Income Tax Act

Version of section 211 from 2012-12-14 to 2017-10-13:

Marginal note:Definitions
  •  (1) For the purposes of this Part,

    existing guaranteed life insurance policy

    police d’assurance-vie garantie existante

    existing guaranteed life insurance policy, at any time, means a non-participating life insurance policy in Canada in respect of which

    • (a) the amount of every premium that became payable before that time and after December 31, 1989,

    • (b) the number of premium payments under the policy, and

    • (c) the amount of each benefit under the policy at that time

    were fixed and determined on or before December 31, 1989; (police d’assurance-vie garantie existante)

    life insurance policy

    police d’assurance-vie

    life insurance policy includes a benefit under

    • (a) a group life insurance policy, and

    • (b) a group annuity contract

    but does not include

    • (c) that part of a policy in respect of which the policyholder is deemed by paragraph 138.1(1)(e) to have an interest in a related segregated fund trust, or

    • (d) a reinsurance arrangement; (police d’assurance-vie)

    life insurance policy in Canada

    police d’assurance-vie au Canada

    life insurance policy in Canada means a life insurance policy issued or effected by an insurer on the life of a person resident in Canada at the time the policy was issued or effected; (police d’assurance-vie au Canada)

    net interest rate

    taux d’intérêt net

    net interest rate, in respect of a liability, benefit, risk or guarantee under a life insurance policy of an insurer for a taxation year, is the positive amount, if any, determined by the formula

    (A - B) × C

    where

    A
    is the simple arithmetic average determined as of the first day of the year of the average yield (expressed as a percentage per year rounded to 2 decimal points) in each of the 60 immediately preceding months prevailing on all domestic Canadian-dollar Government of Canada bonds outstanding on the last Wednesday of that month that have a remaining term to maturity of more than 10 years,
    B
    is
    • (a) in the case of a guaranteed benefit provided under the terms and conditions of the policy as they existed on March 2, 1988, other than a policy where, at any time after March 2, 1988, its terms and conditions relating to premiums and benefits were changed (otherwise than to give effect to the terms and conditions that were determined before March 3, 1988), the greater of

      • (i) the rate of interest (expressed as a percentage per year) used by the insurer in determining the amount of the guaranteed benefit, and

      • (ii) 4%, and

    • (b) in any other case, nil, and

    C
    is
    • (a) in the case of a guaranteed benefit to which paragraph (a) of the description of B applies, 65%, and

    • (b) in any other case, 55%; (taux d’intérêt net)

    non-participating life insurance policy

    police d’assurance-vie sans participation

    non-participating life insurance policy means a life insurance policy that is not a participating life insurance policy; (police d’assurance-vie sans participation)

    participating life insurance policy

    police d’assurance-vie avec participation

    participating life insurance policy has the meaning assigned by subsection 138(12); (police d’assurance-vie avec participation)

    policy loan

    avance sur police

    policy loan has the meaning assigned by subsection 138(12); (avance sur police)

    registered life insurance policy

    police d’assurance-vie agréée

    registered life insurance policy means a life insurance policy issued or effected as or under a pooled registered pension plan, a registered retirement savings plan, a deferred profit sharing plan or a registered pension plan; (police d’assurance-vie agréée)

    reinsurance arrangement

    mécanisme de réassurance

    reinsurance arrangement does not include an arrangement under which an insurer has assumed the obligations of the issuer of a life insurance policy to the policyholder; (mécanisme de réassurance)

    segregated fund

    fonds réservé

    segregated fund has the meaning given that expression in subsection 138.1(1); (fonds réservé)

    specified transaction or event

    opération ou événement déterminé

    specified transaction or event, in respect of a life insurance policy, means

    • (a) a change in underwriting class,

    • (b) a change in premium because of a change in frequency of premium payments within a year that does not alter the present value, at the beginning of the year, of the total premiums to be paid under the policy in the year,

    • (c) an addition under the terms of the policy as they existed on

      • (i) in the case of an existing guaranteed life insurance policy, December 31, 1989,

      • (ii) in any other case, March 2, 1988,

      of accidental death, dismemberment, disability or guaranteed purchase option benefits,

    • (d) the deletion of a rider,

    • (e) redating lapsed policies within the reinstatement period referred to in paragraph (g) of the definition disposition in subsection 148(9) or redating for policy loan indebtedness,

    • (f) a change in premium because of a correction of erroneous information,

    • (g) the payment of a premium after its due date, or no more than 30 days before its due date, as established on or before

      • (i) in the case of an existing guaranteed life insurance policy, December 31, 1989, and

      • (ii) in any other case, March 2, 1988, and

    • (h) the payment of an amount described in paragraph (a) of the definition premium in subsection 148(9); (opération ou événement déterminé)

    taxable life insurance policy

    police d’assurance-vie imposable

    taxable life insurance policy of an insurer at any time means a life insurance policy in Canada issued by the insurer (or in respect of which the insurer has assumed the obligations of the issuer of the policy to the policyholder), other than a policy that is at that time

    • (a) an existing guaranteed life insurance policy,

    • (b) an annuity contract (including a settlement annuity),

    • (c) a registered life insurance policy,

    • (d) a registered pension plan, or

    • (e) a retirement compensation arrangement. (police d’assurance-vie imposable)

  • Marginal note:Riders and changes in terms

    (2) For the purposes of this Part,

    • (a) any rider added at any time after March 2, 1988 to a life insurance policy shall be deemed to be a separate life insurance policy issued and effected at that time; and

    • (b) a change in the terms or conditions of a life insurance policy resulting from a specified transaction or event shall be deemed not to have occurred and not to be a change.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts. R.S., 1985, c. 1 (5th Supp.), s. 211;
  • 1994, c. 7, Sch. II, s. 171;
  • 1997, c. 25, s. 60;
  • 2008, c. 28, s. 32;
  • 2009, c. 2, s. 72;
  • 2012, c. 31, s. 47.
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