Her Excellency the Governor General in Council, on the recommendation of the Minister of Finance, pursuant to section 501a of the Insurance Companies Actb, hereby makes the annexed Minority Investment (Insurance Companies) Regulations.S.C. 2001, c. 9, s. 426S.C. 1991, c. 47InterpretationDefinitionsThe following definitions apply in these Regulations.Act means the Insurance Companies Act. (Loi)designated entity meansan entity referred to in any of paragraphs 495(1)(a) to (j) of the Act;an entity whose business includes one or more of the activities referred to in paragraph 495(2)(a) of the Act and that engages, as part of its business, in any financial intermediary activity that exposes the entity to material market or credit risk, including a factoring entity, a finance entity or a financial leasing entity; oran entity whose business includes an activity referred to in paragraph 495(2)(b) or (4)(b) of the Act, including a specialized financing entity, other than an entity in which a company is permitted to acquire or increase a substantial investment under subparagraph 495(6)(c)(iii) of the Act. (entité désignée)regulatory capital has the same meaning as in section 3 of the Regulatory Capital (Insurance Companies) Regulations. (capital réglementaire)value meansin respect of a share, ownership interest or loan held by a company at a particular time, the book value of the share, ownership interest or loan that would be reported on the balance sheet of the company prepared as at that time in accordance with the accounting principles and specifications of the Superintendent referred to in subsection 331(4) of the Act; andin respect of a guarantee, the face value of the guarantee. (valeur)SOR/2011-196, s. 25(F)GeneralPermitted substantial investmentsSubject to section 3,for the purposes of subparagraphs 495(6)(a)(ii), (b)(ii) and (c)(ii) of the Act, a company may acquire or increase a substantial investment in a designated entity; andfor the purpose of paragraph 495(12)(a) of the Act, if a company controls a designated entity, the company may give up control of the designated entity while keeping a substantial investment in it.Restriction concerning investmentsSubject to sections 5 and 6, a company must not acquire or increase a substantial investment in a designated entity under paragraph 2(a) or give up control of a designated entity while keeping a substantial investment in it under paragraph 2(b) if, after the acquisition, increase or giving up of control, the total value of the following would exceed 50% of the company’s regulatory capital:all shares and ownership interests beneficially owned by the company, and all shares and ownership interests beneficially owned by entities controlled by the company, in designated entities in which the company has a substantial investment but over which it does not exercise control,all loans held by the company, and all loans held by entities controlled by the company, that were made to designated entities in which the company has a substantial investment but over which it does not exercise control, andall outstanding guarantees given by the company, and all outstanding guarantees given by entities controlled by the company, on behalf of designated entities in which the company has a substantial investment but over which it does not exercise control.Restriction concerning loansSubject to sections 5 and 6, a company that has a substantial investment in a designated entity over which it does not exercise control must not make a loan to, or give a guarantee on behalf of, the designated entity, or permit entities controlled by it to do so, if, after the making of the loan or the giving of the guarantee, the total value of the shares, ownership interests, loans and guarantees referred to in paragraphs 3(a) to (c) would exceed 50% of the company’s regulatory capital.LimitationIn paragraphs 3(a) to (c) and section 4, any reference to a substantial investment that a company has does not include a substantial investment acquired by the companyunder regulations made under paragraph 501(a) of the Act, other than these Regulations;under subsection 493(3.1) of the Act, as that subsection read before the coming into force of section 426 of the Financial Consumer Agency of Canada Act, S.C. 2001, c. 9; orby way of an investment of a specialized financing entity controlled by the company.Calculation of total value in section 3 or 4For the purpose of calculating the total value referred to in section 3 or 4 in respect of a company, no amount may be included in respect of shares or ownership interests acquired under sections 498 to 500 of the Act or acquired by a bank controlled by the company under subsection 193(12) or (13) of the Bank Act, chapter B-1 of the Revised Statutes of Canada, 1985.RepealRepeal[Repeal]Coming into ForceComing into forceThese Regulations come into force on the day on which section 501 of the Insurance Companies Act, as enacted by section 426 of the Financial Consumer Agency of Canada Act, chapter 9 of the Statutes of Canada, 2001, comes into force.[Note: Regulations in force October 24, 2001, see SI/2001-102.]