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

SUBDIVISION 15Liquidation and Dissolution

Interpretation

Definition of court

917 In this Subdivision, court means a court having jurisdiction in the place where the insurance holding company has its head office.

Application

Marginal note:Application of Subdivision

• 918 (1) This Subdivision does not apply to an insurance holding company that is an insolvent person or a bankrupt as those terms are defined in subsection 2(1) of the Bankruptcy and Insolvency Act.

• Marginal note:Staying proceedings on insolvency

  (2) Any proceedings taken under this Subdivision to dissolve or to liquidate and dissolve an insurance holding company shall be stayed if the insurance holding company is at any time found in a proceeding under the Bankruptcy and Insolvency Act to be an insolvent person as defined in subsection 2(1) of that Act.

• Marginal note:Winding-up and Restructuring Act does not apply

  (3) The Winding-up and Restructuring Act does not apply to an insurance holding company.

Marginal note:Returns to Superintendent

919 A liquidator appointed under this Subdivision to wind up the business of an insurance holding company shall provide the Superintendent with such information relating to the business and affairs of the insurance holding company in such form as the Superintendent requires.

Simple Liquidation

Marginal note:No property and no liabilities

• 920 (1) An insurance holding company that has no property and no liabilities may, if authorized by a special resolution of the shareholders or, if there are no shareholders, by a resolution of all the directors, apply to the Minister for letters patent dissolving the insurance holding company.

• Marginal note:Dissolution by letters patent

  (2) Where the Minister has received an application under subsection (1) and is satisfied that all the circumstances so warrant, the Minister may issue letters patent dissolving the insurance holding company.

• Marginal note:Effect of letters patent

  (3) An insurance holding company in respect of which letters patent are issued under subsection (2) ceases to exist on the day stated in the letters patent.

Marginal note:Proposing liquidation

• 921 (1) The voluntary liquidation and dissolution of an insurance holding company, other than an insurance holding company referred to in subsection 920(1),

  • (a) may be proposed by its directors; or

  • (b) may be initiated by way of a proposal made by a shareholder who is entitled to vote at an annual meeting of shareholders in accordance with sections 770 and 771.

• Marginal note:Terms must be set out

  (2) A notice of any meeting of shareholders at which the voluntary liquidation and dissolution of an insurance holding company is to be proposed shall set out the terms of the proposal.

Marginal note:Shareholders’ resolution

922 Where the voluntary liquidation and dissolution of an insurance holding company is proposed, the insurance holding company may apply to the Minister for letters patent dissolving the insurance holding company if authorized by a special resolution of the shareholders or, where the insurance holding company has issued more than one class of shares, by special resolution of each class of shareholders whether or not those shareholders are otherwise entitled to vote.

Marginal note:Approval of Minister required

• 923 (1) No action directed toward the voluntary liquidation and dissolution of an insurance holding company shall be taken by an insurance holding company, other than as provided in sections 921 and 922, until an application made by the insurance holding company pursuant to section 922 has been approved by the Minister.

• Marginal note:Conditional approval

  (2) Where the Minister is satisfied on the basis of an application made under section 922 that the circumstances warrant the voluntary liquidation and dissolution of an insurance holding company, the Minister may, by order, approve the application.

• Marginal note:Effect of approval

  (3) Where the Minister has approved an application made pursuant to section 922 with respect to an insurance holding company, the insurance holding company shall not carry on business except to the extent necessary to complete its voluntary liquidation.

• Marginal note:Liquidation process

  (4) Where the Minister has approved an application made pursuant to section 922 with respect to an insurance holding company, the insurance holding company shall

  • (a) cause notice of the approval to be sent to each known claimant against and creditor of the insurance holding company;

  • (b) publish notice of the approval once a week for four consecutive weeks in the Canada Gazette and once a week for two consecutive weeks in one or more newspapers in general circulation in each province in which the insurance holding company transacted any business within the preceding twelve months;

  • (c) proceed to collect its property, dispose of property that is not to be distributed in kind to its shareholders, discharge or provide for all its obligations and do all other acts required to liquidate its business; and

  • (d) after giving the notice required under paragraphs (a) and (b) and adequately providing for the payment or discharge of all its obligations, distribute its remaining property, either in money or in kind, among its shareholders according to their respective rights.

Marginal note:Dissolution instrument

• 924 (1) Unless a court has made an order in accordance with subsection 385(1), the Minister may, if satisfied that the insurance holding company has complied with subsection 923(4) and that all the circumstances so warrant, issue letters patent dissolving the insurance holding company.

• Marginal note:Insurance holding company dissolved

  (2) An insurance holding company in respect of which letters patent are issued under subsection (1) is dissolved and ceases to exist on the day stated in the letters patent.

Court-supervised Liquidation

Marginal note:Sections 385 to 406 apply

925 Sections 385 to 406 apply in respect of insurance holding companies, subject to the following:

• (a) references to “company” in those sections are to be read as references to “insurance holding company”;

• (b) references to “this Part” in those sections are to be read as references to “this Division”;

• (c) references to “this Division” in those sections are to be read as references to “this Subdivision”;

• (d) those sections are to be read without reference to “policyholder”;

• (e) the reference to “subsection 331(1)” in paragraph 391(1)(i) is to be read as a reference to “subsection 887(1)”; and

• (f) the reference to “section 668” in subsection 400(2) is to be read as a reference to “section 994”.

DIVISION 7Ownership

Marginal note:Sections 406.1 and 406.2 apply

926 Sections 406.1 and 406.2 apply in respect of insurance holding companies, except that references to “company” in section 406.2 are to be read as references to “insurance holding company”.

