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

Marginal note:Dissolution instrument

• 924 (1) Unless a court has made an order in accordance with subsection 385(1), the Minister may, if satisfied that the insurance holding company has complied with subsection 923(4) and that all the circumstances so warrant, issue letters patent dissolving the insurance holding company.

• Marginal note:Insurance holding company dissolved

  (2) An insurance holding company in respect of which letters patent are issued under subsection (1) is dissolved and ceases to exist on the day stated in the letters patent.

Court-supervised Liquidation

Marginal note:Sections 385 to 406 apply

925 Sections 385 to 406 apply in respect of insurance holding companies, subject to the following:

• (a) references to “company” in those sections are to be read as references to “insurance holding company”;

• (b) references to “this Part” in those sections are to be read as references to “this Division”;

• (c) references to “this Division” in those sections are to be read as references to “this Subdivision”;

• (d) those sections are to be read without reference to “policyholder”;

• (e) the reference to “subsection 331(1)” in paragraph 391(1)(i) is to be read as a reference to “subsection 887(1)”; and

• (f) the reference to “section 668” in subsection 400(2) is to be read as a reference to “section 994”.

DIVISION 7Ownership

Marginal note:Sections 406.1 and 406.2 apply

926 Sections 406.1 and 406.2 apply in respect of insurance holding companies, except that references to “company” in section 406.2 are to be read as references to “insurance holding company”.

Marginal note:Constraining acquisition

• 927 (1) No person, or entity controlled by a person, shall, without the approval of the Minister, purchase or otherwise acquire any share of an insurance holding company or purchase or otherwise acquire control of any entity that holds any share of an insurance holding company if

  • (a) the acquisition would cause the person to have a significant interest in any class of shares of the insurance holding company; or

  • (b) where the person has a significant interest in a class of shares of the insurance holding company, the acquisition would increase the significant interest of the person in that class of shares.

• Marginal note:Amalgamation, etc., constitutes acquisition

  (2) If the entity that would result from an amalgamation, a merger or a reorganization would have a significant interest in a class of shares of an insurance holding company, the entity is deemed to be acquiring a significant interest in that class of shares of the insurance holding company through an acquisition for which the approval of the Minister is required under subsection (1).

• Marginal note:Exemption

  (3) On application by an insurance holding company, other than an insurance holding company in respect of which subsection (4) or (6) applies, the Superintendent may exempt from the application of subsection (1) and section 934 any class of non-voting shares of the insurance holding company if the aggregate book value of the shares of the class is not more than 30 per cent of the aggregate book value of all the outstanding shares of the insurance holding company.

• Marginal note:Limitations on share holdings

  (4) Despite subsection (1), no person may be a major shareholder of an insurance holding company to which subsection 407(6) applies.

• Marginal note:Exception

  (5) Subsection (4) no longer applies in respect of any particular insurance holding company if the Minister makes an order under subsection 407(8) determining that subsection 407(4) no longer applies in respect of a converted company controlled by the insurance holding company.

• Marginal note:Limitations on share holdings

  (6) Despite subsection (1), until a day that is two years after December 31, 1999, no person may have a significant interest in any class of shares of an insurance holding company to which subsection 407(13) applies.

Marginal note:Major shareholder

• 928 (1) If an insurance holding company in respect of which subsection 927(4) applies controls a life company and a person becomes a major shareholder of the life company or of any entity that also controls the life company, the insurance holding company must to do all things necessary to ensure that, on the day that is one year after the person became a major shareholder of the life company or entity that controls the life company,

  • (a) the insurance holding company no longer controls the life company; or

  • (b) the life company or the entity that controls the life company does not have any major shareholder other than the insurance holding company or any entity that the insurance holding company controls.

• Marginal note:Exemption

  (2) Subsection (1) does not apply in respect of a life company with equity of less than two hundred and fifty million dollars, or any other amount that may be prescribed.

• Marginal note:Extension

  (3) If general market conditions so warrant and the Minister is satisfied that the insurance holding company has used its best efforts to be in compliance with subsection (1) on the required day, the Minister may specify a later day as the day from and after which it must comply with that subsection.

