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

Marginal note:Conditions for order

• 581 (1) The Superintendent shall not make an order under subsection 574(1) in respect of a foreign entity until it has been shown to the satisfaction of the Superintendent that all relevant requirements of this Act have been complied with and that the foreign entity has

  • (a) vested in trust assets of at least five million dollars or any greater amount that the Superintendent specifies;

  • (b) appointed an actuary under section 623 and an auditor under section 633; and

  • (c) established its chief agency.

• Marginal note:Conditions of order

  (2) The order may contain any conditions or limitations that are consistent with this Act and that the Superintendent considers appropriate.

Marginal note:Permissible securities

• 582 (1) The assets of a foreign entity to be vested in trust under paragraph 581(1)(a) are to consist of unencumbered securities of or guaranteed by Canada or a province.

• Marginal note:Other permissible securities

  (2) Those assets may also consist of other securities at the accepted value and on the conditions established by the Superintendent.

Marginal note:Contents of order

583 An order made under subsection 574(1) in respect of a foreign company must set out

• (a) the name of the foreign company and, if different, the name under which it is authorized to insure risks;

• (b) the day on which the order becomes effective;

• (c) the classes of insurance risks that the foreign company is authorized to insure; and

• (d) the conditions or limitations that are consistent with this Act that are considered appropriate by the Superintendent.

Marginal note:Public notice

• 584 (1) On the making of an order under subsection 574(1) in respect of a foreign company, the foreign company must publish a notice of the making of the order in a newspaper in general circulation at or near the place where its chief agency is located.

• Marginal note:Notice in Canada Gazette

  (2) The Superintendent shall cause to be published in the Canada Gazette a notice of the making of the order referred to in subsection (1).

Marginal note:Publication of list

585 Unless the regulations provide otherwise, the Superintendent shall cause to be published quarterly in the Canada Gazette a list of

• (a) foreign companies;

• (b) the classes of insurance specified in the orders of the Superintendent approving the insurance of risks by them;

• (c) their chief agents; and

• (d) the province in which their chief agencies are situated.

Marginal note:Variations

• 586 (1) In respect of an order made under subsection 574(1) in respect of a foreign company, the Superintendent may at any time, by further order,

  • (a) specify additional classes of insurance risks that the foreign company is authorized to insure;

  • (b) make the order subject to conditions or limitations that are consistent with this Act and that are considered appropriate by the Superintendent; or

  • (c) amend or revoke any authorization contained in the order or any condition or limitation to which the order is subject.

• Marginal note:Representations

  (2) Before making any such further order, the Superintendent must give the foreign company an opportunity to make representations regarding that further order.

• (3) to (6) [Repealed, 1996, c. 6, s. 85]

Marginal note:Change of chief agent

• 587 (1) A foreign company that changes its chief agent shall, without delay after doing so, file with the Superintendent a further power of attorney appointing the new chief agent.

• Marginal note:Change of address

  (2) A foreign company that changes the address of its chief agency shall, within 15 days after doing so, send a notice of the change of address to the Superintendent.

Marginal note:Restricted transactions

• 587.1 (1) Except in accordance with this section or an order made under subsection 678.6(1), a foreign company shall not cause itself to be reinsured, on an assumption basis, against all or any portion of the risks undertaken under its policies.

• Marginal note:Approval of the Superintendent

  (2) A foreign company may, with the approval of the Superintendent, cause itself to be reinsured, on an assumption basis, against all or any portion of the risks undertaken under its policies, by one or more of the following entities:

  • (a) a company or society;

  • (b) another foreign company that, in Canada, reinsures those risks; or

  • (c) a body corporate incorporated or formed by or under the laws of a province, if the Superintendent has entered into satisfactory arrangements concerning the reinsurance with either or both of the body corporate and the appropriate official or public body responsible for the supervision of the body corporate.

• Marginal note:Prescribed transactions

  (3) The approval of the Superintendent is not required for a prescribed transaction or a transaction in a prescribed class of transactions.

• Marginal note:Procedure

  (4) The foreign company must, at least 30 days before it applies for the Superintendent’s approval, publish a notice in the Canada Gazette and in a newspaper in general circulation at or near the place where its chief agency is situated stating the day on or after which it will apply.

• Marginal note:Information

  (5) If a foreign company publishes a notice referred to in subsection (4), the Superintendent may direct the foreign company to provide its policyholders with any information that the Superintendent may require.

• Marginal note:Report of independent actuary

  (6) An application for approval must, if the Superintendent so requires, be accompanied by the report of an independent actuary on the proposed reinsurance agreement.

• Marginal note:Inspection

  (7) If a foreign company publishes a notice referred to in subsection (4), it must make the agreement for the transaction that the Superintendent is asked to approve available at its chief agency for the inspection of its policyholders for at least 30 days after the publication of the notice and must provide a copy of the agreement to any policyholder who requests one by writing to the chief agency.

• Marginal note:Superintendent may shorten periods

  (8) If the Superintendent is of the opinion that it is in the best interests of a group of policyholders affected by the transaction that the Superintendent is asked to approve, the Superintendent may shorten the periods of 30 days referred to in subsections (4) and (7).

