1. The following definitions apply in these Regulations.
“institution” means any of the following:
(a) a bank, as defined in section 2 of the Bank Act;
(b) an authorized foreign bank, as defined in section 2 of the Bank Act;
(c) a retail association, as defined in section 2 of the Cooperative Credit Associations Act;
(d) a company, as defined in subsection 2(1) of the Insurance Companies Act;
(e) a society, as defined in subsection 2(1) of the Insurance Companies Act;
(f) a company, as defined in section 2 of the Trust and Loan Companies Act. (institution)
“insurer” includes a government agency that provides mortgage insurance to an institution. (assureur)
- “mortgage insurance”
“mortgage insurance” means an insurance policy or a guarantee against default on a residential mortgage. (assurance hypothécaire)
- “residential mortgage”
“residential mortgage” means a loan made in Canada on the security of residential property that has four or less residential units. (hypothèque résidentielle)
2. These Regulations do not apply in respect of an institution that has obtained mortgage insurance from an insurer if neither the institution nor any of its affiliates charges borrowers an amount for that insurance.
DETERMINATION OF ACTUAL COST
3. (1) For the purposes of sections 418.1 and 552 of the Bank Act, section 382.2 of the Cooperative Credit Associations Act, sections 469.1 and 542.061 of the Insurance Companies Act and section 418.1 of the Trust and Loan Companies Act, the actual cost to an institution shall be determined by deducting from the cost incurred by the institution for mortgage insurance provided to the institution by an insurer all payments or benefits, including rebates or discounts, that are received directly or indirectly by the institution from the insurer, whether in the form of a fee or commission or in any other form.
(2) For the purpose of the determination referred to in subsection (1), the following payments or benefits are not to be considered part of the actual cost:
(a) any payment or benefit that is not related to the provision of mortgage insurance to the institution by the insurer;
(b) any payment or benefit received by the institution for an activity permitted by section 4; and
(c) any payment received by the institution from the insurer in respect of a claim made by the institution under the mortgage insurance as a result of a default on the residential mortgage that is the subject of the insurance.
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