Insurance Companies Act

Marginal note:Superintendent may take control

• 679 (1) Subject to this Act, where any of the circumstances described in subsection (1.1) exist in respect of a company, society or provincial company or any of the circumstances described in subsection (1.2) exist in respect of a foreign company, the Superintendent may

  • (a) take control, for a period not exceeding sixteen days, of the assets of the company, society or provincial company and the assets under its administration or, in the case of a foreign company, of its assets in Canada together with its other assets held in Canada under control of its chief agent, including all amounts received or receivable in respect of its insurance business in Canada; or

  • (b) unless the Minister advises the Superintendent that the Minister is of the opinion that it is not in the public interest to do so,

    • (i) take control, for a period exceeding sixteen days, of the assets of the company, society or provincial company and the assets under its administration or, in the case of a foreign company, of its assets in Canada together with its other assets held in Canada under the control of its chief agent, including all amounts received or receivable in respect of its insurance business in Canada,

    • (ii) where control of assets has been taken under paragraph (a), continue the control beyond the sixteen days referred to in that paragraph, or

    • (iii) take control of the company, society or provincial company.

• Marginal note:Circumstances re other than foreign company

  (1.1) Control by the Superintendent under subsection (1) may be taken in respect of a company, society or provincial company, other than a foreign company, where

  • (a) the company, society or provincial company has failed to pay its liabilities or, in the opinion of the Superintendent, will not be able to pay its liabilities as they become due and payable;

  • (b) [Repealed, 2001, c. 9, s. 463]

  • (c) the assets of the company, society or provincial company are not, in the opinion of the Superintendent, sufficient to give adequate protection to its policyholders and creditors;

  • (d) any asset appearing on the books or records of the company, society or provincial company or held under its administration is not, in the opinion of the Superintendent, satisfactorily accounted for;

  • (e) the regulatory capital of the company, society or provincial company has, in the opinion of the Superintendent, reached a level or is eroding in a manner that may detrimentally affect its policyholders or creditors;

  • (f) the company, society or provincial company has failed to comply with an order of the Superintendent made under subsection 515(3) to increase its capital or with an order of the Superintendent made under subsection 678.5(1); or

  • (g) in the opinion of the Superintendent, any other state of affairs exists in respect of the company, society or provincial company that may be materially prejudicial to the interests of the company’s, society’s or provincial company’s policyholders or creditors or the owners of any assets under the company’s, society’s or provincial company’s administration, including where proceedings under a law relating to bankruptcy or insolvency have been commenced in Canada or elsewhere in respect of the holding body corporate of the company or provincial company.

• Marginal note:Circumstances re foreign company

  (1.2) Control by the Superintendent under subsection (1) may be taken in respect of a foreign company where

  • (a) in respect of its insurance business in Canada, it has failed to pay its liabilities or, in the opinion of the Superintendent, will not be able to pay its liabilities as they become due and payable;

  • (b) [Repealed, 2001, c. 9, s. 463]

  • (c) its assets in Canada are not, in the opinion of the Superintendent, sufficient to give adequate protection to its policyholders and creditors in respect of its insurance business in Canada;

  • (d) any asset relating to its insurance business in Canada appearing on the books or records of the foreign company is not, in the opinion of the Superintendent, satisfactorily accounted for;

  • (e) it has failed to comply with an order of the Superintendent made under subsection 608(4) to increase the margin of its assets in Canada over its liabilities in Canada or with an order of the Superintendent made under subsection 609(2) or 678.6(1); or

  • (f) in the opinion of the Superintendent, any other state of affairs exists in respect of the foreign company that may be materially prejudicial to the interests of the foreign company’s policyholders or creditors in respect of its insurance business in Canada, or to the interests of the owners of any assets under the foreign company’s administration in Canada, including where proceedings under a law relating to bankruptcy or insolvency have been commenced in Canada or elsewhere in respect of the foreign company or its holding body corporate.

• Marginal note:Notice of proposed action

  (1.3) The Superintendent must notify a company, society, provincial company or foreign company of any action proposed to be taken in respect of it under paragraph (1)(b) and of its right to make written representations to the Superintendent within the time specified in the notice, not exceeding ten days after it receives the notice.

• Marginal note:Objectives of Superintendent

  (2) If the Superintendent has, under subsection (1), control of the assets of a company, society, provincial company or foreign company referred to in that subsection, the Superintendent may do all things necessary or expedient to protect the rights and interests of the policyholders and creditors of the company, society or provincial company or the policyholders and creditors in respect of the foreign company’s insurance business in Canada.

• Marginal note:Powers of Superintendent

  (3) Where the Superintendent has, pursuant to subsection (1), control of the assets of a company, society, provincial company or foreign company referred to in that subsection,

  • (a) the company, society, provincial company or foreign company shall not make, acquire or transfer any loan or make any purchase, sale or exchange of securities or any disbursement or transfer of cash of any kind without the prior approval of the Superintendent or a representative designated by the Superintendent; and

  • (b) no director, officer or employee of the company, society, provincial company or foreign company nor the chief agent of the foreign company shall have access to any cash or securities held by the company, society, provincial company or foreign company unless

    • (i) a representative of the Superintendent accompanies the director, officer or employee or the chief agent, or

    • (ii) the access is previously authorized by the Superintendent or the Superintendent’s representative.