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

Act current to 2021-02-15 and last amended on 2019-06-17. Previous Versions

PART XVRegulation of Companies, Societies, Foreign Companies and Provincial Companies — Superintendent (continued)

Remedial Powers (continued)

Disqualification and Removal (continued)

Marginal note:Application

  •  (1) This section applies only in respect of a foreign company

    • (a) that has been notified by the Superintendent that this section applies to it where the foreign company is subject to measures designed to protect the interests of its policyholders and creditors in respect of its insurance business in Canada, which measures

      • (i) have been specified by the Superintendent by way of conditions or limitations in respect of the order made under subsection 574(1) in respect of the foreign company, or

      • (ii) are contained in a prudential agreement entered into under section 675.1 or an undertaking given by the foreign company to the Superintendent; or

    • (b) that is the subject of a direction made under section 676 or an order made under subsection 608(4) or 609(2).

  • Marginal note:Information to be provided

    (2) A foreign company shall provide the Superintendent with the name of any person who has been selected by the foreign company for appointment as chief agent together with such other information about the background, business record and experience of the person as the Superintendent may require.

  • Marginal note:When information to be provided

    (3) The information required by subsection (2) shall be provided to the Superintendent at least 30 days prior to the date of the appointment or within any shorter period that the Superintendent may allow.

  • Marginal note:Disqualification

    (4) If the Superintendent is of the opinion that, on the basis of the competence, business record, experience, conduct or character of a person, he or she is not suitable to hold the position of chief agent, the Superintendent may, by order, disqualify the person from being appointed to that office.

  • Marginal note:Risk of prejudice

    (5) In forming an opinion under subsection (4), the Superintendent must consider whether the interests of the policyholders and creditors of the foreign company in respect of its insurance business in Canada would likely be prejudiced if the person were to take office.

  • Marginal note:Representations may be made

    (6) The Superintendent must in writing notify the person concerned and the foreign company of an order that the Superintendent proposes to make under subsection (4) and must afford them an opportunity within 15 days after the date of the notice, or within any longer period that the Superintendent allows, to make representations to the Superintendent in relation to the matter.

  • Marginal note:Prohibition

    (7) If an order is made under subsection (4) disqualifying a person from being appointed as chief agent, the person shall not be, and the foreign company shall not permit the person to be, appointed to that position.

  • 2001, c. 9, s. 461
  • 2007, c. 6, s. 302

Marginal note:Removal

  •  (1) The Superintendent may, by order, remove a person from office as the chief agent of a foreign company if the Superintendent is of the opinion that the person is not suitable to hold that office

    • (a) on the basis of the competence, business record, experience, conduct or character of the person; or

    • (b) because the person has contravened or, by action or negligence, has contributed to the contravention of

      • (i) this Act or the regulations made under it,

      • (ii) a direction made under section 676,

      • (iii) an order made under subsection 608(4) or 609(2),

      • (iv) a condition or limitation in respect of the order made under subsection 574(1) in respect of the foreign company, or

      • (v) a prudential agreement entered into under section 675.1 or an undertaking given by the foreign company to the Superintendent.

  • Marginal note:Risk of prejudice

    (2) In forming an opinion under subsection (1), the Superintendent must consider whether the interests of the policyholders and creditors of the foreign company in respect of its insurance business in Canada have been or are likely to be prejudiced by the person’s holding office as chief agent.

  • Marginal note:Representations may be made

    (3) The Superintendent must in writing notify the chief agent and the foreign company of any removal order that the Superintendent proposes to make under subsection (1) and must afford them an opportunity within 15 days after the date of the notice, or within any longer period that the Superintendent allows, to make representations to the Superintendent in relation to the matter.

  • Marginal note:Suspension

    (4) If the Superintendent is of the opinion that the public interest is likely to be prejudiced by the chief agent continuing to exercise the powers or carry out the duties and functions of that office during the period for making representations, the Superintendent may make an order suspending the chief agent. The suspension may not extend beyond 10 days after the expiration of that period.

  • Marginal note:Notice of order

    (5) The Superintendent shall, without delay, notify the chief agent and the foreign company of a removal order or suspension order.

