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

Miscellaneous

Marginal note:Prepayment protected

• 606 (1) A foreign company shall not include in its assets in Canada any loan to a natural person that is repayable in Canada, the terms of which prohibit prepayment of the money advanced or any instalment thereon before its due date.

• Marginal note:Non-application of subsection (1)

  (2) Subsection (1) does not apply in respect of a loan

  • (a) that is secured by a mortgage on real property; or

  • (b) that is made for business purposes and the principal amount of which is more than $100,000 or such other amount as may be prescribed.

Marginal note:Regulations — activities

606.1 The Governor in Council may make regulations respecting any matters involving a foreign company’s dealings, or its employees’ or representatives’ dealings, with customers or the public, including

• (a) what a foreign company may or may not do in carrying out any of the activities in which it is permitted to engage, or in providing any of the services that it may provide, under this Act and any ancillary, related or incidental activities or services; and

• (b) the time and place at which and the form and manner in which any of those activities are to be carried out or any of those services are to be provided.

Marginal note:Regulations re customer information

607 The Governor in Council may make regulations

• (a) requiring a foreign company to establish procedures regarding the collection, retention, use and disclosure of any information about its customers in Canada or any class of customers in Canada;

• (b) requiring a foreign company to establish procedures for dealing with complaints made by a customer in Canada about the collection, retention, use or disclosure of information about the customer;

• (c) respecting the disclosure by a foreign company of information relating to the procedures referred to in paragraphs (a) and (b);

• (d) requiring a foreign company to designate the officers and employees of the company who are responsible for

  • (i) implementing the procedures referred to in paragraph (b), and

  • (ii) receiving and dealing with complaints made by a customer, in Canada, of the foreign company about the collection, retention, use or disclosure of information about the customer;

• (e) requiring a foreign company to report information relating to

  • (i) complaints made by its customers in Canada about the collection, retention, use or disclosure of information, and

  • (ii) its actions taken to deal with the complaints; and

• (f) defining information, collection and retention for the purposes of paragraphs (a) to (e) and the regulations made under those paragraphs.

Marginal note:Regulations re disclosure

607.1 The Governor in Council may, subject to any other provisions of this Act relating to the disclosure of information, make regulations respecting the disclosure of information by foreign companies or any prescribed class of foreign companies, including regulations respecting

• (a) the information that must be disclosed, including information relating to

  • (i) any product or service or prescribed class of products or services offered by them,

  • (ii) any of their policies, procedures or practices relating to the offer by them of any product or service or prescribed class of products or services,

  • (iii) anything they are required to do or to refrain from doing under a consumer provision, and

  • (iv) any other matter that may affect their dealings, or their employees’ or representatives’ dealings, with customers or the public;

• (b) the time and place at which, the form and manner in which and the persons to whom information is to be disclosed; and

• (c) the content and form of any advertisement by foreign companies or any prescribed class of foreign companies relating to any matter referred to in paragraph (a).

Marginal note:Provisions that do not apply

• 607.2 (1) Sections 598 to 607.1 do not apply in respect of a foreign company if

  • (a) the order made under subsection 574(1) in respect of the foreign company restricts it to the reinsurance of risks within a class of insurance specified in the order;

  • (b) the foreign company has provided the Commissioner with a declaration stating that it is not dealing with a prescribed group of consumers; and

  • (c) after providing the declaration, the foreign company continues to not deal with that prescribed group.

• Marginal note:Notice if action taken that causes provisions to apply

  (2) The foreign company must give notice to the Commissioner if it subsequently deals with the prescribed group referred to in the declaration.

Adequacy of Assets

Marginal note:Adequacy of assets and appropriate forms of liquidity

• 608 (1) A foreign company shall maintain in Canada an adequate margin of assets over liabilities in respect of its insurance business in Canada as shown in the records it is required to maintain under section 647, and adequate and appropriate forms of liquidity, and shall comply with any regulations in relation to an adequate margin of assets over liabilities and adequate and appropriate forms of liquidity.

• Marginal note:Liabilities

  (2) For the purposes of subsection (1), the liabilities in Canada of a foreign company include the reserve included in the annual return required under subsection 665(2).

• Marginal note:Guidelines

  (3) The Superintendent may make guidelines in respect of any matter referred to in paragraph 610(1)(a).

• Marginal note:Directives

  (4) Even though a foreign company is complying with regulations made under paragraph 610(1)(a) or guidelines made under subsection (3), the Superintendent may, by order, direct the foreign company to increase the margin of its assets over its liabilities that it is required to maintain in Canada or to provide additional liquidity in the forms and the amounts that the Superintendent requires.

• Marginal note:Compliance

  (5) A foreign company shall comply with an order made under subsection (4) within the time that the Superintendent specifies in the order.

Marginal note:Adequacy of assets

• 609 (1) A foreign company shall, in relation to each class of insurance risks that it is permitted to insure, maintain in Canada, in accordance with the regulations, assets the total value of which shall be determined in accordance with the regulations.

• Marginal note:Guidelines

  (1.1) The Superintendent may make guidelines in respect of any matter referred to in paragraph 610(1)(b).

• Marginal note:Directives

  (2) Even though a foreign company is complying with regulations made under paragraph 610(1)(b) or guidelines made under subsection (1.1), the Superintendent may, by order, direct the foreign company to increase the assets that it is required to maintain in Canada.

