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An Act to amend the law governing financial institutions and to provide for related and consequential matters (S.C. 2007, c. 6)

Assented to 2007-03-29

PART 31991, c. 47AMENDMENTS TO THE INSURANCE COMPANIES ACT

222. Section 453 of the Act is replaced by the following:

Marginal note:Transfers from segregated funds

453. A company may return the current value of an amount transferred under section 452 to the account from which the amount was transferred.

Marginal note:1997, c. 15, s. 251

223. Section 461 of the Act is replaced by the following:

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.

Marginal note:1997, c. 15, s. 252

  • 224. (1) Paragraph 462(a) of the French version of the Act is replaced by the following:

    • a) les sommes virées en vertu des articles 461 et 463;

  • Marginal note:1997, c. 15, s. 252

    (2) Paragraph 462(c) of the Act is replaced by the following:

    • (c) transfers, with the approval of the Superintendent, of amounts that can be reasonably attributed to sources not related to the participating policies in respect of which the account is or has been maintained, if the transfer 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, maintain the levels or rates of dividends or bonuses paid to the company’s participating policyholders or meet the company’s obligations under its participating policies; and

225. Subsection 464(3) of the Act is replaced by the following:

  • Marginal note:When dividend not to be declared

    (3) The directors of a company shall not declare a dividend, bonus or other benefit to participating policyholders if there are reasonable grounds for believing that the company is, or the payment or other satisfaction would cause the company to be, in contravention of subsection 515(1), any regulation made under subsection 515(2) or any order made under subsection 515(3).

226. Subsection 465(1) of the Act is replaced by the following:

Marginal note:Regulations

  • 465. (1) The Governor in Council may make regulations limiting the extent to which a company may cause itself to be reinsured against risks undertaken under its policies.

227. Subsection 469(1) of the Act is replaced by the following:

Marginal note:Restriction on residential mortgages

  • 469. (1) A company shall not make a loan in Canada on the security of residential property in Canada for the purpose of purchasing, renovating or improving that property, or refinance such a loan, if the amount of the loan, together with the amount then outstanding of any mortgage having an equal or prior claim against the property, would exceed 80 per cent of the value of the property at the time of the loan.

Marginal note:1997, c. 15, s. 255; 2001, c. 9, s. 422

228. The heading before section 476 and sections 476 to 478 of the Act are replaced by the following:

Restrictions Specific to Property and Casualty Companies and Marine Companies

Marginal note:General restriction

476. A property and casualty company, or a marine company, shall not, and shall not permit its prescribed subsidiaries to, enter into any debt obligation, within the meaning assigned to that expression by the regulations, or issue any share, other than a common share, if as a result the aggregate of the total debt obligations of the company, determined in the prescribed manner, and the stated capital of the company would exceed the prescribed percentage of the total assets of the company.

Marginal note:Restriction on guarantees

  • 477. (1) A property and casualty company, or a marine company, shall not guarantee on behalf of any person the payment or repayment of any sum of money unless the person on whose behalf the company has undertaken to guarantee the payment or repayment is a subsidiary of the company and has an unqualified obligation to reimburse the company for the full amount of the payment or repayment to be guaranteed.

  • Marginal note:Saving

    (2) Subsection (1) does not prevent a property and casualty company, or a marine company, from insuring a risk falling within a class of insurance that is specified in the order of the Superintendent approving the commencement and carrying on of business by the company.

Marginal note:Restriction on leasing

478. A property and casualty company, or a marine company, shall not engage in Canada in any financial leasing of personal property.

229. Section 484 of the English version of the Act is replaced by the following:

Marginal note:Disclosing borrowing costs — advances

484. If regulations have been made respecting the manner in which the cost of borrowing is to be disclosed in respect of an advance on the security or against the cash surrender value of a policy, a company shall not make such an advance unless the cost of borrowing, as calculated and expressed in accordance with the regulations, has, in the prescribed manner, been disclosed by the company or otherwise as prescribed to the policyholder at or before the time when the advance is made.

Marginal note:2001, c. 9, s. 424(1)

  • 230. (1) Subsection 486(1) of the French version of the Act is replaced by the following:

    Marginal note:Procédure d’examen des réclamations

    • 486. (1) En ce qui concerne les réclamations, la société est tenue, d’une part, d’établir une procédure d’examen des réclamations de personnes qui lui ont demandé ou qui ont obtenu d’elle des produits ou services au Canada et, d’autre part, de désigner un dirigeant ou un employé pour la mise en oeuvre de cette procédure et un ou plusieurs autres pour le traitement des réclamations.

  • (2) Section 486 of the Act is amended by adding the following after subsection (2):

    • Marginal note:How procedures to be made available

      (3) A company shall make its procedures established under paragraph (1)(a) available

      • (a) on its websites through which products or services are offered in Canada; and

      • (b) in written format to be sent to any person who requests them.

    • Marginal note:Information on contacting Agency

      (4) A company shall also make prescribed information on how to contact the Agency available whenever it makes its procedures established under paragraph (1)(a) available under subsection (3).

Marginal note:2001, c. 9, s. 425

231. Subparagraph 489.2(a)(iv) of the Act is replaced by the following:

  • (iv) any other matter that may affect their dealings, or their employees’ or representatives’ dealings, with customers or the public;

232. The Act is amended by adding the following after section 489.2:

Marginal note:Provisions that do not apply

  • 489.3 (1) Paragraphs 165(2)(f) and (g) and sections 479 to 489.2 do not apply in respect of a company if

    • (a) the order approving the commencement and carrying on of business by the company restricts it to the reinsurance of risks within a class of insurance specified in the order;

    • (b) it has provided the Commissioner with a declaration stating that it is not dealing with a prescribed group of consumers or carrying on any prescribed activity; and

    • (c) after providing the declaration, it continues to not deal with that prescribed group.

  • Marginal note:Notice if action taken that causes provisions to apply

    (2) The company must give notice to the Commissioner if it subsequently deals with the prescribed group referred to in the declaration.

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