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Protection of Residential Mortgage or Hypothecary Insurance Act (S.C. 2011, c. 15, s. 20)

Act current to 2020-09-09 and last amended on 2016-06-22. Previous Versions

Approved Mortgage Insurers (continued)

Marginal note:Fees for risk exposure

 An approved mortgage insurer must, in accordance with the regulations, pay fees to the Receiver General to compensate Her Majesty for Her exposure to the risks arising from the provision of the mortgage or hypothecary insurance protection under this Act.

Marginal note:Designation of qualified mortgage lenders

  •  (1) An approved mortgage insurer may designate as a qualified mortgage lender for the purposes of this Act any mortgage or hypothecary lender that meets prescribed criteria.

  • Marginal note:Term of designation

    (2) The designation or its renewal are in effect for any period that the approved mortgage insurer specifies.

  • Marginal note:Cancellation of designation

    (3) The approved mortgage insurer may, by notice sent to a qualified mortgage lender that it has designated as such, cancel the qualified mortgage lender’s designation.

  • Marginal note:Effective date of cancellation

    (4) The notice must set out the effective date of the cancellation.

Marginal note:Insurance restricted

  •  (1) Except as permitted by the regulations, an approved mortgage insurer must not insure any risk unless the risk is in respect of an eligible mortgage loan made by a qualified mortgage lender that has been designated as such by the approved mortgage insurer.

  • Marginal note:Reinsurance restricted

    (2) Except as permitted by the regulations, an approved mortgage insurer must not cause itself to be reinsured against any risk that it has undertaken under its policies or reinsure any risk that another insurer has undertaken under that insurer’s contracts of insurance.

Marginal note:Subsidiaries

  •  (1) An approved mortgage insurer must obtain the Minister’s approval before establishing or acquiring a subsidiary as defined in subsection 2(1) of the Insurance Companies Act.

  • Marginal note:Conditions and undertakings

    (2) An approved mortgage insurer must meet any conditions imposed by the Minister and satisfy any undertakings required by him or her in respect of its business activities with any of its subsidiaries.

Marginal note:Conditions and undertakings — business with affiliates, etc.

  •  (1) The Minister may impose conditions on and require undertakings from an approved mortgage insurer in respect of its business activities with a person or entity that is

    • (a) an affiliate, as defined in subsection 2(1) of the Insurance Companies Act, of the approved mortgage insurer;

    • (b) a related party, within the meaning of section 518 of that Act, of the approved mortgage insurer; or

    • (c) in a prescribed relationship with the approved mortgage insurer.

  • Marginal note:Conditions and undertakings — increased risks

    (2) The Minister may also impose conditions on and require undertakings from an approved mortgage insurer if the Minister is of the opinion that the activities of a person or entity referred to in subsection (1) could materially increase the risks to Her Majesty that arise from the provision of mortgage or hypothecary insurance protection under this Act.

  • Marginal note:Obligation of approved mortgage insurer

    (3) An approved mortgage insurer must meet any conditions imposed on it and satisfy any undertakings required from it under subsection (1) or (2).

Marginal note:Prohibited policies — affiliates, etc.

 Except as permitted by the regulations, an approved mortgage insurer must not be a party to a policy under which the beneficiary is a person or entity referred to in subsection 13(1).

Marginal note:Obligation to retain information, books and records

  •  (1) An approved mortgage insurer must keep and retain books and records and retain information in respect of its business that are relevant for the purposes of this Act or that are prescribed.

  • Marginal note:Obligation to provide information or copies

    (2) At the request of the Minister or the Superintendent, an approved mortgage insurer must, without delay, provide the requester with any information or copies of any books or records that the approved mortgage insurer is required to retain.

  • Marginal note:Disclosure of information

    (3) The Minister and the Superintendent may disclose to each other any information or copies of any books or records received under subsection (2) and may also disclose them to the Governor of the Bank of Canada, the Chief Executive Officer of the Canada Deposit Insurance Corporation and the Commissioner of the Financial Consumer Agency of Canada.