Marginal note:Constraining acquisition

• 927 (1) No person, or entity controlled by a person, shall, without the approval of the Minister, purchase or otherwise acquire any share of an insurance holding company or purchase or otherwise acquire control of any entity that holds any share of an insurance holding company if

  • (a) the acquisition would cause the person to have a significant interest in any class of shares of the insurance holding company; or

  • (b) where the person has a significant interest in a class of shares of the insurance holding company, the acquisition would increase the significant interest of the person in that class of shares.

• Marginal note:Amalgamation, etc., constitutes acquisition

  (2) If the entity that would result from an amalgamation, a merger or a reorganization would have a significant interest in a class of shares of an insurance holding company, the entity is deemed to be acquiring a significant interest in that class of shares of the insurance holding company through an acquisition for which the approval of the Minister is required under subsection (1).

• Marginal note:Exemption

  (3) On application by an insurance holding company, other than an insurance holding company in respect of which subsection (4) or (6) applies, the Superintendent may exempt from the application of subsection (1) and section 934 any class of non-voting shares of the insurance holding company if the aggregate book value of the shares of the class is not more than 30 per cent of the aggregate book value of all the outstanding shares of the insurance holding company.

• Marginal note:Limitations on share holdings

  (4) Despite subsection (1), no person may be a major shareholder of an insurance holding company to which subsection 407(6) applies.

• Marginal note:Exception

  (5) Subsection (4) no longer applies in respect of any particular insurance holding company if the Minister makes an order under subsection 407(8) determining that subsection 407(4) no longer applies in respect of a converted company controlled by the insurance holding company.

• Marginal note:Limitations on share holdings

  (6) Despite subsection (1), until a day that is two years after December 31, 1999, no person may have a significant interest in any class of shares of an insurance holding company to which subsection 407(13) applies.

Marginal note:Major shareholder

• 928 (1) If an insurance holding company in respect of which subsection 927(4) applies controls a life company and a person becomes a major shareholder of the life company or of any entity that also controls the life company, the insurance holding company must to do all things necessary to ensure that, on the day that is one year after the person became a major shareholder of the life company or entity that controls the life company,

  • (a) the insurance holding company no longer controls the life company; or

  • (b) the life company or the entity that controls the life company does not have any major shareholder other than the insurance holding company or any entity that the insurance holding company controls.

• Marginal note:Exemption

  (2) Subsection (1) does not apply in respect of a life company with equity of less than two hundred and fifty million dollars, or any other amount that may be prescribed.

• Marginal note:Extension

  (3) If general market conditions so warrant and the Minister is satisfied that the insurance holding company has used its best efforts to be in compliance with subsection (1) on the required day, the Minister may specify a later day as the day from and after which it must comply with that subsection.

Marginal note:Major shareholder

• 928.1 (1) Despite subsection 928(1), if an insurance holding company in respect of which subsection 927(4) applies controls a life company in respect of which subsection 928(1) does not apply by reason of subsection 928(2) and the equity of the life company reaches two hundred and fifty million dollars or more or any other amount that is prescribed and on the day the equity of the life company reaches two hundred and fifty million dollars or more, or the prescribed amount, as the case may be, a person is a major shareholder of the life company or of any entity that also controls the life company, the insurance holding company must do all things necessary to ensure that, on the day that is three years after that day,

  • (a) the insurance holding company no longer controls the life company; or

  • (b) the life company or the entity that controls the life company does not have any major shareholder other than the insurance holding company or any entity that the insurance holding company controls.

• Marginal note:Extension

  (2) If general market conditions so warrant and the Minister is satisfied that the insurance holding company has used its best efforts to be in compliance with subsection (1) on the required day, the Minister may specify a later day as the day from and after which it must comply with that subsection.

Marginal note:Significant interest

• 929 (1) If an insurance holding company in respect of which subsection 927(6) applies controls a life company and a person acquires a significant interest in any class of shares of the life company or of any entity that also controls the life company, the insurance holding company must to do all things necessary to ensure that, on the day that is one year after the person acquired the significant interest in the class of shares of the life company or entity that controls the life company,

  • (a) the insurance holding company no longer controls the life company; or

  • (b) no person has a significant interest in any class of shares of the life company or the entity that controls the life company, other than the insurance holding company or any entity that the insurance holding company controls.

• Marginal note:Exemption

  (2) Subsection (1) does not apply in respect of a life company with equity of less than two hundred and fifty million dollars, or any other amount that may be prescribed.

• Marginal note:Extension

  (3) If general market conditions so warrant and the Minister is satisfied that the insurance holding company has used its best efforts to be in compliance with subsection (1) on the required day, the Minister may specify a later day as the day from and after which it must comply with that subsection.

Marginal note:Prohibition against significant interest

930 No person who has a significant interest in any class of shares of a widely held insurance holding company in respect of which subsection 927(4) applies may have a significant interest in any class of shares of a subsidiary of the insurance holding company that is a life company or an insurance holding company.

Marginal note:Prohibition against significant interest

931 No person who has a significant interest in any class of shares of an insurance holding company may have a significant interest in any class of shares of

• (a) a widely held converted company in respect of which subsection 407(4) applies that controls the insurance holding company;

• (b) a widely held company to which subsection 407(5) applies that controls the insurance holding company; or

• (c) a widely held insurance holding company in respect of which subsection 407(6) applies that controls the insurance holding company.

Marginal note:No acquisition of control without approval

• 932 (1) No person shall acquire control, within the meaning of paragraph 3(1)(d), of an insurance holding company without the approval of the Minister.

• Marginal note:Amalgamation, etc., constitutes acquisition

  (2) If the entity that would result from an amalgamation, a merger or a reorganization would control, within the meaning of paragraph 3(1)(d), an insurance holding company, the entity is deemed to be acquiring control, within the meaning of that paragraph, of the insurance holding company through an acquisition for which the approval of the Minister is required under subsection (1).