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

Marginal note:Participating account

456. A company shall maintain accounts, in the form and manner determined by the Superintendent, in respect of participating policies, separately from those maintained in respect of other policies.

Marginal note:Allocation of income

457. There shall be credited to, or debited from, a participating account maintained pursuant to section 456 that portion of the investment income or losses of the company for a financial year, including accrued capital gains or losses, whether or not realized, that is determined in accordance with a method that is

• (a) in the written opinion of the actuary of the company, fair and equitable to the participating policyholders;

• (b) approved by resolution of the directors, after considering the written opinion of the actuary of the company; and

• (c) not disallowed by the Superintendent, on the ground that it is not fair and equitable to the participating policyholders, within sixty days after receiving the resolution.

Marginal note:Allocation of expenses

458. There shall be debited from a participating account maintained pursuant to section 456 that portion of the expenses, including taxes, of the company for a financial year that is determined in accordance with a method that is

• (a) in the written opinion of the actuary of the company, fair and equitable to the participating policyholders;

• (b) approved by resolution of the directors, after considering the written opinion of the actuary of the company; and

• (c) not disallowed by the Superintendent, on the ground that it is not fair and equitable to the participating policyholders, within sixty days after receiving the resolution.

Marginal note:Filing of allocation method

459. A company the directors of which by resolution approve a method of allocating its investment income and losses and expenses to a participating account maintained pursuant to section 456 shall, within thirty days after making the resolution, file a copy of it with the Superintendent, together with a copy of the written opinion of the actuary of the company and any other information relevant to the allocation method that the Superintendent requests.

Marginal note:Review of allocation method

460. The actuary of a company shall annually report in writing to the directors on the fairness and equitableness of the method used by the company for allocating its investment income and losses and expenses to a participating account maintained pursuant to section 456.

Marginal note:Payments to shareholders from participating account

461. A company that has share capital may, from a participating account maintained pursuant to section 456, in a financial year and at any time within six months after the end of that financial year, make a payment to its shareholders, or transfer an amount to an account (other than a participating shareholder account as defined in section 83.01) from which a payment can be made to its shareholders, if

• (a) the aggregate of the amounts so paid or transferred in that financial year does not exceed the percentage of the portion of the profits of the participating account that is determined by the directors as the portion to be distributed for that financial year to the shareholders and participating policyholders, which percentage shall not exceed the number, expressed as a percentage, that is the aggregate of

  • (i) 10 multiplied by the lesser of

    • (A) the sum of the opening balances for that financial year of all participating accounts of the company, and

    • (B) two hundred and fifty million dollars,

  • (ii) 7.5 multiplied by the amount, if any, by which the lesser of

    • (A) the sum of the opening balances for that financial year of all participating accounts of the company, and

    • (B) five hundred million dollars

    exceeds two hundred and fifty million dollars,

  • (iii) 5 multiplied by the amount, if any, by which the lesser of

    • (A) the sum of the opening balances for that financial year of all participating accounts of the company, and

    • (B) one billion dollars

    exceeds five hundred million dollars, and

  • (iv) 2.5 multiplied by the amount, if any, by which the sum of the opening balances for that financial year of all participating accounts of the company exceeds one billion dollars,

  divided by the sum of the opening balances for that financial year of all the participating accounts;

• (b) the company pays dividends or bonuses to its participating policyholders out of the profits of the participating account for that financial year in accordance with its dividend or bonus policy established pursuant to paragraph 165(2)(e); and

• (c) the payment to the shareholders, or the transfer to the account from which a payment can be made to the shareholders, would not, in the opinion of the actuary of the company, materially affect the company’s ability to continue to comply with its dividend or bonus policy or to maintain the levels or rates of dividends or bonuses paid to the company’s participating policyholders.