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Insurance Companies Act (S.C. 1991, c. 47)

Act current to 2022-05-02 and last amended on 2021-06-30. Previous Versions

PART VICorporate Governance (continued)

DIVISION I.1Proxies (continued)

Marginal note:Mandatory solicitation

  •  (1) Subject to subsection 144(2) and subsection (2), the management of a company shall, at the same time as they send notice of a meeting of shareholders and policyholders, send a form of proxy in prescribed form to each shareholder entitled to receive notice of the meeting and to each policyholder entitled to receive notice of the meeting under section 143.

  • Marginal note:Exception

    (2) The management of a company is not required to send a form of proxy to shareholders under subsection (1) if the company

    • (a) is not a distributing company; and

    • (b) has 50 or fewer shareholders who are entitled to vote at a meeting, two or more joint holders of a share being counted as one shareholder.

  • Marginal note:Optional solicitation

    (3) The management of a company may send forms of proxy referred to in subsection (1) to policyholders who are entitled to vote at the meeting but not entitled to receive notice of the meeting under section 143, if the management

    • (a) sends forms of proxy referred to in that subsection to all policyholders who are entitled to vote at the meeting but not entitled to receive notice of the meeting under that section; and

    • (b) at the same time sends to each of the policyholders referred to in paragraph (a) a notice of the meeting as if those policyholders were persons entitled under that subsection to notice of the meeting.

  • Marginal note:Deeming rule for other provisions

    (4) For the purposes of this Act other than this section, if notices of a meeting are sent to policyholders under paragraph (3)(b), those policyholders are deemed to have been entitled under paragraph 143(1)(b) to receive notice of the meeting.

  • 1997, c. 15, s. 197
  • 2005, c. 54, s. 240

Marginal note:Soliciting proxies

  •  (1) A person shall not solicit proxies unless

    • (a) in the case of solicitation by or on behalf of the management of a company, a management proxy circular in prescribed form, either as an appendix to or as a separate document accompanying the notice of the meeting, is sent to the auditor of the company and to each shareholder or policyholder whose proxy is solicited; and

    • (b) in the case of any other solicitation, a dissident’s proxy circular in prescribed form stating the purposes of the solicitation is sent to the auditor of the company, to each shareholder or policyholder whose proxy is solicited and to the company.

  • Marginal note:Copy to Superintendent

    (2) A person who sends a management proxy circular or dissident’s proxy circular shall at the same time file with the Superintendent

    • (a) in the case of a management proxy circular, a copy of it together with a copy of the notice of meeting, form of proxy and any other documents for use in connection with the meeting; and

    • (b) in the case of a dissident’s proxy circular, a copy of it together with a copy of the form of proxy and any other documents for use in connection with the meeting.

  • Marginal note:Exemption by Superintendent

    (3) On the application of an interested person, the Superintendent may, on any terms that the Superintendent thinks fit, exempt the person from any of the requirements of subsection (1) and section 164.03, and the exemption may be given retroactive effect.

  • Marginal note:Reporting exemptions

    (4) The Superintendent shall set out in a periodical available to the public the particulars of each exemption granted under subsection (3) together with the reasons for the exemption.

  • 1997, c. 15, s. 197

Marginal note:Attendance at meeting

  •  (1) A person who solicits a proxy and is appointed proxyholder shall attend in person or cause an alternate proxyholder to attend every meeting in respect of which the proxy is valid, and the proxyholder or alternate proxyholder shall comply with the directions of the shareholder or policyholder who executed the form of proxy.

  • Marginal note:Rights of proxyholder

    (2) A proxyholder or an alternate proxyholder has the same rights as the appointing shareholder or policyholder to speak at a meeting of shareholders or policyholders in respect of any matter, to vote by way of ballot at the meeting and, except where a proxyholder or an alternate proxyholder has conflicting instructions from more than one shareholder or policyholder, to vote at the meeting in respect of any matter by way of a show of hands.

  • Marginal note:Vote by show of hands

    (3) Despite subsections (1) and (2) and unless a shareholder, policyholder or proxyholder demands a ballot, if the chairperson of a meeting of shareholders or policyholders declares to the meeting that, if a ballot were conducted, the total number of votes represented at the meeting by proxy required to be voted against what, to the knowledge of the chairperson, would be the decision of the meeting on a matter or group of matters is less than 5% of all the votes that might be cast by shareholders or policyholders, in person or by proxy,

    • (a) the chairperson may conduct the vote in respect of that matter or group of matters by way of a show of hands; and

    • (b) a proxyholder or alternate proxyholder may vote in respect of that matter or group of matters by way of a show of hands.