• Marginal note:Compliance

  (3) A foreign company shall comply with an order made under subsection (2) within such time as the Superintendent specifies therein.

Marginal note:Regulations

• 610 (1) The Governor in Council may make regulations

  • (a) respecting the maintenance by foreign companies of an adequate margin of assets in Canada over liabilities in Canada and adequate and appropriate forms of liquidity;

  • (b) respecting the maintenance by foreign companies of assets in Canada of a particular value, which regulations may make special provision for associations and exchanges;

  • (c) prescribing rules for determining the value, location and protection of the assets of foreign companies;

  • (d) governing the determination of the reserves to be included in the liabilities of foreign companies;

  • (e) determining the method of calculating the value of interests of foreign companies in real property for the purposes of section 618; and

  • (f) prescribing anything that is required or authorized by this Part to be prescribed.

• Marginal note:Regulation may provide for discretion

  (2) A regulation made pursuant to paragraph (1)(b) may provide that the Superintendent may, by order, determine the matters or exercise the discretion that the regulations may specify.

Marginal note:Vesting in trust

• 611 (1) The assets that a foreign company is required to maintain in Canada under sections 608 and 609 and the regulations made under section 610 must be vested in trust in a Canadian financial institution chosen by the foreign company.

• Marginal note:Conflict of interest

  (2) No Canadian financial institution may be appointed as trustee if at the time of the appointment there is a material conflict of interest between the Canadian financial institution’s role as trustee and any other of its roles.

• Marginal note:Trust deed

  (3) A trust deed must be approved by the Superintendent before it is entered into.

• Marginal note:Determination of value of assets in Canada

  (4) The Superintendent shall determine the value at which assets shall be accepted for the purposes of this Part.

• Marginal note:Maintenance of value of assets in Canada

  (5) The trustee of a foreign company may deal with the assets in Canada in any manner provided for in the trust deed, but in such a way that the value for the purposes of this Part of the assets in Canada does not fall below that required by this Part.

Marginal note:Inadmissible assets

• 612 (1) A foreign company may not vest in trust

  • (a) securities issued by or debt obligations of the foreign company or one of its affiliates;

  • (b) real property, or ground rents or mortgages on real property, situated outside Canada;

  • (c) shares or ownership interests, however designated, in any entity in such number as would constitute a substantial investment in that entity without regard to any shares or ownership interests held by any other entity; or

  • (d) a loan made in Canada on the security of residential property in Canada for the purpose of purchasing, renovating or improving that property, if the amount of the loan, together with the amount then outstanding of any mortgage having an equal or prior claim against the property, would exceed 80 per cent of the value of the property at the time of the loan.

• Marginal note:Exception

  (2) Despite paragraphs (1)(a) and (c), a foreign company may vest in trust a substantial investment in an entity that is primarily engaged in

  • (a) holding, managing or otherwise dealing with real property; or

  • (b) holding shares or ownership interests in entities that are primarily engaged in any of the activities referred to in paragraph (a).

• Marginal note:Idem

  (3) Notwithstanding paragraph (1)(d), a foreign company may vest in trust

  • (a) a loan made or guaranteed under the National Housing Act or any other Act of Parliament by or pursuant to which a different limit on the value of property on the security of which the foreign company may make a loan is established;

  • (b) a loan if repayment of the amount of the loan that exceeds the maximum amount set out in subsection (1) is guaranteed or insured by a government agency or a private insurer approved by the Superintendent; or

  • (c) securities issued or guaranteed by an entity that are secured on any residential property, whether in favour of a trustee or otherwise, or a loan made by the foreign company to the entity against the issue of such securities.

Investments

Definitions and Application

Definition of commercial loan

613 In sections 615 to 620, commercial loan has the same meaning as in Part IX.

Marginal note:Non-application

• 614 (1) Sections 612 and 615 to 620 do not apply in respect of assets of a foreign company held in relation to a segregated fund maintained pursuant to section 593.

• Marginal note:Exclusion of liabilities of segregated funds

  (2) A reference in sections 615 to 619 and in regulations made under section 620 to the assets in Canada or the liabilities in Canada of a foreign company does not include liabilities of the foreign company for the policies and amounts in respect of which a segregated fund is maintained pursuant to section 593.

General Constraints on Investments

Marginal note:Investment standards

• 615 (1) A foreign company shall, in respect of its assets in Canada, establish and adhere to investment and lending policies, standards and procedures that a reasonable and prudent person would apply in respect of a portfolio of investments and loans to avoid undue risk of loss and obtain a reasonable return.

• Marginal note:Resolution of board of directors

  (2) A foreign company to which subsection 573(4) applies shall, during the period of ninety days following the coming into force of this Part, file with the Superintendent a certified copy of a resolution of its board of directors establishing the investment and lending policies, standards and procedures referred to in subsection (1).

Commercial Lending by Foreign Life Companies

Marginal note:Lending limit — foreign life companies

• 616 (1) The total accepted value of commercial loans vested in trust by a foreign life company for the classes of life insurance, accident and sickness insurance, credit protection insurance and other approved products insurance shall not at any time exceed the prescribed percentage of the value of its assets in Canada for those classes.

• Marginal note:Lending limit — foreign composite companies

  (2) The total accepted value of the commercial loans and loans to natural persons vested in trust by a foreign life company for the classes of insurance other than life insurance, accident and sickness insurance, credit protection insurance and other approved products insurance, shall not at any time exceed the prescribed percentage of the value of its assets in Canada for those classes.