  • Marginal note:Consequences of removal order

    (6) The chief agent ceases to hold that office as of the date the removal order is made or any later date specified in the order.

  • Marginal note:Appeal

    (7) The chief agent or the foreign company may, within 30 days after the date of receipt of notice of the removal order under subsection (5), or within any longer period that the Court allows, appeal the matter to the Federal Court.

  • Marginal note:Powers of Federal Court

    (8) The Federal Court, in the case of an appeal, may dismiss the appeal or set aside the removal order.

  • Marginal note:Order not stayed by appeal

    (9) A removal order is not stayed by an appeal.

  • 2001, c. 9, s. 461
  • 2007, c. 6, s. 303

Supervisory Intervention

Marginal note:Direction to transfer policies or to reinsure risks — society

  •  (1) If the circumstances described in any of paragraphs 679(1.1)(a) to (e) or (g) exist in respect of a society, the Superintendent may, by order, subject to any terms and conditions the Superintendent may specify, direct it to transfer all or any portion of its policies to, or cause itself to be reinsured, against all or any portion of the risks undertaken under its policies, by any company, society, foreign company or body corporate incorporated or formed by or under the laws of a province that is authorized to transact the classes of insurance to be so transferred or reinsured.

  • Marginal note:Compliance

    (2) The society shall comply with the order within the time that the Superintendent specifies in the order or within any further period specified by the Superintendent.

  • Marginal note:Opportunity for representations

    (3) No order shall be issued to a society under subsection (1) unless the society is provided with a reasonable opportunity to make representations in respect of the matter.

  • 2001, c. 9, s. 462
  • 2007, c. 6, s. 304

Marginal note:Direction to transfer policies or to reinsure risks — foreign fraternal benefit society

  •  (1) If the circumstances described in any of paragraphs 679(1.2)(a) to (d) or (f) exist in respect of a foreign fraternal benefit society, the Superintendent may, by order, subject to any terms and conditions the Superintendent may specify, direct it to transfer all or any portion of its policies in respect of its insurance business in Canada to, or cause itself to be reinsured, against all or any portion of the risks undertaken under those policies, by any company, society, foreign company or body corporate incorporated or formed by or under the laws of a province that is authorized to transact the classes of insurance to be so transferred or reinsured.

  • Marginal note:Compliance

    (2) The foreign company shall comply with the order within the time that the Superintendent specifies in the order or within any further period specified by the Superintendent.

  • Marginal note:Opportunity for representations

    (3) No order shall be issued to a foreign company under subsection (1) unless the foreign company is provided with a reasonable opportunity to make representations in respect of the matter.

  • 2001, c. 9, s. 462
  • 2007, c. 6, s. 305

Marginal note:Superintendent may take control

  •  (1) Subject to this Act, where any of the circumstances described in subsection (1.1) exist in respect of a company, society or provincial company or any of the circumstances described in subsection (1.2) exist in respect of a foreign company, the Superintendent may

    • (a) take control, for a period not exceeding sixteen days, of the assets of the company, society or provincial company and the assets under its administration or, in the case of a foreign company, of its assets in Canada together with its other assets held in Canada under control of its chief agent, including all amounts received or receivable in respect of its insurance business in Canada; or

    • (b) unless the Minister advises the Superintendent that the Minister is of the opinion that it is not in the public interest to do so,

      • (i) take control, for a period exceeding sixteen days, of the assets of the company, society or provincial company and the assets under its administration or, in the case of a foreign company, of its assets in Canada together with its other assets held in Canada under the control of its chief agent, including all amounts received or receivable in respect of its insurance business in Canada,

      • (ii) where control of assets has been taken under paragraph (a), continue the control beyond the sixteen days referred to in that paragraph, or

      • (iii) take control of the company, society or provincial company.