Marginal note:Major shareholder

• 928.1 (1) Despite subsection 928(1), if an insurance holding company in respect of which subsection 927(4) applies controls a life company in respect of which subsection 928(1) does not apply by reason of subsection 928(2) and the equity of the life company reaches two hundred and fifty million dollars or more or any other amount that is prescribed and on the day the equity of the life company reaches two hundred and fifty million dollars or more, or the prescribed amount, as the case may be, a person is a major shareholder of the life company or of any entity that also controls the life company, the insurance holding company must do all things necessary to ensure that, on the day that is three years after that day,

  • (a) the insurance holding company no longer controls the life company; or

  • (b) the life company or the entity that controls the life company does not have any major shareholder other than the insurance holding company or any entity that the insurance holding company controls.

• Marginal note:Extension

  (2) If general market conditions so warrant and the Minister is satisfied that the insurance holding company has used its best efforts to be in compliance with subsection (1) on the required day, the Minister may specify a later day as the day from and after which it must comply with that subsection.

Marginal note:Significant interest

• 929 (1) If an insurance holding company in respect of which subsection 927(6) applies controls a life company and a person acquires a significant interest in any class of shares of the life company or of any entity that also controls the life company, the insurance holding company must to do all things necessary to ensure that, on the day that is one year after the person acquired the significant interest in the class of shares of the life company or entity that controls the life company,

  • (a) the insurance holding company no longer controls the life company; or

  • (b) no person has a significant interest in any class of shares of the life company or the entity that controls the life company, other than the insurance holding company or any entity that the insurance holding company controls.

• Marginal note:Exemption

  (2) Subsection (1) does not apply in respect of a life company with equity of less than two hundred and fifty million dollars, or any other amount that may be prescribed.

• Marginal note:Extension

  (3) If general market conditions so warrant and the Minister is satisfied that the insurance holding company has used its best efforts to be in compliance with subsection (1) on the required day, the Minister may specify a later day as the day from and after which it must comply with that subsection.

Marginal note:Prohibition against significant interest

930 No person who has a significant interest in any class of shares of a widely held insurance holding company in respect of which subsection 927(4) applies may have a significant interest in any class of shares of a subsidiary of the insurance holding company that is a life company or an insurance holding company.

Marginal note:Prohibition against significant interest

931 No person who has a significant interest in any class of shares of an insurance holding company may have a significant interest in any class of shares of

• (a) a widely held converted company in respect of which subsection 407(4) applies that controls the insurance holding company;

• (b) a widely held company to which subsection 407(5) applies that controls the insurance holding company; or

• (c) a widely held insurance holding company in respect of which subsection 407(6) applies that controls the insurance holding company.

Marginal note:No acquisition of control without approval

• 932 (1) No person shall acquire control, within the meaning of paragraph 3(1)(d), of an insurance holding company without the approval of the Minister.

• Marginal note:Amalgamation, etc., constitutes acquisition

  (2) If the entity that would result from an amalgamation, a merger or a reorganization would control, within the meaning of paragraph 3(1)(d), an insurance holding company, the entity is deemed to be acquiring control, within the meaning of that paragraph, of the insurance holding company through an acquisition for which the approval of the Minister is required under subsection (1).

Marginal note:Prohibition against control

933 Despite section 932, no person shall control, within the meaning of paragraph 3(1)(d), an insurance holding company in respect of which subsection 927(4) or (6) applies.

Marginal note:Constraining registration

934 No insurance holding company shall, unless the acquisition of the share has been approved by the Minister, record in its securities register a transfer or issue of any share of the insurance holding company to any person or to any entity controlled by a person if

• (a) the transfer or issue of the share would cause the person to have a significant interest in any class of shares of the insurance holding company; or

• (b) where the person has a significant interest in a class of shares of the insurance holding company, the transfer or issue of the share would increase the significant interest of the person in that class of shares of the insurance holding company.

Marginal note:Exception — small holdings

935 Despite section 934, if, as a result of a transfer or issue of shares of a class of shares of an insurance holding company to a person, other than an eligible agent, the total number of shares of that class registered in the securities register of the insurance holding company in the name of that person would not exceed 5,000 and would not exceed 0.1% of the outstanding shares of that class, the insurance holding company is entitled to assume that no person is acquiring or increasing a significant interest in that class of shares of the insurance holding company as a result of that issue or transfer of shares.