  • Marginal note:Disclosure of conditions and undertakings

    (4) The Minister may disclose to the Superintendent any conditions imposed by the Minister and any undertakings required by him or her under this Act.

  • Marginal note:Public information

    (5) An approved mortgage insurer must make available to the public prescribed books, records and information.

  • 2011, c. 15, s. 20 “15”
  • 2016, c. 7, s. 179

Mortgage or Hypothecary Insurance Protection

Marginal note:Minister’s obligations

  •  (1) Subsections (2) to (4) apply if

    • (a) a winding-up order is made in respect of a corporation that had, before the making of the order, issued a policy to a qualified mortgage lender in respect of an eligible mortgage loan;

    • (b) the policyholder or a beneficiary under the policy has made a claim to the liquidator that is related to the policy; and

    • (c) the liquidator has allowed the claim and determined that it will not be paid in whole.

  • Marginal note:Event has occurred

    (2) If an event that is insured against under the policy has occurred before the conditions set out in subsection (1) are met, the Minister must make a payment out of the Consolidated Revenue Fund to the beneficiary under the policy in an amount equal to the amount calculated in accordance with section 22.

  • Marginal note:Event has not occurred

    (3) If an event that is insured against under the policy has not occurred before the conditions set out in subsection (1) are met, the Minister must elect to either

    • (a) make a payment out of the Consolidated Revenue Fund to an approved mortgage insurer or the Canada Mortgage and Housing Corporation, with the payee’s consent, in an amount sufficient to allow the payee to enter into, with the policyholder, a contract of insurance that replaces the policy in accordance with subsection 23(1), or

    • (b) satisfy, as required by subsection 24(1), future claims arising from the occurrence, if any, of such an event.

  • Marginal note:Other election

    (4) If the Minister makes an election under paragraph (3)(a), no further election is to be made, but the making of an election under paragraph (3)(b) does not preclude the making of an election under paragraph (3)(a).

Marginal note:Minister’s discretion

  •  (1) Subsections (2) and (3) apply if a winding-up order is made in respect of a corporation that had, before the making of the order, issued a policy to a qualified mortgage lender in respect of an eligible mortgage loan.

  • Marginal note:Event has occurred

    (2) If an event that is insured against under the policy has occurred before the condition set out in subsection (1) is met, the Minister may make a payment referred to in subsection 16(2).

  • Marginal note:Event has not occurred

    (3) If an event that is insured against under the policy has not occurred before the condition set out in subsection (1) is met, the Minister may make a payment referred to in paragraph 16(3)(a) or satisfy future claims referred to in paragraph 16(3)(b).

Marginal note:Ineligible mortgage loan

 A contract of insurance entered into by an approved mortgage insurer and a qualified mortgage lender — that has been designated as such by the approved mortgage insurer — in respect of a mortgage or hypothecary loan that is not an eligible mortgage loan is deemed, for the purposes of sections 16, 17 and 20 to 25 to be a policy in respect of an eligible mortgage loan if the Minister is satisfied that the approved mortgage insurer and the qualified mortgage lender believed the loan to be an eligible mortgage loan and that the ineligibility of the loan was not due to negligence or bad faith by either of them.

Marginal note:Pre-existing contracts

 If a winding-up order is made in respect of a company, a contract of insurance that the company entered into before the coming into force of this Act is deemed, in respect of a mortgage or hypothecary loan that is the subject of the contract of insurance, to be a policy issued to a qualified mortgage lender in respect of an eligible mortgage loan for the purposes of sections 16, 17 and 20 to 25, if

  • (a) Her Majesty would have been bound to make a payment in respect of the contract of insurance had section 44 not come into force; and

  • (b) the mortgage or hypothecary loan meets the criteria established by regulations made under subsection 42(1) that relate to a guarantee of payment referred to in subsection 14(1) of the National Housing Act.

  • 2011, c. 15, s. 20 “19”
  • 2014, c. 20, s. 314
 
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