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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 IXInvestments (continued)

Miscellaneous (continued)

Marginal note:Transitional

 Nothing in this Part requires

  • (a) the termination of a loan made before February 7, 2001;

  • (b) the termination of a loan made after that date as a result of a commitment made before that date;

  • (c) the disposal of an investment made before that date; or

  • (d) the disposal of an investment made after that date as a result of a commitment made before that date.

But if the loan or investment would be precluded or limited by this Part, the amount of the loan or investment may not, except as provided in subsections 498(2), 499(3) and 500(3), be increased after that date.

  • 1991, c. 47, s. 513
  • 2001, c. 9, s. 426

Marginal note:Deeming

 A loan or investment referred to in section 513 is deemed not to be prohibited by the provisions of this Part.

PART XAdequacy of Capital and Liquidity and Assets

Marginal note:Adequacy of capital and liquidity — companies and societies

  •  (1) A company and society shall, in relation to its operations, maintain adequate capital and adequate and appropriate forms of liquidity and shall comply with any regulations in relation to adequate capital and adequate and appropriate forms of liquidity.

  • Marginal note:Regulations and guidelines

    (2) The Governor in Council may make regulations and the Superintendent may make guidelines respecting the maintenance by companies and societies of adequate capital and adequate and appropriate forms of liquidity.

  • Marginal note:Directives

    (3) Notwithstanding that a company or society is complying with regulations or guidelines made under subsection (2), the Superintendent may, by order, direct the company or society to increase its capital or to provide additional liquidity in any forms and amounts that the Superintendent may require.

  • Marginal note:Compliance

    (4) A company and society shall comply with an order made under subsection (3) within the time that the Superintendent specifies in the order.

  • 1991, c. 47, s. 515
  • 1996, c. 6, s. 81
  • 2001, c. 9, s. 427

 [Repealed, 2007, c. 6, s. 240]

Marginal note:Notice of value

 Where an appraisal of any asset held by a company or any of its subsidiaries has been made by the Superintendent and the value determined by the Superintendent to be the appropriate value of the asset varies materially from the value placed by the company or subsidiary on the asset, the Superintendent shall send to the company, the auditor of the company, the actuary of the company and the audit committee of the company a written notice of the appropriate value of the asset as determined by the Superintendent.

PART XISelf-dealing

Interpretation and Application

Definition of senior officer

 For the purposes of this Part, a senior officer of a body corporate is a person who is

  • (a) a director of the body corporate who is a full-time employee of the body corporate;

  • (b) the chief executive officer, chief operating officer, president, secretary, treasurer, controller, chief financial officer, chief accountant, chief auditor or chief actuary of the body corporate;

  • (c) a natural person who performs functions for the body corporate similar to those performed by a person referred to in paragraph (b);

  • (d) the head of the strategic planning unit of the body corporate;

  • (e) the head of the unit of the body corporate that provides legal services or human resources services to the body corporate; or

  • (f) any other officer reporting directly to the body corporate’s board of directors, chief executive officer or chief operating officer.

  • 1997, c. 15, s. 276

Marginal note:Related party of company

  •  (1) For the purposes of this Part, a person is a related party of a company where the person

    • (a) is a person who has a significant interest in a class of shares of the company;

    • (b) is a director or senior officer of the company or of a body corporate that controls the company or is acting in a similar capacity in respect of an unincorporated entity that controls the company;

    • (c) is the spouse or common-law partner, or a child who is less than eighteen years of age, of a person described in paragraph (a) or (b);

    • (d) is an entity that is controlled by a person referred to in any of paragraphs (a) to (c);

    • (e) is an entity in which a person who controls the company has a substantial investment;

    • (f) is an entity in which the spouse or common-law partner, or a child who is less than eighteen years of age, of a person who controls the company has a substantial investment; or

    • (g) is a person, or a member of a class of persons, designated under subsection (4) or (5) as, or deemed under subsection (6) to be, a related party of the company.

    • (h) [Repealed, 1997, c. 15, s. 277]

  • Marginal note:Exception — subsidiaries and substantial investments of companies

    (2) If an entity in which a company has a substantial investment would, but for this subsection, be a related party of the company only because a person who controls the company controls the entity or has a substantial investment in the entity, and the person does not control the entity or have a substantial investment in the entity otherwise than through the person’s controlling interest in the company, the entity is not a related party of the company.

  • Marginal note:Deeming

    (3) The holding body corporate of a company is deemed not to be a person referred to in paragraph (1)(a) if the holding body corporate is a foreign company.

