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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 XIIIForeign Companies (continued)

Insurance of Risks (continued)

Marginal note:Approval by Superintendent

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

  • 2007, c. 6, s. 271

Marginal note:Notice to Superintendent

  •  (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.

  • 2007, c. 6, s. 271

Classes of Insurance

Marginal note:Restriction to reinsurance

  •  (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VIII of the Canadian and British Insurance Companies Act, or in any other authorization, that had not expired or been withdrawn before June 1, 1992 is deemed to be a condition in an order made under subsection 574(1) in respect of the foreign company.

  • 1991, c. 47, s. 588
  • 2007, c. 6, s. 272

Marginal note:No new foreign composite companies

 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.

  • 1991, c. 47, s. 589
  • 1997, c. 15, s. 304
  • 2007, c. 6, s. 272

Marginal note:Saving for existing foreign composite companies

  •  (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.

  • 1991, c. 47, s. 590
  • 2007, c. 6, s. 273

Marginal note:Compensation association

  •  (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.

  • 1991, c. 47, s. 591
  • 1996, c. 6, s. 86
  • 1997, c. 15, s. 305
  • 2007, c. 6, s. 274

Segregated Funds

Marginal note:Segregated funds restricted to foreign life companies

 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.

  • 1991, c. 47, s. 592
  • 2007, c. 6, s. 275

Marginal note:Where segregated funds required

 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

 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.

  • 1991, c. 47, s. 594
  • 1996, c. 6, s. 167
  • 1997, c. 15, s. 306
  • 2007, c. 6, s. 276

Marginal note:Restriction of claims

 The liability of a foreign company under a policy or for an amount in respect of which a segregated fund is maintained pursuant to section 593

  • (a) does not, except to the extent that the assets of the fund are insufficient to satisfy a claim for any minimum amount that the foreign company agrees to pay under the policy or in respect of the amount, give rise to a claim against any assets in Canada of the foreign company, other than the assets of that fund,

but

  • (b) to the extent that the assets of the fund are insufficient to satisfy such a claim, gives rise to a claim against the assets in Canada of the foreign company, other than the assets of that fund, that has the priority referred to in subsection 161(2) of the Winding-up and Restructuring Act.

  • 1991, c. 47, s. 595
  • 1996, c. 6, s. 167
  • 2007, c. 6, s. 276

Reinsurance

Marginal note:Regulations

  •  (1) The Governor in Council may make regulations limiting the extent to which foreign companies may cause themselves to be reinsured against risks undertaken under their policies.

  • Marginal note:Regulation may provide for discretion

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

  • 1991, c. 47, s. 596
  • 2007, c. 6, s. 277

Marginal note:Restriction re related parties

  •  (1) Except with the approval of the Superintendent, a foreign company may cause itself to be reinsured, in respect of risks undertaken under its policies, by a related party of the foreign company only if the related party is

    • (a) a company; or

    • (b) a foreign company that, in Canada, reinsures those risks.

  • Meaning of related party

    (2) For the purposes of this section, related party, in relation to a foreign company, means a related party within the meaning of Part XI, with such modifications as the circumstances require.

  • 1991, c. 47, s. 597
  • 2007, c. 6, s. 278
 
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