Marginal note:Where approval not required

• 936 (1) Despite subsections 927(1) and (2) and section 934, the approval of the Minister is not required in respect of an insurance holding company, other than an insurance holding company in respect of which subsection 927(4) applies, if a person with a significant interest in a class of shares of the insurance holding company or an entity controlled by a person with a significant interest in a class of shares of the insurance holding company purchases or otherwise acquires shares of that class, or acquires control of any entity that holds any share of that class, and the number of shares of that class purchased or otherwise acquired, or the acquisition of control of the entity, as the case may be, would not increase the significant interest of the person in that class of shares of the insurance holding company to a percentage that is greater than the percentage referred to in subsection (2) or (3), whichever is applicable.

• Marginal note:Percentage

  (2) Subject to subsection (3), for the purposes of subsection (1), the percentage is 5 percentage points in excess of the significant interest of the person in that class of shares of the insurance holding company on the day of the most recent purchase or acquisition by the person or any entity controlled by the person, other than the entity referred to in subsection (1), of shares of that class of shares of the insurance holding company, or of control of an entity that held shares of that class of shares of the insurance holding company, for which approval was given by the Minister.

• Marginal note:When approval not required

  (3) If a person has a significant interest in a class of shares of an insurance holding company and the person’s percentage of that class has decreased after the date of the most recent purchase or other acquisition by the person or any entity controlled by the person, other than the entity referred to in subsection (1), of shares of that class of shares of the insurance holding company, or of control of an entity that held shares of that class of shares of the insurance holding company, for which approval was given by the Minister, the percentage for the purposes of subsection (1) is the percentage that is the lesser of

  • (a) 5 percentage points in excess of the significant interest of the person in that class of shares of the insurance holding company on the day of the most recent purchase or other acquisition by the person or any entity controlled by the person, other than the entity referred to in subsection (1), of shares of that class of shares of the insurance holding company, or of control of an entity that held shares of that class of shares of the insurance holding company, for which approval was given by the Minister, and

  • (b) 10 percentage points in excess of the lowest significant interest of the person in that class of shares of the insurance holding company at any time after the day of the most recent purchase or other acquisition by the person or any entity controlled by the person, other than the entity referred to in subsection (1), of shares of that class of shares of the insurance holding company, or of control of an entity that held shares of that class of shares of the insurance holding company, for which approval was given by the Minister.

• Marginal note:Exception — eligible agent

  (3.1) If the person referred to in subsection (1) is an eligible agent or an entity controlled by an eligible agent, then the Minister may reduce the percentage referred to in subsection (2) or (3).

• Marginal note:Exception

  (4) Subsection (1) does not apply if the purchase or other acquisition of shares or the acquisition of control referred to in that subsection would

  • (a) result in the acquisition of control of the insurance holding company by the person referred to in that subsection;

  • (b) where the person controls the insurance holding company but the voting rights attached to the aggregate of any voting shares of the insurance holding company beneficially owned by the person and by entities controlled by the person do not exceed 50 per cent of the voting rights attached to all of the outstanding voting shares of the insurance holding company, cause the voting rights attached to that aggregate to exceed 50 per cent of the voting rights attached to all of the outstanding voting shares of the insurance holding company;

  • (c) result in the acquisition of a significant interest in a class of shares of the insurance holding company by an entity controlled by the person and the acquisition of that investment is not exempted by the regulations; or

  • (d) result in an increase in a significant interest in a class of shares of the insurance holding company by an entity controlled by the person by a percentage that is greater than the percentage referred to in subsection (2) or (3), whichever is applicable, and the increase is not exempted by the regulations.

• Marginal note:Regulations

  (5) The Governor in Council may make regulations

  • (a) exempting from the application of paragraph (4)(c) the acquisition of a significant interest in a class of shares of the insurance holding company by an entity controlled by the person; and

  • (b) exempting from the application of paragraph (4)(d) an increase in a significant interest in a class of shares of the insurance holding company by an entity controlled by the person by a percentage that is greater than the percentage referred to in subsection (2) or (3), whichever applies.