• Marginal note:Regulations

  (9) The Governor in Council may make regulations respecting the circumstances in which foreign companies are deemed to be causing themselves to be reinsured, on an assumption basis, against risks undertaken under their policies.

Marginal note:Approval by Superintendent

587.2 A transaction referred to in subsection 587.1(2) has no effect until it has been approved by the Superintendent.

Marginal note:Notice to Superintendent

• 587.3 (1) A foreign company proposing to transfer all or substantially all of its policies must give notice of the proposal to the Superintendent.

• Marginal note:Information

  (2) After receiving the notice, the Superintendent may direct the foreign company to provide its policyholders with any information that the Superintendent may require.

Classes of Insurance

Marginal note:Restriction to reinsurance

• 588 (1) A foreign company may reinsure, but shall not otherwise insure, a risk falling within a class of insurance specified in the order made under subsection 574(1) in respect of the foreign company if the order limits the foreign company to the reinsurance of those risks.

• Marginal note:Continuation of certificate conditions

  (2) A condition that limits a foreign company to the reinsurance of risks falling within a class of insurance and that is contained in a certificate of registry issued under the Foreign Insurance Companies Act or under Part VIII of the Canadian and British Insurance Companies Act, or in any other authorization, that had not expired or been withdrawn before June 1, 1992 is deemed to be a condition in an order made under subsection 574(1) in respect of the foreign company.

Marginal note:No new foreign composite companies

589 The Superintendent may not make or vary an order made under subsection 574(1) in respect of a foreign company if the foreign company would as a result be permitted to insure both risks falling within the class of life insurance and risks falling within any other class of insurance other than accident and sickness insurance, credit protection insurance and other approved products insurance.

Marginal note:Saving for existing foreign composite companies

• 590 (1) Despite section 589, subsections 573(4) and 588(2) permit a foreign company to which was issued under the Foreign Insurance Companies Act or Part VIII of the Canadian and British Insurance Companies Act a certificate of registry or other authorization specifying both risks falling within the class of life insurance and risks falling within some other class of insurance, other than accident and sickness insurance, accident insurance, personal accident insurance and sickness insurance, to insure those risks.

• Marginal note:Separate accounts for life insurance

  (2) A foreign company referred to in subsection (1) shall maintain an account and funds in respect of the insurance of risks falling within the classes of life insurance and accident and sickness insurance, accident insurance, personal accident insurance and sickness insurance separately from those maintained in respect of the insurance of risks falling within any other class of insurance.

Marginal note:Compensation association

• 591 (1) Every foreign company that is insuring risks that fall within a class of insurance shall become and remain a member of any compensation association designated by order of the Minister for that class of insurance.

• Marginal note:Designation limitation

  (1.1) A compensation association shall not be designated under subsection (1) unless, in the opinion of the Minister, it has the authority to levy an assessment on each of its members of not less than eighty-five one hundredths of one per cent of the member’s average annual premium income from policies that are eligible for compensation from the association.

• Marginal note:Exceptions

  (2) Subsection (1) does not apply

  • (a) to a foreign company that may reinsure but may not otherwise insure risks;

  • (b) in respect of a class of insurance that, in the opinion of the Minister, is adequately covered by some other compensation plan for that class of insurance;

  • (c) in respect of the insuring in Canada of risks against the loss of, or damage to, property caused by fire, by lightning, by an explosion due to ignition, by smoke or by breakage of or leakage from a sprinkler, from other fire protection equipment or from another fire protection system by a foreign company that is a member of the Fire Mutuals Guarantee Fund; or

  • (d) to a foreign company that is a foreign fraternal benefit society or an exchange.

Segregated Funds

Marginal note:Segregated funds restricted to foreign life companies

592 Unless authorized to insure risks that fall within the class of life insurance, a foreign company shall not

• (a) insure risks under policies, or

• (b) accept or retain on the direction of a policyholder or beneficiary policy dividends or bonuses, or policy proceeds that are payable on the surrender or maturity of the policy or on the death of the person whose life is insured,

where the liabilities of the foreign company in respect of the policies or the amounts accepted or retained vary in amount depending on the market value of a fund consisting of a specified group of assets.

Marginal note:Where segregated funds required

593 A foreign company that issues policies described in section 592 or accepts or retains amounts so described shall, in respect of those policies or amounts,

• (a) maintain separate accounts; and

• (b) establish and maintain one or more funds consisting of assets in Canada that are segregated from the other assets in Canada of the foreign company and that are specified as the assets on the market value of which the liabilities of the foreign company in respect of those policies or amounts depend.

Marginal note:Claims against segregated funds

594 A claim against a segregated fund maintained as required by section 593 under a policy or for an amount in respect of which the fund is maintained has priority over any other claim against the assets of that fund, including the claims referred to in section 161 of the Winding-up and Restructuring Act, except to the extent that the payment of that other claim is secured by a security interest in or on a specific, identifiable asset of the segregated fund.