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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 9Investments (continued)

Exceptions and Exclusions (continued)

Marginal note:Regulations restricting ownership

 The Governor in Council may make regulations

  • (a) for the purposes of subsection 971(4), permitting the acquisition of control or the acquisition or increase of substantial investments, or prescribing the circumstances under which that subsection does not apply or the insurance holding companies or other entities in respect of which that subsection does not apply, including prescribing insurance holding companies or other entities on the basis of the activities they engage in;

  • (b) for the purposes of subsection 971(5) or (6), permitting the acquisition of control or the acquisition or increase of substantial investments, or prescribing the circumstances under which either of those subsections does not apply or the insurance holding companies or other entities in respect of which either of those subsections does not apply, including prescribing insurance holding companies or other entities on the basis of the activities they engage in;

  • (c) for the purposes of subsection 971(10), permitting an insurance holding company to give up control of an entity; and

  • (d) restricting the ownership by an insurance holding company of shares of a body corporate or of ownership interests in an unincorporated entity under sections 971 to 976 and imposing terms and conditions applicable to insurance holding companies that own such shares or interests.

  • 2001, c. 9, s. 465

Portfolio Limits

Marginal note:Exclusion from portfolio limits

  •  (1) Subject to subsection (3), the value of all loans, investments and interests acquired by an insurance holding company and any of its prescribed subsidiaries under section 975 or as a result of a realization of a security interest is not to be included in calculating the value of loans, investments and interests of the insurance holding company and its prescribed subsidiaries under sections 979 to 981

    • (a) for a period of twelve years following the day on which the interest was acquired, in the case of an interest in real property; and

    • (b) for a period of five years after the day on which the loan, investment or interest was acquired, in the case of a loan, investment or interest, other than an interest in real property.

  • Marginal note:Extension

    (2) The Superintendent may, in the case of any particular insurance holding company, extend any period referred to in subsection (1) for any further period or periods, and on any terms and conditions, that the Superintendent considers necessary.

  • Marginal note:Exception

    (3) Subsection (1) does not apply to an investment or interest described in that subsection if the investment or interest is defined by a regulation made under section 984 to be an interest in real property and

    • (a) the insurance holding company or the subsidiary acquired the investment or interest as a result of the realization of a security interest securing a loan that was defined by a regulation made under section 984 to be an interest in real property; or

    • (b) the insurance holding company or the subsidiary acquired the investment or interest under section 975 as a result of a default referred to in that section in respect of a loan that was defined by a regulation made under section 984 to be an interest in real property.

  • 2001, c. 9, s. 465

Commercial Lending

Marginal note:Insurance holding companies with regulatory capital of $25 million or less

 Subject to section 980, an insurance holding company that has twenty-five million dollars or less of regulatory capital shall not acquire control of a permitted entity that holds commercial loans and shall not permit its prescribed subsidiaries to make or acquire a commercial loan or acquire control of a permitted entity that holds commercial loans if the aggregate value of all commercial loans held by the prescribed subsidiaries of the insurance holding company exceeds, or the making or acquisition of the commercial loan or acquisition of control of the entity would cause the aggregate value of all commercial loans held by the prescribed subsidiaries of the insurance holding company to exceed, 5 per cent of the total assets of the insurance holding company.

  • 2001, c. 9, s. 465

Marginal note:Insurance holding companies with regulatory capital over $25 million

 An insurance holding company that has twenty-five million dollars or less of regulatory capital that is controlled by a financial institution that has the equivalent of more than twenty-five million dollars of regulatory capital or an insurance holding company that has more than twenty-five million dollars of regulatory capital may acquire control of a permitted entity that holds commercial loans or permit its prescribed subsidiaries to make or acquire commercial loans or acquire control of a permitted entity that holds commercial loans if the aggregate value of all commercial loans held by the prescribed subsidiaries of the insurance holding company would thereby exceed the limit set out in section 979 only with the prior approval in writing of the Superintendent and in accordance with any terms and conditions that the Superintendent may specify.

  • 2001, c. 9, s. 465

Real Property

Marginal note:Limit on total property interest

 An insurance holding company shall not, and shall not permit its prescribed subsidiaries to, purchase or otherwise acquire an interest in real property or make an improvement to any real property in which the insurance holding company or any of its prescribed subsidiaries has an interest if the aggregate value of all interests of the insurance holding company in real property exceeds, or the acquisition of the interest or the making of the improvement would cause that aggregate value to exceed, an amount determined in accordance with the regulations.

