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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 13Auditors (continued)

Marginal note:Auditor’s report and extended examination

  •  (1) The Superintendent may, in writing, require that the auditor of an insurance holding company report to the Superintendent on the extent of the auditor’s procedures in the examination of the annual statement and may, in writing, require that the auditor enlarge or extend the scope of that examination or direct that any other particular procedure be performed in any particular case, and the auditor shall comply with any such requirement of the Superintendent and report to the Superintendent thereon.

  • Marginal note:Special examination

    (2) The Superintendent may, in writing, require that the auditor of an insurance holding company make a particular examination to determine whether any procedures adopted by the insurance holding company may be prejudicial to the interests of depositors, policyholders or creditors of any federal financial institution that is affiliated with the insurance holding company, or any other examination as, in the Superintendent’s opinion, the public interest may require, and report to the Superintendent thereon.

  • Marginal note:Special examination

    (3) The Superintendent may direct that a special audit of an insurance holding company be made if, in the opinion of the Superintendent, it is so required and may appoint for that purpose a firm of accountants qualified under subsection 894(1) to be an auditor of the insurance holding company.

  • Marginal note:Expenses payable by insurance holding company

    (4) The expenses entailed by any examination or audit referred to in any of subsections (1) to (3) are payable by the insurance holding company on being approved in writing by the Superintendent.

  • 2001, c. 9, s. 465

Marginal note:Auditor’s report

  •  (1) The auditor shall, not less than twenty-one days before the date of the annual meeting of the shareholders of the insurance holding company, make a report in writing to them on the annual statement.

  • Marginal note:Audit for shareholders

    (2) In each report required under subsection (1), the auditor shall state whether, in the auditor’s opinion, the annual statement presents fairly, in accordance with the accounting principles referred to in subsection 887(4), the financial position of the insurance holding company as at the end of the financial year to which it relates and the results of the operations and changes in the financial position of the insurance holding company for that financial year.

  • Marginal note:Auditor’s remarks

    (3) In each report referred to in subsection (2), the auditor shall include such remarks as the auditor considers necessary when

    • (a) the examination has not been made in accordance with the auditing standards referred to in subsection 902(2);

    • (b) the annual statement has not been prepared on a basis consistent with that of the preceding financial year; or

    • (c) the annual statement does not present fairly, in accordance with the accounting principles referred to in subsection 887(4), the financial position of the insurance holding company as at the end of the financial year to which it relates or the results of the operations or changes in the financial position of the insurance holding company for that financial year.

  • 2001, c. 9, s. 465

Marginal note:Report on directors’ statement

  •  (1) The auditor of an insurance holding company shall, if required by the shareholders, audit and report to them on any financial statement submitted to them by the directors, and the report shall state whether, in the auditor’s opinion, the financial statement presents fairly the information required by the shareholders.

  • Marginal note:Sending report

    (2) A report of the auditor made under subsection (1) shall be attached to the financial statement to which it relates and a copy of the statement and report shall be sent by the directors to every shareholder and to the Superintendent.

  • 2001, c. 9, s. 465

Marginal note:Auditor of subsidiaries

  •  (1) An insurance holding company shall take all necessary steps to ensure that

    • (a) its auditor is the auditor of each of its subsidiaries; and

    • (b) in the case of a subsidiary with more than one auditor, the auditor of the insurance holding company is one of the subsidiary’s auditors.

  • Marginal note:Subsidiary outside Canada

    (2) Subsection (1) applies in the case of a subsidiary that carries on its operations in a country other than Canada unless the laws of that country do not permit the appointment of the auditor of the insurance holding company as the auditor of that subsidiary.

  • Marginal note:Exception

    (3) Subsection (1) does not apply in respect of any particular subsidiary where the insurance holding company, after having consulted its auditor, is of the opinion that the total assets of the subsidiary are not a material part of the total assets of the insurance holding company.

  • 2001, c. 9, s. 465
  • 2005, c. 54, s. 356

Marginal note:Auditor’s attendance

  •  (1) The auditor of an insurance holding company is entitled to receive notice of every meeting of the audit committee of the insurance holding company and, at the expense of the insurance holding company, to attend and be heard at that meeting.

  • Marginal note:Attendance

    (2) If so requested by a member of the audit committee, the auditor shall attend every meeting of the audit committee held during the member’s term of office.

  • 2001, c. 9, s. 465

Marginal note:Calling meeting

  •  (1) The auditor of an insurance holding company or a member of the audit committee may call a meeting of the audit committee.

  • Marginal note:Right to interview

    (2) The chief internal auditor of an insurance holding company or any officer or employee of the insurance holding company acting in a similar capacity shall, at the request of the auditor of the insurance holding company and on receipt of reasonable notice, meet with the auditor.

  • 2001, c. 9, s. 465

Marginal note:Notice of errors

  •  (1) A director or an officer of an insurance holding company shall forthwith notify the audit committee and the auditor of the insurance holding company of any error or misstatement of which the director or officer becomes aware in an annual statement or other financial statement on which the auditor or any former auditor has reported.

  • Marginal note:Error noted by auditor

    (2) If the auditor or a former auditor of an insurance holding company is notified or becomes aware of an error or misstatement in an annual statement or other financial statement on which the auditor reported and in the auditor’s opinion the error or misstatement is material, the auditor or former auditor shall inform each director of the insurance holding company accordingly.

  • Marginal note:Duty of directors

    (3) Where under subsection (2) the auditor or a former auditor of an insurance holding company informs the directors of an error or misstatement in an annual statement or other financial statement, the directors shall

    • (a) prepare and issue a revised annual statement or financial statement; or

    • (b) otherwise inform the shareholders and the Superintendent of the error or misstatement.

  • 2001, c. 9, s. 465
Qualified Privilege

Marginal note:Qualified privilege for statements

 Any oral or written statement or report made under this Part by the auditor or a former auditor of an insurance holding company has qualified privilege.

  • 2001, c. 9, s. 465

SUBDIVISION 14Remedial Actions

Marginal note:Derivative action

  •  (1) Subject to subsection (2), a complainant or the Superintendent may apply to a court for leave to bring an action under this Part in the name and on behalf of an insurance holding company or any of its subsidiaries, or to intervene in an action under this Part to which the insurance holding company or a subsidiary of the insurance holding company is a party, for the purpose of prosecuting, defending or discontinuing the action on behalf of the insurance holding company or the subsidiary.

  • Marginal note:Conditions precedent

    (2) No action may be brought and no intervention in an action may be made under subsection (1) by a complainant unless the court is satisfied that

    • (a) the complainant has, not less than 14 days before bringing the application or as otherwise ordered by the court, given notice to the directors of the insurance holding company or the insurance holding company’s subsidiary of the complainant’s intention to apply to the court under subsection (1) if the directors of the insurance holding company or the insurance holding company’s subsidiary do not bring, diligently prosecute or defend or discontinue the action;

    • (b) the complainant is acting in good faith; and

    • (c) it appears to be in the interests of the insurance holding company or the subsidiary that the action be brought, prosecuted, defended or discontinued.

  • Marginal note:Notice to Superintendent

    (3) A complainant under subsection (1) shall give the Superintendent notice of the application and the Superintendent may appear and be heard in person or by counsel at the hearing of the application.

  • 2001, c. 9, s. 465
  • 2005, c. 54, s. 357
 
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