PART XIIIForeign Companies (continued)
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.
(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).
(3) The Superintendent may make guidelines in respect of any matter referred to in paragraph 610(1)(a).
(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.
(5) A foreign company shall comply with an order made under subsection (4) within the time that the Superintendent specifies in the order.
- 1991, c. 47, s. 608
- 1996, c. 6, s. 87
- 2001, c. 9, s. 446
- 2007, c. 6, s. 286
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.
(1.1) The Superintendent may make guidelines in respect of any matter referred to in paragraph 610(1)(b).
(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.
(3) A foreign company shall comply with an order made under subsection (2) within such time as the Superintendent specifies therein.
- 1991, c. 47, s. 609
- 1996, c. 6, s. 88
- 2007, c. 6, s. 287
(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.
- 1991, c. 47, s. 610
- 2001, c. 9, s. 447(E)
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.
- 1991, c. 47, s. 611
- 2001, c. 9, s. 448
Marginal note:Inadmissible assets
(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.
(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
(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.
- 1991, c. 47, s. 612
- 1993, c. 34, s. 85(E)
- 1997, c. 15, s. 315
- 2007, c. 6, s. 290
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: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.
- 1991, c. 47, s. 614
- 2007, c. 6, s. 291
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