  • 2001, c. 9, s. 465

Equities

Marginal note:Limits on equity acquisitions

 An insurance holding company shall not, and shall not permit its prescribed subsidiaries to,

  • (a) purchase or otherwise acquire any participating shares of any body corporate or any ownership interests in any unincorporated entity, other than those of a permitted entity in which the insurance holding company has, or by virtue of the acquisition would have, a substantial investment, or

  • (b) acquire control of an entity that holds shares or ownership interests referred to in paragraph (a),

if the aggregate value of

  • (c) all participating shares, excluding participating shares of permitted entities in which the insurance holding company has a substantial investment, and

  • (d) all ownership interests in unincorporated entities, other than ownership interests in permitted entities in which the insurance holding company has a substantial investment,

beneficially owned by the insurance holding company and its prescribed subsidiaries exceeds, or the purchase or acquisition would cause that aggregate value to exceed, an amount determined in accordance with the regulations.

  • 2001, c. 9, s. 465

Aggregate Limit

Marginal note:Aggregate limit

 An insurance holding company shall not, and shall not permit its prescribed subsidiaries to,

  • (a) purchase or otherwise acquire

    • (i) participating shares of a body corporate, other than those of a permitted entity in which the insurance holding company has, or by virtue of the acquisition would have, a substantial investment,

    • (ii) ownership interests in an unincorporated entity, other than ownership interests in a permitted entity in which the insurance holding company has, or by virtue of the acquisition would have, a substantial investment, or

    • (iii) interests in real property, or

  • (b) make an improvement to real property in which the insurance holding company or any of its prescribed subsidiaries has an interest

if the aggregate value of

  • (c) all participating shares and ownership interests referred to in subparagraphs (a)(i) and (ii) that are beneficially owned by the insurance holding company and its prescribed subsidiaries, and

  • (d) all interests of the insurance holding company in real property referred to in subparagraph (a)(iii)

exceeds, or the acquisition or the making of the improvement would cause that aggregate value to exceed, an amount determined in accordance with the regulations.

  • 2001, c. 9, s. 465

Miscellaneous

Marginal note:Regulations

 For the purposes of this Division, the Governor in Council may make regulations

  • (a) defining the interests of an insurance holding company in real property;

  • (b) determining the method of valuing those interests;

  • (c) exempting classes of insurance holding companies from the application of sections 978 to 983; or

  • (d) respecting the determination of an amount for the purpose of each of sections 981, 982 and 983.

  • 2001, c. 9, s. 465

Marginal note:Divestment order

  •  (1) The Superintendent may, by order, direct an insurance holding company to dispose of, within any period that the Superintendent considers reasonable, any loan, investment or interest made or acquired in contravention of this Division.

  • Marginal note:Divestment order

    (2) If, in the opinion of the Superintendent,

    • (a) an investment by an insurance holding company or any entity it controls in shares of a body corporate or in ownership interests in an unincorporated entity enables the insurance holding company to control the body corporate or the unincorporated entity, or

    • (b) the insurance holding company or any entity it controls has entered into an arrangement whereby it or its nominee may veto any proposal put before

      • (i) the board of directors of a body corporate, or

      • (ii) a similar group or committee of an unincorporated entity,

      or whereby no proposal may be approved except with the consent of the insurance holding company, the entity it controls or the nominee,

    the Superintendent may, by order, require the insurance holding company, within any period that the Superintendent considers reasonable, to do all things necessary to ensure that the insurance holding company no longer controls the body corporate or unincorporated entity or has the ability to veto or otherwise defeat any proposal referred to in paragraph (b).

  • Marginal note:Divestment order

    (3) If

    • (a) an insurance holding company

      • (i) fails to provide or obtain within a reasonable time the undertakings referred to in subsection 973(1), (2) or (4), or

      • (ii) is in default of an undertaking referred to in subsection 973(1) or (2) and the default is not remedied within ninety days after the day of receipt by the insurance holding company of a notice from the Superintendent of the default, or

    • (b) a permitted entity referred to in subsection 973(4) is in default of an undertaking referred to in subsection 973(4) and the default is not remedied within ninety days after the day of receipt by the insurance holding company of a notice from the Superintendent of the default,

    the Superintendent may, by order, require the insurance holding company, within any period that the Superintendent considers reasonable, to do all things necessary to ensure that the insurance holding company no longer has a substantial investment in the entity to which the undertaking relates.

  • Marginal note:Exception

    (4) Subsection (2) does not apply in respect of an entity in which an insurance holding company has a substantial investment permitted by this Division.

  • 2001, c. 9, s. 465
 
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