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

Marginal note:When approval not required

• 937 (1) Despite subsections 927(1) and (2) and section 934, the approval of the Minister is not required if

  • (a) the Superintendent has, by order, directed the insurance holding company to increase its capital and shares of the insurance holding company are issued and acquired in accordance with the terms and conditions, if any, that may be specified in the order; or

  • (b) a person, other than an eligible agent, who controls, within the meaning of paragraph 3(1)(a), the insurance holding company acquires additional shares of the insurance holding company.

• Marginal note:Exception

  (2) Paragraph (1)(a) does not apply in respect of an insurance holding company in respect of which subsection 927(4) or (6) applies.

• Marginal note:Pre-approval

  (3) For the purposes of subsections 927(1) and (2) and section 934, the Minister may approve

  • (a) the purchase or other acquisition of such number or percentage of shares of an insurance holding company as may be required in a particular transaction or series of transactions; or

  • (b) the purchase or other acquisition of up to a specified number or percentage of shares of an insurance holding company within a specified period.

Marginal note:Public holding requirement

• 938 (1) Every insurance holding company shall, from and after the day determined under this section in respect of that insurance holding company, have, and continue to have, voting shares that carry at least 35 per cent of the voting rights attached to all of the outstanding voting shares of the insurance holding company and that are

  • (a) shares of one or more classes of shares that are listed and posted for trading on a recognized stock exchange in Canada; and

  • (b) shares none of which is beneficially owned by a person who is a major shareholder of the insurance holding company in respect of the voting shares of the insurance holding company or by any entity that is controlled by a person who is a major shareholder of the insurance holding company in respect of such shares.

• Marginal note:Determination of day

  (2) If the insurance holding company has equity of four billion dollars or more on the day it comes into existence, the day referred to in subsection (1) is the day that is three years after that day and, in the case of any other insurance holding company, the day referred to in subsection (1) is the day that is three years after the day of the first annual meeting of the shareholders of the insurance holding company held after the equity of the insurance holding company first reaches four billion dollars.

• Marginal note:Extension

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

Marginal note:Limit on assets

• 939 (1) Unless an exemption order with respect to the insurance holding company is granted under section 941, if an insurance holding company fails to comply with section 938 in any month, the Minister may, by order, require the insurance holding company not to have, until it complies with that section, average total assets in any three month period ending on the last day of a subsequent month exceeding the insurance holding company’s average total assets in the three month period ending on the last day of the month immediately preceding the month specified in the order.

• Marginal note:Average total assets

  (2) For the purposes of subsection (1), the average total assets of an insurance holding company in a three month period shall be computed by adding the total assets of the insurance holding company as calculated for the month end of each of the three months in the period and by dividing the sum by three.

Marginal note:Increase of capital

940 Where the Superintendent has, by order, directed an insurance holding company to increase its capital and shares of the insurance holding company are issued and acquired in accordance with such terms and conditions as may be specified in the order, section 938 shall not apply in respect of the insurance holding company until such time as the Superintendent may, by order, specify.

Marginal note:Exemption by Minister

• 941 (1) On application by an insurance holding company and subject to any terms and conditions that the Minister considers appropriate, the Minister may by order exempt the insurance holding company from the requirements of section 938 if the Minister considers it appropriate to do so.

• Marginal note:Compliance with s. 938

  (2) The insurance holding company shall comply with section 938 as of the day on which the exemption order expires.

• Marginal note:Limit on assets

  (3) If an insurance holding company fails to comply with section 938 on the day referred to in subsection (2), it shall not, until it complies with that section, have average total assets in any three month period ending on the last day of a subsequent month exceeding its average total assets in the three month period ending on the last day of the month immediately preceding the day referred to in subsection (2) or on any later day that the Minister may specify by order.

• Marginal note:Application of s. 939(2)

  (4) Subsection 939(2) applies for the purposes of subsection (3).

Marginal note:Exception

• 942 (1) If an insurance holding company fails to comply with section 938 as the result of any of the following, section 939 does not apply in respect of that insurance holding company until the expiration of six months after the day the insurance holding company failed to comply with section 938:

  • (a) a distribution to the public of voting shares of the insurance holding company;

  • (b) a redemption or purchase of voting shares of the insurance holding company;

  • (c) the exercise of any option to acquire voting shares of the insurance holding company; or

  • (d) the conversion of any convertible securities into voting shares of the insurance holding company.

• Marginal note:Shares acquiring voting rights

  (2) If as the result of an event that has occurred and is continuing, shares of an insurance holding company acquire voting rights in such number as to cause the insurance holding company to no longer be in compliance with section 938, section 939 does not apply in respect of that insurance holding company until the expiration of six months after the day the insurance holding company ceased to be in compliance with section 938 or such later day as the Minister may, by order, specify.

• (3) and (4) [Repealed, 2005, c. 54, s. 360]

Marginal note:Acquisition of control permitted

• 943 (1) Subject to subsection (2) and sections 934 and 944, section 938 does not apply in respect of an insurance holding company if a person acquires control of an insurance holding company with equity of four billion dollars or more through the purchase or other acquisition of all or any number of the shares of the insurance holding company by the person or by any entity controlled by the person.

