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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 VICorporate Governance (continued)

DIVISION IIIFundamental Changes (continued)

Conversion into Company with Common Shares (continued)

Marginal note:Effect of letters patent of conversion

  •  (1) Letters patent of conversion become effective on the day stated in the letters patent of conversion, and on that day

    • (a) the company ceases to be a mutual company; and

    • (b) the policyholders of the company cease to have any rights with respect to or any interest in the company as a mutual company.

  • Marginal note:Consideration for shares

    (2) For the purposes of subsection 69(1) and section 70, shares issued by a company under a conversion proposal are deemed to be fully paid for in money and the amount of consideration received by the company for those shares is deemed to be equal to the book value of the company immediately after the effective date of its conversion, determined in accordance with the accounting principles referred to in subsection 331(4) and calculated without taking into account any amounts remaining at that time in the participating accounts that the company maintains under section 456.

  • 1997, c. 15, s. 216
  • 1999, c. 1, s. 6

Marginal note:Distribution prohibited

  •  (1) A mutual company shall not take any action or series of actions directed toward the distribution of all or part of its property to its policyholders or shareholders or the provision of any other benefit to its policyholders or shareholders, other than as provided in subsections 237(1) to (1.2), until a conversion proposal has been approved by the Minister under subsection 237(1).

  • Marginal note:Exception

    (2) Nothing in subsection (1) prevents

    • (a) the directors of the company from declaring a dividend on shares or a policy dividend, bonus or other benefit payable to policyholders in the ordinary course of business; or

    • (b) the company from paying or otherwise satisfying a dividend, bonus or other benefit referred to in paragraph (a).

  • Marginal note:Non-application

    (3) This section does not apply to a company that is insolvent within the meaning of the Winding-up and Restructuring Act.

  • 2011, c. 15, s. 31

Amendments — By-laws

Marginal note:By-laws

  •  (1) The directors of a company may make, amend or repeal any by-laws, in the manner set out in subsections (2) and (3) and sections 239 to 244, to

    • (a) change the maximum number, if any, of shares of any class that the company is authorized to issue;

    • (b) create new classes of shares;

    • (c) change the designation of any or all of the company’s shares, and add, change or remove any rights, privileges, restrictions and conditions, including rights to accrued dividends, in respect of any or all of the company’s shares, whether issued or unissued;

    • (d) change the shares of any class or series, whether issued or unissued, into a different number of shares of the same class or series or into the same or a different number of shares of other classes or series;

    • (e) divide a class of shares, whether issued or unissued, into series and fix the maximum number of shares, if any, in each series and the rights, privileges, restrictions and conditions attached thereto;

    • (f) authorize the directors to divide any class of unissued shares into series and fix the maximum number of shares, if any, in each series and the rights, privileges, restrictions and conditions attached thereto;

    • (g) authorize the directors to change the rights, privileges, restrictions and conditions attached to unissued shares of any series;

    • (h) revoke, diminish or enlarge any authority conferred under paragraphs (f) and (g);

    • (i) change the rights of policyholders to vote at meetings of shareholders or policyholders, subject to subsection 153(1);

    • (i.1) change the name of the company;

    • (j) increase or decrease the number of directors, the minimum or maximum number of directors, the number of directors who are to be elected by the shareholders or the number of directors who are to be elected by the policyholders, subject to subsections 167(1) and 173(4) and (4.1) and section 176; or

    • (k) change the province in which the head office of the company is situated.

  • Marginal note:Shareholder or policyholder approval

    (2) The directors shall submit a by-law, or an amendment to or a repeal of a by-law, that is made under subsection (1) to the shareholders and policyholders entitled to vote, and the shareholders and policyholders may, by special resolution, confirm, amend or reject the by-law, amendment or repeal.

  • Marginal note:Right to vote

    (2.1) The by-laws of a company may provide that each participating share, as defined in section 83.01, of a mutual company carries the right to vote on a proposed addition or amendment to the by-laws to do anything referred to in any of paragraphs (1)(a) to (h), (j) and (k). Where that right is provided for in the by-laws, each of those shares carries that right even if they do not otherwise carry the right to vote.

  • Marginal note:Separate vote

    (2.2) The holders of shares who are entitled under subsection (2.1) to vote on a proposed addition or amendment referred to in that subsection are entitled to vote on it separately from policyholders.

  • Marginal note:Effective date of by-law

    (3) A by-law, or an amendment to or a repeal of a by-law, made under subsection (1) is not effective until it is confirmed or confirmed as amended by the shareholders and policyholders under subsection (2) and, in the case of a by-law respecting a change to the name of the company, approved by the Superintendent.

  • Marginal note:Letters patent

    (4) If the name of a company or the province in Canada in which the head office of the company is situated is changed under this section, the Superintendent may issue letters patent to amend the company’s incorporating instrument accordingly.

  • Marginal note:Effect of letters patent

    (5) Letters patent issued under subsection (4) become effective on the day stated in the letters patent.

  • 1991, c. 47, s. 238
  • 1997, c. 15, s. 217
  • 2001, c. 9, s. 388
  • 2005, c. 54, s. 260
  • 2007, c. 6, s. 204

Marginal note:Class vote

  •  (1) The holders of shares of a class or, subject to subsection (2), of a series are, unless the by-laws otherwise provide in the case of an amendment to the by-laws referred to in paragraph (a), (b) or (e), entitled to vote separately as a class or series on a proposal to amend the by-laws to

    • (a) increase or decrease any maximum number of authorized shares of that class, or increase any maximum number of authorized shares of a class having rights or privileges equal or superior to the shares of that class;

    • (b) effect an exchange, reclassification or cancellation of all or part of the shares of that class;

    • (c) add, change or remove the rights, privileges, restrictions or conditions attached to the shares of that class and, without limiting the generality of the foregoing,

      • (i) remove or change prejudicially rights to accrued dividends or rights to cumulative dividends,

      • (ii) add, remove or change prejudicially redemption rights,

      • (iii) reduce or remove a dividend preference or a liquidation preference, or

      • (iv) add, remove or change prejudicially conversion privileges, options, voting, transfer or pre-emptive rights, or rights to acquire securities of the company, or sinking fund provisions;

    • (d) increase the rights or privileges of any class of shares having rights or privileges equal or superior to the shares of that class;

    • (e) create a new class of shares equal or superior to the shares of that class;

    • (f) make any class of shares having rights or privileges inferior to the shares of that class equal or superior to the shares of that class; or

    • (g) effect an exchange or create a right of exchange of all or part of the shares of another class into the shares of that class.

  • Marginal note:Right limited

    (2) The holders of a series of shares of a class are entitled to vote separately as a series under subsection (1) if that series is affected by an addition or amendment to the by-laws in a manner different from other shares of the same class.

  • Marginal note:Right to vote

    (3) Subsections (1) and (2) apply whether or not the shares of a class otherwise carry the right to vote.

 
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