Her Excellency the Governor General in Council, on the recommendation of the Minister of Finance, pursuant to sections 970a and 977a of the Insurance Companies Actb, hereby makes the annexed Specialized Financing (Insurance Holding Companies) Regulations.S.C. 2001, c. 9, s. 465S.C. 1991, c. 47InterpretationDefinitionsThe following definitions apply in these Regulations.Act means the Insurance Companies Act. (Loi)balance sheet value, in respect of the shares and ownership interests held by an entity, means the value reported on its balance sheet on an unconsolidated basis. (valeur au bilan)book value [Repealed, SOR/2008-168, s. 17]specialized financing entity of the insurance holding company means a specialized financing entity that is controlled by the insurance holding company or in which the insurance holding company has a substantial investment. (entité de la société de portefeuille d’assurances s’occupant de financement spécial)subsidiary, in respect of an insurance holding company, does not include a subsidiary that is a specialized financing entity of the insurance holding company. (filiale)Definition of specialized financing entityIn these Regulations and for the purpose of the definition specialized financing entity in subsection 490(1) of the Act as it applies in respect of an insurance holding company under subsection 966(1) of the Act, specialized financing entity means an entity that acquires or holds shares of, or ownership interests in, entities that a life company may acquire control of, or hold, acquire or increase a substantial investment in, under subsection 493(4) of the Act.SOR/2008-168, s. 17GeneralApplicationThese Regulations apply to the ownership by an insurance holding company of shares of, or ownership interests in, a specialized financing entity under paragraph 971(2)(b) of the Act.Acquisition of Specialized Financing EntitiesDefinition of non-controlling interestIn this section, non-controlling interest means an equity interest, in a specialized financing entity of the insurance holding company controlled by a specialized financing entity, that is held by a person other than the insurance holding company or an entity controlled by the insurance holding company.Ownership restrictionsAn insurance holding company shall not acquire or hold control of, or hold, acquire or increase a substantial investment in, a specialized financing entity ifthe value of the outstanding debt obligations, other than those payable to the insurance holding company or to entities controlled by the insurance holding company, of the specialized financing entity and any specialized financing entity of the insurance holding company controlled by the specialized financing entity, as reported on their respective balance sheets on an unconsolidated basis, exceeds twice the value of the sum of the following, namely,the value of the excess of assets over liabilities of the specialized financing entity as reported on its balance sheet on an unconsolidated basis, andthe value of the non-controlling interests as reported on the balance sheet of the specialized financing entity on a consolidated basis;the specialized financing entity controls or holds shares of, or ownership interests in,an entity referred to in any of paragraphs 971(1)(a) to (j) of the Act,an entity that is primarily engaged in the leasing of motor vehicles in Canada for the purpose of extending credit to a customer or financing a customer’s acquisition of a motor vehicle,an entity that is primarily engaged in providing temporary possession of personal property, including motor vehicles, to customers in Canada for a purpose other than to finance the customer’s acquisition of the property, oran entity that acts as an insurance broker or agent in Canada;the aggregate balance sheet value of the shares and ownership interests, other than shares or ownership interests held by the specialized financing entity in a specialized financing entity of the insurance holding company that it controls, that the insurance holding company, the specialized financing entity, the subsidiaries of the insurance holding company and the other specialized financing entities of the insurance holding company hold, or would hold, in an entity that the specialized financing entity holds control of, or a substantial investment in, is more than $250 million;the sum of the following exceeds 10% of the insurance holding company’s regulatory capital, namely,the aggregate balance sheet value of the shares and ownership interests that the insurance holding company and its subsidiaries, whether individually or jointly, would acquire in the specialized financing entity,the aggregate balance sheet value of the shares and ownership interests held by the insurance holding company and its subsidiaries, whether individually or jointly, in the specialized financing entities of the insurance holding company, andthe aggregate value of outstanding loans made by the insurance holding company and its subsidiaries, whether individually or jointly, to the specialized financing entities of the insurance holding company; orthe sum of the following exceeds or would exceed 25% of the insurance holding company’s regulatory capital, namely,the aggregate balance sheet value of the shares and ownership interests held by the insurance holding company and its subsidiaries, whether individually or jointly, in the specialized financing entity, in the entities controlled by the specialized financing entity and in the entities in which that specialized financing entity holds a substantial investment, andthe aggregate value of outstanding loans that the insurance holding company and its subsidiaries, whether individually or jointly, have made to the specialized financing entity, to the entities controlled by the specialized financing entity and to the entities in which that specialized financing entity holds a substantial investment.13 year limitAn insurance holding company shall not hold control of, or a substantial investment in, a specialized financing entity of the insurance holding company if either the specialized financing entity of the insurance holding company or the specialized financing entity of the insurance holding company and one or more of the following entities, one after another, have held control of, or a substantial investment in, an entity, other than an entity described in subsection (4), for more than 13 consecutive years:the insurance holding company; orany other specialized financing entity of the insurance holding company.ExceptionA specialized financing entity of the insurance holding company controlled by the specialized financing entity of the insurance holding company shall not be considered for the purpose of subsection (3).Prior periods not includedIf a specialized financing entity of the insurance holding company held control of, or a substantial investment in, an entity for a period before becoming the specialized financing entity of the insurance holding company, that period shall not be considered for the purpose of subsection (3).SOR/2008-168, s. 18Control not requiredSubsection 971(4) of the Act does not apply to an insurance holding company’s acquisition or increase of a substantial investment in an entity, in accordance with these Regulations, by way of an investment of a specialized financing entity of the insurance holding company.Approvals not required — generalSubsections 971(5) and (6) of the Act do not apply to an insurance holding company’s acquisition of control of, or acquisition or increase of a substantial investment in, an entity, in accordance with these Regulations, by way of an investment of a specialized financing entity of the insurance holding company.Coming into ForceComing into forceThese Regulations come into force on the day on which they are registered.