• Marginal note:Undertaking required

  (2) Subsection (1) applies only if the person provides the Minister with an undertaking satisfactory to the Minister to do all things necessary so that, within three years after the acquisition, or any other period that the Minister may specify, the insurance holding company has voting shares that carry at least 35 per cent of the voting rights attached to all of the outstanding voting shares of the insurance holding company and that are

  • (a) shares of one or more classes of shares that are listed and posted for trading on a recognized stock exchange in Canada; and

  • (b) shares none of which is beneficially owned by a person who is a major shareholder of the insurance holding company in respect of the voting shares of the insurance holding company or by any entity that is controlled by a person who is a major shareholder of the insurance holding company in respect of such shares.

Marginal note:Application of section 938

944 At the expiration of the period for compliance with an undertaking referred to in subsection 943(2), section 938 applies in respect of the insurance holding company.

Marginal note:Restriction on voting rights

• 945 (1) If, with respect to any insurance holding company, a particular person contravenes subsection 927(1), (4) or (6) or section 930, 931, 932 or 933 or fails to comply with an undertaking referred to in subsection 943(2) or with any term or condition imposed under section 948, no person, and no entity controlled by the particular person, shall, in person or by proxy, exercise any voting rights

  • (a) that are attached to shares of the insurance holding company beneficially owned by the particular person or any entity controlled by the particular person; or

  • (b) that are subject to an agreement entered into by the particular person, or any entity controlled by the particular person, pertaining to the exercise of the voting rights.

• Marginal note:Subsection (1) ceases to apply

  (2) Subsection (1) ceases to apply in respect of a person when, as the case may be,

  • (a) the shares to which the contravention relates have been disposed of;

  • (b) the person ceases to control the insurance holding company within the meaning of paragraph 3(1)(d);

  • (c) if the person failed to comply with an undertaking referred to in subsection 943(2), the insurance holding company complies with section 938; or

  • (d) if the person failed to comply with a term or condition imposed under section 948, the person complies with the term or condition.

• Marginal note:Saving

  (3) Despite subsection (1), if a person contravenes subsection 927(4) by reason only that, as a result of an event that has occurred and is continuing and is not within the control of the person, shares of the insurance holding company beneficially owned by the person or by any entity controlled by the person acquire voting rights in such number so as to cause the person to be a major shareholder of the insurance holding company, the Minister may, after a consideration of the circumstances, permit the person and any entity controlled by the person to exercise voting rights, in person or by proxy, in respect of any class of voting shares of the insurance holding company beneficially owned by them that do not in aggregate exceed 20 per cent of the voting rights attached to that class of voting shares.

Marginal note:Application for approval

• 946 (1) An application for an approval of the Minister required under this Division must be filed with the Superintendent and contain the information, material and evidence that the Superintendent may require.

• Marginal note:Applicant

  (2) If, with respect to any particular transaction, this Division applies to more than one person, any one of those persons may make the application to the Minister for approval on behalf of all of those persons.

Marginal note:Matters for consideration

• 947 (1) Subject to subsection (2), if an application for an approval under section 927 is made, the Minister, in determining whether or not to approve the transaction, shall take into account all matters that the Minister considers relevant to the application, including

  • (a) the nature and sufficiency of the financial resources of the applicant or applicants as a source of continuing financial support for any company that is a subsidiary of the insurance holding company;

  • (b) the soundness and feasibility of the plans of the applicant or applicants for the future conduct and development of the business of any company that is a subsidiary of the insurance holding company;

  • (c) the business record and experience of the applicant or applicants;

  • (d) the character and integrity of the applicant or applicants or, if the applicant or any of the applicants is a body corporate, its reputation for being operated in a manner that is consistent with the standards of good character and integrity;

  • (e) whether the insurance holding company will be operated responsibly by persons with the competence and experience suitable for involvement in the operation of a financial institution;

  • (f) the impact of any integration of the businesses and operations of the applicant or applicants with those of the insurance holding company and its affiliates on the conduct of those businesses and operations; and

  • (g) the best interests of the financial system in Canada.

• Marginal note:Exception

  (2) Except for an application by an eligible agent for an approval under section 927, and subject to section 933, the Minister shall take into account only paragraph (1)(d) if the application is in respect of a transaction that would result in the applicant or applicants holding

  • (a) more than 10 per cent but no more than 20 per cent of any class of the outstanding voting shares of an insurance holding company in respect of which subsection 927(4) applies; or

  • (b) more than 10 per cent but no more than 30 per cent of any class of the outstanding non-voting shares of such an insurance holding company.

• Marginal note:National treatment

  (3) Where a transaction in respect of which subsection 927(1) or (2) applies would cause an insurance holding company to become a subsidiary of a foreign institution that is engaged in the insurance business, that does not have any other insurance holding company as its subsidiary and that is a non-WTO Member foreign institution, the Minister shall not approve the transaction unless the Minister is satisfied that treatment as favourable for insurance holding companies to which this Act applies exists or will be provided in the jurisdiction in which the foreign institution principally carries on business, either directly or through a subsidiary.

• Marginal note:Part XII of the Bank Act

  (4) Nothing in subsection (1) or (3) affects the operation of Part XII of the Bank Act.