  • 1997, c. 15, s. 197
  • 2005, c. 54, s. 242

Marginal note:Duty of intermediary

  •  (1) Shares of a company that are registered in the name of an intermediary or an intermediary’s nominee and not beneficially owned by the intermediary may not be voted unless the intermediary sends to the beneficial owner

    • (a) a copy of the notice of the meeting, annual statement, management proxy circular and dissident’s proxy circular and any other documents, other than the form of proxy, that were sent to shareholders by or on behalf of any person for use in connection with the meeting; and

    • (b) a written request for voting instructions except if the intermediary has already received written voting instructions from the beneficial owner.

  • Marginal note:When documents to be sent

    (2) The intermediary shall send the documents referred to in subsection (1) without delay after they receive the documents referred to in paragraph (1)(a).

  • Marginal note:Restriction on voting

    (3) An intermediary or a proxyholder appointed by them may not vote shares that the intermediary does not beneficially own and that are registered in the name of the intermediary or their nominee unless the intermediary or proxyholder, as the case may be, receives written voting instructions from the beneficial owner.

  • Marginal note:Copies

    (4) A person by or on behalf of whom a solicitation is made shall on request and without delay provide the intermediary, at the person’s expense, with the necessary number of copies of the documents referred to in paragraph (1)(a).

  • Marginal note:Instructions to intermediary

    (5) The intermediary shall vote or appoint a proxyholder to vote in accordance with any written voting instructions received from the beneficial owner.

  • Marginal note:Beneficial owner as proxyholder

    (6) If a beneficial owner so requests and provides an intermediary with appropriate documentation, the intermediary shall appoint the beneficial owner or a nominee of the beneficial owner as proxyholder.

  • Marginal note:Effect of intermediary’s failure to comply

    (7) The failure of an intermediary to comply with any of subsections (1) to (6) does not render void any meeting of shareholders or policyholders or any action taken at the meeting.

  • Marginal note:Intermediary may not vote

    (8) Nothing in this Division gives an intermediary the right to vote shares that they are otherwise prohibited from voting.

  • 1997, c. 15, s. 197
  • 2005, c. 54, s. 243

Marginal note:Exemption

 The Governor in Council may make regulations respecting the conditions under which a company is exempt from any of the requirements of sections 164.01 to 164.06.

  • 2005, c. 54, s. 243

Marginal note:Restraining order

  •  (1) If a form of proxy, management proxy circular or dissident’s proxy circular contains an untrue statement of a material fact or omits to state a material fact that is required to be contained in it or that is necessary to make a statement contained in it not misleading in light of the circumstances in which the statement is made, an interested person or the Superintendent may apply to a court and the court may make any order it thinks fit including

    • (a) an order restraining the solicitation or the holding of the meeting, or restraining any person from implementing or acting on a resolution passed at the meeting, to which the form of proxy, management proxy circular or dissident’s proxy circular relates;

    • (b) an order requiring correction of any form of proxy or proxy circular and a further solicitation; and

    • (c) an order adjourning the meeting.

  • Marginal note:Notice of application

    (2) Where a person other than the Superintendent is an applicant under subsection (1), the applicant shall give to the Superintendent notice of the application and the Superintendent is entitled to appear and to be heard in person or by counsel.

  • 1997, c. 15, s. 197

DIVISION I.2Restrictions 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 and policyholders on a vote of shareholders or shareholders and policyholders 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 and policyholders of a company in respect of which subsection 407(4) applies or of a company to which subsection 407(5) applies, no person and no entity controlled by any person may, in respect of any vote of shareholders or shareholders and policyholders 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 votes cast by or on behalf of

    • (a) a company to which subsection 407(5) applies, or an insurance holding company to which subsection 407(6) applies, that controls the company; or

    • (b) any entity that is controlled by a company or an insurance holding company referred to in paragraph (a).

  • Marginal note:Exception

    (5) Subsections (2) and (3) do not apply in respect of a vote held under section 239.

  • Marginal note:Validity of vote

    (6) 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

    (7) If, with respect to any 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 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

    (8) If the Minister makes an order under subsection (7), 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 (8) ceases to apply

    (9) Subsection (8) ceases 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

    (10) 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 143(1.01).