  • Marginal note:Designated related party

    (4) For the purposes of this Part, the Superintendent may, with respect to a particular company, designate as a related party of the company

    • (a) any person or class of persons whose direct or indirect interest in or relationship with the company or a related party of the company might reasonably be expected to affect the exercise of the best judgment of the company in respect of a transaction; or

    • (b) any person who is a party to any agreement, commitment or understanding referred to in section 9 if the company referred to in that section is the particular company.

  • Marginal note:Idem

    (5) Where a person is designated as a related party of a company pursuant to subsection (4), the Superintendent may also designate any entity in which the person has a substantial investment and any entity controlled by such an entity to be a related party of the company.

  • Marginal note:Deemed related party

    (6) Where, in contemplation of a person becoming a related party of a company, the company enters into a transaction with the person, the person is deemed for the purposes of this Part to be a related party of the company in respect of that transaction.

  • Marginal note:Holders of exempted shares

    (7) The Superintendent may, by order, designate a class of non-voting shares of a company for the purpose of this subsection. If a class of non-voting shares of a company is so designated, a person is deemed, notwithstanding paragraph (1)(a), not to be a related party of the company if the person would otherwise be a related party of the company only because the person has a significant interest in that class.

  • Marginal note:Determination of substantial investment

    (8) For the purpose of determining whether an entity or a person has a substantial investment for the purposes of paragraph (1)(e) or (f), the references to “control” and “controlled” in section 10 shall be construed as references to “control, within the meaning of section 3, determined without regard to paragraph 3(1)(d)” and “controlled, within the meaning of section 3, determined without regard to paragraph 3(1)(d)”, respectively.

  • Marginal note:Determination of control

    (9) For the purposes of paragraph (1)(d), controlled means “controlled, within the meaning of section 3, determined without regard to paragraph 3(1)(d)”.

  • 1991, c. 47, s. 518
  • 1997, c. 15, s. 277
  • 2000, c. 12, s. 158

Marginal note:Non-application of Part

  •  (1) This Part does not apply in respect of any transaction entered into prior to the coming into force of this Part but, after the coming into force of this Part, any modification of, addition to, or renewal or extension of a prior transaction is subject to this Part.

  • Marginal note:Idem

    (2) This Part does not apply in respect of

    • (a) assets of a segregated fund maintained pursuant to section 451 if

      • (i) all the policies in respect of which the fund is maintained are held by one person or all the amounts in respect of which it is maintained are retained on the direction of one person, or

      • (ii) the assets of the fund reflect the securities upon which a generally recognized market index is based and the weighting of those securities in that index;

    • (b) the issue by the company of shares of any class when fully paid for in money or when issued

      • (i) in accordance with any provisions for the conversion of other issued and outstanding securities of the company into shares of that class,

      • (ii) as a share dividend,

      • (iii) in exchange for shares of a body corporate that has been continued as a company under Part III,

      • (iv) in accordance with the terms of an amalgamation under Part VI,

      • (v) by way of consideration in accordance with the terms of a sale agreement under Part VI, or

      • (vi) with the approval in writing of the Superintendent, in exchange for shares of another body corporate;

    • (c) the payment of dividends or policy dividends or bonuses by a company;

    • (d) transactions that consist of the payment or provision by a company to persons who are related parties of the company of salaries, fees, stock options, policy premiums, pension benefits, incentive benefits or other benefits or remuneration in their capacity as directors, officers or employees of the company;

    • (e) transactions approved by the Minister under subsection 715(1) of this Act or subsection 678(1) of the Bank Act; or

    • (f) if a company is controlled by a widely held insurance holding company or a widely held bank holding company, transactions approved by the Superintendent that are entered as part of, or in the course of, a restructuring of the holding company or of any entity controlled by it.

  • Marginal note:Exception

    (3) Nothing in paragraph (2)(d) exempts from the application of this Part the payment by a company of fees or other remuneration to a person for

    • (a) the provision of services referred to in paragraph 528(1)(a); or

    • (b) duties outside the ordinary course of business of the company.

  • Marginal note:Exception for holding body corporate

    (4) A holding body corporate of a company is not a related party of the company if the holding body corporate is a Canadian financial institution that is referred to in any of paragraphs (a) to (d) of the definition financial institution in subsection 2(1).

  • Marginal note:Substantial investment — related party exception

    (5) Where a holding body corporate of a company is, because of subsection (4), not a related party of the company, any entity in which the holding body corporate has a substantial investment is not a related party of the company if no related party of the company has a substantial investment in the entity otherwise than through the control of the holding body corporate.

  • 1991, c. 47, s. 519, c. 48, s. 495
  • 1997, c. 15, s. 278
  • 2001, c. 9, s. 428
  • 2007, c. 6, s. 241
 
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