinated indebtedness to withhold the notice and so informs the issuer and guarantor in writing.

Marginal note:Duty of care
  •  (1) In exercising a trustee’s powers and discharging a trustee’s duties, the trustee shall

    • (a) act honestly and in good faith with a view to the best interests of the holders of the subordinated indebtedness issued under the trust indenture; and

    • (b) exercise the care, diligence and skill of a reasonably prudent trustee.

  • Marginal note:Reliance on statements

    (2) Notwithstanding subsection (1), a trustee is not liable if the trustee relies in good faith on statements contained in a statutory declaration, certificate, opinion or report that complies with this Act or the trust indenture.

 
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