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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 VCapital Structure (continued)

Share Capital (continued)

Marginal note:Recovery by action

  •  (1) Where any money or property was paid or distributed to a shareholder or other person as a consequence of a reduction of capital made contrary to section 79, a creditor of the company may apply to a court for an order compelling the shareholder or other person to pay the money or deliver the property to the company.

  • Marginal note:Shares held by personal representative

    (2) No person holding shares in the capacity of a personal representative and registered on the records of the company as a shareholder and therein described as the personal representative of a named person is personally liable under subsection (1), but the named person is subject to all the liabilities imposed by that subsection.

  • Marginal note:Limitation

    (3) An action to enforce a liability imposed by subsection (1) may not be commenced more than two years after the date of the act complained of.

  • Marginal note:Remedy preserved

    (4) This section does not affect any liability that arises under section 216.

Marginal note:Adjustment of stated capital account

  •  (1) On a purchase, redemption or other acquisition by a company of shares or fractions thereof issued by it, other than shares acquired pursuant to section 76 or acquired through the realization of security and sold pursuant to subsection 77(2), the company shall deduct from the stated capital account maintained for the class or series of shares so purchased, redeemed or otherwise acquired an amount equal to the result obtained by multiplying the stated capital in respect of the shares of that class or series by the number of shares of that class or series so purchased, redeemed or otherwise acquired and dividing by the number of shares of that class or series outstanding immediately before the purchase, redemption or other acquisition.

  • Marginal note:Idem

    (2) A company shall adjust its stated capital account or accounts in accordance with any special resolution referred to in section 79.

  • Marginal note:Shares converted to another class

    (3) On a conversion of outstanding shares of a company into shares of another class or series, or on a change of outstanding shares of the company into shares of another class or series, the company shall

    • (a) deduct from the stated capital account maintained for the class or series of shares converted or changed an amount equal to the result obtained by multiplying the stated capital of the shares of that class or series by the number of shares of that class or series converted or changed, and dividing by the number of outstanding shares of that class or series immediately before the conversion or change; and

    • (b) record the result obtained under paragraph (a) and any additional consideration received pursuant to the conversion or change in the stated capital account maintained or to be maintained for the class or series of shares into which the shares have been converted or changed.

  • Marginal note:Stated capital of convertible shares

    (4) For the purposes of subsection (3) and subject to the company’s by-laws, where a company issues two classes of shares and there is attached to each class a right to convert a share of one class into a share of the other class and a share is so converted, the amount of stated capital attributable to a share in either class is the aggregate of the stated capital of both classes divided by the number of outstanding shares of both classes immediately before the conversion.

  • Marginal note:Conversion or change of shares

    (5) Shares issued by a company and converted into shares of another class or series, or changed under subsection 238(1) into shares of another class or series, become issued shares of the class or series of shares into which the shares have been converted or changed.

Marginal note:Addition to stated capital account

 On a conversion of any debt obligation of a company into shares of a class or series of shares, the company shall

  • (a) deduct from the liabilities of the company the nominal value of the debt obligation being converted; and

  • (b) record the result obtained under paragraph (a) and any additional consideration received for the conversion in the stated capital account maintained or to be maintained for the class or series of shares into which the debt obligation has been converted.

Marginal note:Declaration of dividend

  •  (1) The directors of a company may declare and a company may pay a dividend by issuing fully paid shares of the company or options or rights to acquire fully paid shares of the company and, subject to subsection (4), the directors of a company may declare and a company may pay a dividend in money or property, and, if a dividend is to be paid in money, the dividend may be paid in a currency other than the currency of Canada.

  • Marginal note:Notice to Superintendent

    (2) The directors of a company shall notify the Superintendent of the declaration of a dividend at least 15 days before the day fixed for its payment.

  • Marginal note:Share dividend

    (3) If shares of a company are issued in payment of a dividend, the company shall record in the stated capital account maintained or to be maintained for the shares of the class or series issued in payment of the dividend the declared amount of the dividend stated as an amount of money.

  • Marginal note:When dividend not to be declared

    (4) The directors of a company shall not declare and a company shall not pay a dividend if there are reasonable grounds for believing that the company is, or the payment 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).

  • (5) [Repealed, 2007, c. 6, s. 199]

  • (6) to (8) [Repealed, 1997, c. 15, s. 184]

  • 1991, c. 47, s. 83
  • 1997, c. 15, s. 184
  • 2001, c. 9, s. 369
  • 2007, c. 6, s. 199

Restrictions Specific to Shares of Mutual Companies

Marginal note:Definitions

 The definitions in this section apply in this section and in sections 83.02 to 83.11.

participating share

participating share means a share issued by a mutual company that confers on the holder of the share the right to receive remaining property of the company on the dissolution of the company. (action participante)

participating shareholder

participating shareholder means the holder of a participating share. (actionnaire participant)

participating shareholder account

participating shareholder account means an account that a mutual company is required by section 83.04 to maintain. (compte des actionnaires participants)

  • 1997, c. 15, s. 185

Marginal note:Voting rights

  •  (1) Except as provided in subsections (2) and (3), a mutual company shall not issue any share that confers on its holder the right to vote at meetings of the shareholders and policyholders of the company.

  • Marginal note:Exception — specified events or conditions

    (2) A share may confer on its holder the right to vote where an event has occurred and is continuing or a condition is fulfilled.

  • Marginal note:Exception — election of directors

    (3) Subject to subsection 173(4.1), participating shares may confer on their holders the right to elect the number of directors indicated in the company’s by-laws.

  • 1997, c. 15, s. 185

Marginal note:Participating shares

 A mutual company shall not issue participating shares unless the by-laws of the company authorize it to issue participating shares.

  • 1997, c. 15, s. 185

Marginal note:Participating shareholder accounts

 A mutual company that issues participating shares shall maintain separate accounts, in the form and manner determined by the Superintendent, in respect of those shares.

  • 1997, c. 15, s. 185

Marginal note:Allocation of income

 There shall be credited to, or debited from, a participating shareholder account that portion of the income or losses of the company for a financial year, including accrued capital gains or losses, whether or not realized, that is determined in accordance with a method that is

  • (a) in the written opinion of the actuary of the company, fair and equitable to the participating policyholders of the company;

  • (b) approved by resolution of the directors, after considering the written opinion of the actuary; and

  • (c) not disallowed by the Superintendent, on the ground that it is not fair and equitable to the participating policyholders, within sixty days after receiving the resolution.

  • 1997, c. 15, s. 185

Marginal note:Allocation of expenses

 There shall be debited from a participating shareholder account that portion of the expenses, including taxes, of the company for a financial year that is determined in accordance with a method that is

  • (a) in the written opinion of the actuary of the company, fair and equitable to the participating policyholders of the company;

  • (b) approved by resolution of the directors, after considering the written opinion of the actuary; and

  • (c) not disallowed by the Superintendent, on the ground that it is not fair and equitable to the participating policyholders, within sixty days after receiving the resolution.

  • 1997, c. 15, s. 185
 
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