  • Marginal note:Designation of persons

    (11) For the purpose of this section, the Minister may, with respect to a particular 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. 374

DIVISION IIDirectors and Officers

Duties

Marginal note:Duty to manage

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

  • Marginal note:Specific duties

    (2) Without limiting the generality of subsection (1), the directors of a company shall

    • (a) establish an audit committee to perform the duties referred to in subsections 203(3) and (4);

    • (b) establish a conduct review committee to perform the duties referred to in subsection 204(3);

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

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

    • (e) in the case of a company that issues participating policies, establish, before issuing any participating policies or, in the case of a former-Act company, within six months after the coming into force of this Part, a policy for determining the dividends and bonuses to be paid to the participating policyholders;

    • (e.1) establish a policy respecting the management of each of the participating accounts maintained under section 456,

      • (i) if the company has participating policyholders on the day on which this paragraph comes into force, within six months after that day, and

      • (ii) in any other case, before issuing a participating policy;

    • (e.2) establish criteria for changes made by the company to the premium or charge for insurance, amount of insurance or surrender value in respect of its adjustable policies,

      • (i) if the company has adjustable policyholders on the day on which this paragraph comes into force, within six months after that day, and

      • (ii) in any other case, before issuing an adjustable policy;

    • (f) establish procedures to provide disclosure of information to customers of the company that is required to be disclosed by this Act and for dealing with complaints as required by section 486;

    • (g) designate a committee of the board of directors to monitor the procedures referred to in paragraph (f) and satisfy itself that they are being adhered to by the company;

    • (h) establish investment and lending policies, standards and procedures in accordance with section 492; and

    • (i) in the case of a former-Act company, appoint the actuary of the company forthwith after the coming into force of this Part.

  • Marginal note:Exception

    (3) Paragraphs (2)(a) and (b) do not apply to the directors of a company where

    • (a) all the voting shares of the company, other than directors’ qualifying shares, if any, 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);

    • (b) there are no policyholders who are entitled to vote; and

    • (c) the audit committee or the conduct review committee of the Canadian financial institution referred to in paragraph (a) performs for and on behalf of the company all the functions that would otherwise be required to be performed by the audit committee or conduct review committee of the company under this Act.

  • Marginal note:Report of actuary — par. (2)(e)

    (3.1) The company’s actuary shall report to the directors in writing on the fairness to participating policyholders of any policy to be established or amended under paragraph (2)(e) and report at least once during each financial year on its continuing fairness. In the case of a policy established before the day on which this subsection comes into force, the actuary shall within six months after that day report on its fairness to participating policyholders and report at least once during each financial year on its continuing fairness.

  • Marginal note:Report of actuary — par. (2)(e.1)

    (3.2) The company’s actuary shall report to the directors in writing on the fairness to participating policyholders of any policy to be established or amended under paragraph (2)(e.1) and report at least once during each financial year on its continuing fairness.

  • Marginal note:Report of actuary — par. (2)(e.2)

    (3.3) The company’s actuary shall report to the directors in writing on the fairness to adjustable policyholders of the criteria to be established or amended under paragraph (2)(e.2) and report at least once during each financial year on their continuing fairness.

  • Marginal note:Consideration of reports

    (3.4) The directors shall consider the report prepared under subsection (3.1), (3.2) or (3.3) before establishing or amending a policy under paragraph (2)(e) or (e.1) or the criteria under paragraph (2)(e.2), as the case may be.

  • Marginal note:Generally accepted actuarial practice

    (3.5) The report of the actuary referred to in subsections (3.1) to (3.3) shall be prepared in accordance with generally accepted actuarial practice with such changes as may be determined by the Superintendent and any additional directions that may be made by the Superintendent.

  • Marginal note:Copy to Superintendent

    (4) The company shall, within 30 days after a policy is established or amended under paragraph (2)(e) or (e.1) or criteria are established or amended under paragraph (2)(e.2), send a copy to the Superintendent.

  • Marginal note:Access to policies

    (4.1) The company shall on request and free of charge send a copy of a policy established or amended under paragraph (2)(e) or (e.1) to a shareholder or participating policyholder and on payment of a reasonable fee to any other person.

  • Marginal note:Access to criteria

    (4.2) The company shall on request and free of charge send a copy of the criteria referred to in paragraph (2)(e.2) to an adjustable policyholder and on payment of a reasonable fee to any other person.

  • Marginal note:Regulations

    (5) The Governor in Council may make regulations respecting the content of the policies established under paragraphs (2)(e) and (e.1) and of the criteria established under paragraph (2)(e.2).

  • 1991, c. 47, s. 165
  • 1997, c. 15, s. 199
  • 2001, c. 9, s. 375(F)
  • 2005, c. 54, s. 244
 
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