  • Marginal note:Circumstances re other than foreign company

    (1.1) Control by the Superintendent under subsection (1) may be taken in respect of a company, society or provincial company, other than a foreign company, where

    • (a) the company, society or provincial company has failed to pay its liabilities or, in the opinion of the Superintendent, will not be able to pay its liabilities as they become due and payable;

    • (b) [Repealed, 2001, c. 9, s. 463]

    • (c) the assets of the company, society or provincial company are not, in the opinion of the Superintendent, sufficient to give adequate protection to its policyholders and creditors;

    • (d) any asset appearing on the books or records of the company, society or provincial company or held under its administration is not, in the opinion of the Superintendent, satisfactorily accounted for;

    • (e) the regulatory capital of the company, society or provincial company has, in the opinion of the Superintendent, reached a level or is eroding in a manner that may detrimentally affect its policyholders or creditors;

    • (f) the company, society or provincial company has failed to comply with an order of the Superintendent made under subsection 515(3) to increase its capital or with an order of the Superintendent made under subsection 678.5(1); or

    • (g) in the opinion of the Superintendent, any other state of affairs exists in respect of the company, society or provincial company that may be materially prejudicial to the interests of the company’s, society’s or provincial company’s policyholders or creditors or the owners of any assets under the company’s, society’s or provincial company’s administration, including where proceedings under a law relating to bankruptcy or insolvency have been commenced in Canada or elsewhere in respect of the holding body corporate of the company or provincial company.

  • Marginal note:Circumstances re foreign company

    (1.2) Control by the Superintendent under subsection (1) may be taken in respect of a foreign company where

    • (a) in respect of its insurance business in Canada, it has failed to pay its liabilities or, in the opinion of the Superintendent, will not be able to pay its liabilities as they become due and payable;

    • (b) [Repealed, 2001, c. 9, s. 463]

    • (c) its assets in Canada are not, in the opinion of the Superintendent, sufficient to give adequate protection to its policyholders and creditors in respect of its insurance business in Canada;

    • (d) any asset relating to its insurance business in Canada appearing on the books or records of the foreign company is not, in the opinion of the Superintendent, satisfactorily accounted for;

    • (e) it has failed to comply with an order of the Superintendent made under subsection 608(4) to increase the margin of its assets in Canada over its liabilities in Canada or with an order of the Superintendent made under subsection 609(2) or 678.6(1); or

    • (f) in the opinion of the Superintendent, any other state of affairs exists in respect of the foreign company that may be materially prejudicial to the interests of the foreign company’s policyholders or creditors in respect of its insurance business in Canada, or to the interests of the owners of any assets under the foreign company’s administration in Canada, including where proceedings under a law relating to bankruptcy or insolvency have been commenced in Canada or elsewhere in respect of the foreign company or its holding body corporate.

  • Marginal note:Notice of proposed action

    (1.3) The Superintendent must notify a company, society, provincial company or foreign company of any action proposed to be taken in respect of it under paragraph (1)(b) and of its right to make written representations to the Superintendent within the time specified in the notice, not exceeding ten days after it receives the notice.

  • Marginal note:Objectives of Superintendent

    (2) If the Superintendent has, under subsection (1), control of the assets of a company, society, provincial company or foreign company referred to in that subsection, the Superintendent may do all things necessary or expedient to protect the rights and interests of the policyholders and creditors of the company, society or provincial company or the policyholders and creditors in respect of the foreign company’s insurance business in Canada.

  • Marginal note:Powers of Superintendent

    (3) Where the Superintendent has, pursuant to subsection (1), control of the assets of a company, society, provincial company or foreign company referred to in that subsection,

    • (a) the company, society, provincial company or foreign company shall not make, acquire or transfer any loan or make any purchase, sale or exchange of securities or any disbursement or transfer of cash of any kind without the prior approval of the Superintendent or a representative designated by the Superintendent; and

    • (b) no director, officer or employee of the company, society, provincial company or foreign company nor the chief agent of the foreign company shall have access to any cash or securities held by the company, society, provincial company or foreign company unless

      • (i) a representative of the Superintendent accompanies the director, officer or employee or the chief agent, or

      • (ii) the access is previously authorized by the Superintendent or the Superintendent’s representative.

  • 1991, c. 47, s. 679
  • 1996, c. 6, s. 96
  • 1997, c. 15, s. 326
  • 2001, c. 9, s. 463
  • 2007, c. 6, s. 306
 
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