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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 XIIFraternal Benefit Societies

Interpretation

Marginal note:Definitions

  •  (1) In this Part,

    by-law

    by-law includes the incorporating instrument of a society; (règlement administratif)

    permitted entity

    permitted entity means an entity in which a society is permitted to acquire a substantial investment under section 554; (entité admissible)

    subordinate branch

    subordinate branch means a division of a society as described in the by-laws of the society; (succursale secondaire)

    supreme governing body

    supreme governing body means a board of directors or any other group within a society having ultimate authority for managing the business and affairs of the society. (conseil supérieur de direction)

  • Marginal note:Members of a society’s group

    (2) For the purpose of section 554, a member of a society’s group is any of the following:

    • (a) a subsidiary of the society;

    • (b) an entity in which the society has a substantial investment; or

    • (c) a prescribed entity in relation to the society.

  • Marginal note:Words of Part IX

    (3) Words and expressions that are defined for the purposes of Part IX and referred to in this Part, other than “permitted entity”, have, for the purposes of this Part, the meanings assigned to them by that Part with any modifications that the circumstances require.

  • 1991, c. 47, s. 540
  • 2001, c. 9, s. 432

Powers

Marginal note:Granting of sickness benefits by subordinate branch

 No by-law of a society shall empower or purport to empower any subordinate branch of the society to grant sickness benefits to any member of the branch unless the by-law makes adequate provision to secure on an actuarial basis the solvency of the sick benefit fund of the branch.

Marginal note:Society’s business

  •  (1) Except as otherwise permitted by this Act, a society shall not carry on a business that does not relate to the business of the insuring of risks in respect of its members or the spouses, common-law partners or children of its members.

  • Marginal note:Additional activities

    (2) A society may

    • (a) with the consent of the Minister, engage in activities that are reasonably ancillary to the society’s insurance business;

    • (b) engage in fraternal, benevolent or religious activities;

    • (c) hold, manage and otherwise deal with real property;

    • (d) act as an agent for a person, or enter into any other arrangement with a person, in respect of the provision of a service by

      • (i) a financial institution that is primarily engaged in an insurance business, or

      • (ii) a body corporate in which a society is permitted by section 554 to have a substantial investment; and

    • (e) refer persons to a financial institution or body corporate described in paragraph (d).

  • Marginal note:By-law required

    (3) A society shall not carry on the business of insuring risks unless it is authorized to do so by a by-law of the society passed on the recommendation of the society’s actuary and approved by the Superintendent.

  • Marginal note:Classes of insurance

    (4) A society shall not insure a risk that is not within a class of insurance that is specified in the order of the Superintendent approving the commencement and carrying on of business by the society. The classes that may be specified in that order are the class of life insurance, the class of accident and sickness insurance or both of those classes.

  • Marginal note:Restriction on leasing

    (5) A society shall not engage in Canada in any financial leasing of personal property.

  • 1991, c. 47, s. 542
  • 1996, c. 6, s. 167
  • 1997, c. 15, s. 285
  • 2000, c. 12, s. 156

Marginal note:Separate accounts

 A society shall maintain a separate account in respect of each class of insurance in which it is authorized to insure risks.

  • 1997, c. 15, s. 285

Marginal note:Actuary’s certificate

 A society’s actuary shall certify whether the society’s rates of benefit are reasonable, and whether the amounts of insurance to be issued by the society are reasonable, having regard to

  • (a) the conditions and circumstances for the issuance of policies by the society;

  • (b) the sufficiency of the rates of contribution to provide for those benefits and those amounts of insurance; and

  • (c) the reasonableness of the loan values, cash values and other equities that may be provided under the policies.

  • 1997, c. 15, s. 285

Marginal note:Segregated fund restriction

  •  (1) Only a society that is authorized to insure risks within the class of life insurance may

    • (a) issue policies where the liabilities of the society in respect of the policies vary in amount depending on the market value of a fund consisting of a specified group of assets; 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 society in respect of 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:Segregated funds required

    (2) A society that issues policies described in paragraph (1)(a) or accepts or retains amounts described in paragraph (1)(b) shall

    • (a) maintain separate accounts in respect of those policies or amounts; and

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

  • Marginal note:Creation and maintenance of segregated funds

    (3) For the purpose of establishing or maintaining a segregated fund required by subsection (2), a society may, subject to the regulations, transfer an amount to the separate account maintained in respect of the segregated fund.

  • Marginal note:Transfers from segregated funds

    (4) A society may return the current value of an amount transferred under subsection (3) to the account from which the amount was transferred.

  • Marginal note:Claims against segregated funds

    (5) A claim against a segregated fund maintained under subsection (2) 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.

  • Marginal note:Where fund can satisfy claim

    (6) The liability of a society under a policy or for an amount in respect of which a segregated fund is maintained under subsection (2) does not, except to the extent that the assets of the fund are insufficient to satisfy a claim for any minimum amount that the society agrees to pay under the policy or in respect of the amount, give rise to a claim against any assets of the society, other than the assets of that fund.

  • Marginal note:Where fund cannot satisfy claim

    (7) To the extent that the assets of the fund are insufficient to satisfy the liability of a society under a policy or for an amount in respect of which a segregated fund is maintained under subsection (2), that liability gives rise to a claim against the assets of the society, other than the assets of that fund, and that claim has the priority referred to in subsection 161(2) of the Winding-up and Restructuring Act.

  • 1997, c. 15, s. 285
  • 2007, c. 6, s. 248

Marginal note:Regulations

  •  (1) The Governor in Council may make regulations limiting the extent to which a society may cause itself to be reinsured against risks undertaken under its policies.

  • Marginal note:Regulation may delegate to Superintendent

    (2) A regulation made under subsection (1) may provide that the Superintendent may, by order, determine the matters or exercise the discretion that the regulation specifies.

  • 1997, c. 15, s. 285
  • 2007, c. 6, s. 249
 
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