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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 XVIIInsurance Holding Companies (continued)

DIVISION 6Corporate Governance (continued)

SUBDIVISION 2Proxies and Restrictions on Voting (continued)

Restrictions on Voting

Meaning of eligible votes

  •  (1) In this section, eligible votes means the total number of votes that may be cast by or on behalf of shareholders on a vote of shareholders or a vote of holders of a class or series of shares, as the case may be, in respect of any particular matter, calculated without regard to subsection (2).

  • Marginal note:Restriction

    (2) At a meeting of shareholders of an insurance holding company in respect of which subsection 927(4) applies, no person and no entity controlled by any person may, in respect of any vote of shareholders or holders of any class or series of shares of the company, cast votes in respect of any shares beneficially owned by the person or the entity that are, in aggregate, more than 20 per cent of the eligible votes that may be cast in respect of that vote.

  • Marginal note:Proxyholders

    (3) No person who is a proxyholder for a person or for an entity controlled by a person may cast votes to which the proxy relates that the person or entity may not cast by reason of subsection (2).

  • Marginal note:Exception

    (4) Subsections (2) and (3) do not apply in respect of a vote held under section 852.

  • Marginal note:Validity of vote

    (5) A vote in respect of a particular matter is not invalid merely because a person voted contrary to subsection (2) or (3).

  • Marginal note:Disposition of shareholdings

    (6) If, with respect to any insurance holding company, a person contravenes subsection (2) or (3), the Minister may, by order, direct the shareholder of the shares to which the contravention relates or any person controlled by that shareholder to dispose of any number of shares of the insurance holding company beneficially owned by any of those persons that the Minister specifies in the order, within the time specified in the order and in the proportion, if any, as between the shareholder and the persons controlled by that shareholder that is specified in the order.

  • Marginal note:Restriction on voting rights

    (7) If the Minister makes an order under subsection (6), the person to whom the order relates may not, in person or by proxy, exercise any voting rights that are attached to shares of the company beneficially owned by the person.

  • Marginal note:Subsection (7) ceases to apply

    (8) Subsection (7) shall cease to apply in respect of a person when the shares to which the order relates have been disposed of.

  • Marginal note:Reliance on number in notice

    (9) For the purpose of this section, a person is entitled to rely on the number of eligible votes set out in a notice of a meeting under subsection 767(2).

  • Marginal note:Designation of persons

    (10) For the purpose of this section, the Minister may, with respect to a particular insurance holding company, designate two or more persons who are parties to an agreement, commitment or understanding referred to in section 9 to be a single person.

  • 2001, c. 9, s. 465

SUBDIVISION 3Directors and Officers

Duties

Marginal note:Duty to manage

  •  (1) Subject to this Act, the directors of an insurance holding company shall manage or supervise the management of the business and affairs of the insurance holding company.

  • Marginal note:Specific duties

    (2) Without limiting the generality of subsection (1), the directors of an insurance holding company shall

    • (a) establish an audit committee to perform the duties referred to in subsections 829(3) and (4);

    • (b) establish procedures to resolve conflicts of interest, including techniques for the identification of potential conflict situations and for restricting the use of confidential information;

    • (c) designate a committee of the board of directors to monitor the procedures referred to in paragraph (b); and

    • (d) establish investment and lending policies, standards and procedures in accordance with section 968.

  • Marginal note:Exception

    (3) Paragraph (2)(a) does not apply to the directors of an insurance holding company if

    • (a) all the voting shares of the insurance holding company are beneficially owned by a Canadian financial institution described by any of paragraphs (a) to (d) of the definition financial institution in subsection 2(1); and

    • (b) the audit committee of the Canadian financial institution referred to in paragraph (a) performs for and on behalf of the insurance holding company all the functions that would otherwise be required to be performed by the audit committee of the insurance holding company under this Part.

  • 2001, c. 9, s. 465

Marginal note:Duty of care

  •  (1) Every director and officer of an insurance holding company in exercising any of the powers of a director or an officer and discharging any of the duties of a director or an officer shall

    • (a) act honestly and in good faith with a view to the best interests of the insurance holding company; and

    • (b) exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances.

  • Marginal note:Duty to comply

    (2) Every director, officer and employee of an insurance holding company shall comply with this Act, the regulations, the insurance holding company’s incorporating instrument and the by-laws of the insurance holding company.

  • Marginal note:No exculpation

    (3) No provision in any contract, in any resolution or in the by-laws of an insurance holding company relieves any director, officer or employee of the insurance holding company from the duty to act in accordance with this Act and the regulations or relieves a director, officer or employee from liability for a breach thereof.

  • 2001, c. 9, s. 465
Qualification and Number — Directors

Marginal note:Minimum number of directors

  •  (1) An insurance holding company shall have at least seven directors.

  • Marginal note:Residency requirement

    (2) At least one half of the directors of an insurance holding company that is a subsidiary of a foreign institution and a majority of the directors of any other insurance holding company must be, at the time of each director’s election or appointment, resident Canadians.

  • 2001, c. 9, s. 465
  • 2007, c. 6, s. 319

Marginal note:Disqualified persons

 The following persons are disqualified from being directors of an insurance holding company:

  • (a) a person who is less than eighteen years of age;

  • (b) a person who is of unsound mind and has been so found by a court in Canada or elsewhere;

  • (c) a person who has the status of a bankrupt;

  • (d) a person who is not a natural person;

  • (e) a person who is prohibited by subsection 793(7) or section 945 or 955 from exercising voting rights attached to shares of the insurance holding company;

  • (f) a person who is an officer, director or full-time employee of an entity that is prohibited by subsection 793(7) or section 945 or 955 from exercising voting rights attached to shares of the insurance holding company;

  • (f.1) a person who is an officer, director, employee or agent of — or any other person acting on behalf of — an eligible agent within the meaning of section 406.1;

  • (g) [Repealed, 2013, c. 40, s. 165]

  • (h) a minister of Her Majesty in right of Canada or in right of a province; and

  • (i) a person who is an agent or employee of the government of a foreign country or any political subdivision thereof.

  • 2001, c. 9, s. 465
  • 2012, c. 19, s. 344, c. 31, s. 141
  • 2013, c. 40, s. 165

Marginal note:No requirement to hold shares

 A director of an insurance holding company is not required to hold shares of the insurance holding company.

  • 2001, c. 9, s. 465

Marginal note:Limit on directors

 No more than 15 per cent of the directors of an insurance holding company may, at each director’s election or appointment, be employees of the insurance holding company or a subsidiary of the insurance holding company, except that up to four persons who are employees of the insurance holding company or a subsidiary of the insurance holding company may be directors of the insurance holding company if those directors constitute not more than one half of the directors of the insurance holding company.

  • 2001, c. 9, s. 465
 
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