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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)

Restrictions Specific to Shares of Mutual Companies (continued)

Marginal note:Filing of allocation method

 A mutual company the directors of which by resolution approve a method of allocating its income and losses and expenses to a participating shareholder account shall, within thirty days after the making of the resolution, file a copy of it with the Superintendent, together with a copy of the written opinion of the actuary of the company and any other information relevant to the allocation method that the Superintendent requests.

  • 1997, c. 15, s. 185

Marginal note:Review of allocation method

 The actuary of a company shall annually report in writing to the directors on the fairness and equitableness of the method used by the company for allocating its income and losses and expenses to a participating shareholder account.

  • 1997, c. 15, s. 185

Marginal note:Payment of dividends

 A mutual company that pays a dividend under section 83 on participating shares shall debit from the participating shareholder account in respect of those shares

  • (a) in the case of a dividend paid by issuing fully paid shares, the amount recorded as stated capital in respect of the dividend as required by subsection 83(3); and

  • (b) in any other case, the amount or value of the dividend.

  • 1997, c. 15, s. 185

Marginal note:Participating share redemptions, etc.

  •  (1) On a purchase, redemption or other acquisition by a company of participating shares issued by it or fractions of participating shares issued by it, other than participating shares held under section 76 or acquired through the realization of security and sold as required by subsection 77(2), there shall be debited from the participating shareholder account for the class or series of shares so purchased, redeemed or otherwise acquired the amount determined by the formula

    A × B/C

    where

    A
    is the balance of the participating shareholder account for the shares of that class or series immediately before the purchase, redemption or other acquisition;
    B
    is the number of shares of that class or series so purchased, redeemed or otherwise acquired; and
    C
    is the number of shares of that class or series outstanding immediately before the purchase, redemption or other acquisition.
  • Marginal note:Shares converted to another class

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

    • (a) there shall be deducted from the participating shareholder account maintained for the class or series of participating shares converted or changed the amount determined by the formula

      A × B/C

      where

      A
      is the balance of the participating shareholder account for the shares of that class or series immediately before the conversion or change,
      B
      is the number of shares of that class or series converted or changed, and
      C
      is the number of shares of that class or series outstanding immediately before the conversion or change; and
    • (b) if the shares of that other class or series are participating shares, the amount determined under the formula in paragraph (a) shall be credited to the participating shareholder account for those participating shares.

  • Marginal note:Participating shareholder account for convertible participating shares

    (3) For the purposes of subsection (2) and subject to the company’s by-laws, where a company issues two classes of participating 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 in a participating shareholder account attributable to a share in either class is the amount determined by the formula

    A/B

    where

    A
    is the total of the balances of the participating shareholder accounts of both classes; and
    B
    is the number of outstanding shares of both classes immediately before the conversion.
  • 1997, c. 15, s. 185

Marginal note:Remaining property on dissolution

 The remaining property of a company that a participating shareholder of the company is entitled to receive on the dissolution of the company shall not exceed the sum of all amounts each of which is the amount in respect of a class or series of participating shares of the company determined by the formula

A × B/C

where

A
is the balance in the participating shareholder account for the shares of that class or series immediately before the dissolution;
B
is the number of shares of that class or series held by the participating shareholder immediately before the dissolution; and
C
is the number of shares of that class or series immediately before the dissolution.
  • 1997, c. 15, s. 185

Subordinated Indebtedness

Marginal note:Restriction on subordinated indebtedness

  •  (1) A company shall not issue subordinated indebtedness unless the subordinated indebtedness is fully paid for in money or, with the approval of the Superintendent, in property.

  • Marginal note:References to subordinated indebtedness

    (2) A person shall not in any prospectus, advertisement, correspondence or literature relating to any subordinated indebtedness issued or to be issued by a company refer to the subordinated indebtedness otherwise than as subordinated indebtedness.

  • Marginal note:Other currencies

    (3) When issuing subordinated indebtedness, a company may provide that any aspect of the subordinated indebtedness relating to money or involving the payment of or the liability to pay money in relation thereto be in a currency other than that of Canada including, without restricting the generality of the foregoing, the payment of any interest thereon.

Security Certificates and Transfers

Marginal note:Definitions

 In this section and sections 86 to 139,

adverse claim

adverse claim includes a claim that a transfer was or would be wrongful or that a particular adverse person is the owner of or has an interest in a security; (opposition)

bona fide purchaser

bona fide purchaser means a purchaser for value in good faith and without notice of any adverse claim who takes delivery of a security in bearer form or order form or of a security in registered form issued to the purchaser or endorsed to the purchaser or endorsed in blank; (acheteur de bonne foi)

clearing agency

clearing agency means a person designated as a recognized clearing agency by the Superintendent; (agence de compensation et de dépôt)

delivery

delivery means voluntary transfer of possession; (livraison ou remise)

fungible

fungible, in respect of securities, means securities of which any unit is, by nature or usage of trade, the equivalent of any other like unit; (fongibles)

genuine

genuine means free of forgery or counterfeit; (authentique)

good faith

good faith means honesty in fact in the conduct of the transaction concerned; (bonne foi)

over-issue

over-issue means the issue of securities in excess of any maximum number of securities that the issuer is authorized to issue; (émission excédentaire)

purchaser

purchaser means a person who takes an interest in a security by sale, mortgage, pledge, issue, reissue, gift or any other voluntary transaction; (acquéreur)

securities broker

securities broker means a person who is engaged for all or part of the person’s time in the business of buying and selling securities and who, in the transaction concerned, acts for, or buys a security from, or sells a security to, a customer; (courtier)

security

security or security certificate means an instrument issued by a company that is

  • (a) in bearer, order or registered form,

  • (b) of a type commonly dealt in on securities exchanges or markets or commonly recognized in any area in which it is issued or dealt in as a medium for investment,

  • (c) one of a class or series or by its terms divisible into a class or series of instruments, and

  • (d) evidence of a share, participation or other interest in or obligation of a company,

but does not include a policy; (valeur mobilière ou certificat de valeur mobilière)

trust indenture

trust indenture has the meaning given that expression by section 317; (acte de fiducie)

unauthorized

unauthorized, in relation to a signature or an endorsement, means a signature or an endorsement made without actual, implied or apparent authority, and includes a forgery; (non autorisé)

uncertificated security

uncertificated security means a security, not evidenced by a security certificate, the issue and any transfer of which is registered and recorded in records maintained for that purpose by or on behalf of a company; (valeur mobilière sans certificat)

valid

valid means issued in accordance with the applicable law or validated under section 101. (valide)

 
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