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

Act current to 2022-05-02 and last amended on 2021-06-30. Previous Versions

PART VICorporate Governance (continued)

DIVISION XITrust Indentures (continued)

Marginal note:Compliance with trust indentures

  •  (1) An issuer or a guarantor of subordinated indebtedness issued or to be issued under a trust indenture shall, before undertaking

    • (a) the issue, certification and delivery of subordinated indebtedness under the trust indenture, or

    • (b) the satisfaction and discharge of the trust indenture,

    provide the trustee with evidence of compliance with the conditions in the trust indenture in respect thereof.

  • Marginal note:Compliance by issuer or guarantor

    (2) On the demand of a trustee, the issuer or guarantor of subordinated indebtedness issued or to be issued under a trust indenture shall provide the trustee with evidence of compliance with the conditions in the trust indenture by the issuer or guarantor in respect of any act to be done by the trustee at the request of the issuer or guarantor.

  • Marginal note:Evidence of compliance

    (3) The following documents constitute evidence of compliance for the purposes of subsections (1) and (2):

    • (a) a statutory declaration or certificate made by a director or an officer of the issuer or guarantor stating that the conditions referred to in subsections (1) and (2) have been complied with;

    • (b) an opinion of legal counsel that the conditions of the trust indenture requiring review by legal counsel have been complied with, if the trust indenture requires compliance with conditions that are subject to review by legal counsel; and

    • (c) an opinion or report of the auditors of the issuer or guarantor, or such other accountant as the trustee selects, that the conditions of the trust indenture have been complied with, if the trust indenture requires compliance with conditions that are subject to review by auditors.

  • Marginal note:Further evidence of compliance

    (4) The evidence of compliance referred to in subsection (3) shall include a statement by the person giving the evidence

    • (a) declaring that the person has read and understands the conditions of the trust indenture referred to in subsections (1) and (2);

    • (b) describing the nature and scope of the examination or investigation on which the person based the certificate, statement or opinion; and

    • (c) declaring that the person has made such examination or investigation as the person believes necessary to enable the statements to be made or the opinions contained or expressed therein to be given.

Marginal note:Trustee may require evidence

  •  (1) On the request of a trustee, the issuer or guarantor of subordinated indebtedness issued under a trust indenture shall provide the trustee with evidence in such form as the trustee requires of compliance with any condition thereof relating to any action required or permitted to be taken by the issuer or guarantor under the trust indenture.

  • Marginal note:Certificate of compliance

    (2) At least once in each twelve month period beginning on the date of the trust indenture and at any other time on the demand of a trustee, the issuer or guarantor of subordinated indebtedness issued under a trust indenture shall provide the trustee with a certificate stating that the issuer or guarantor has complied with all requirements contained in the trust indenture that, if not complied with, would, with the giving of notice, lapse of time or otherwise, constitute an event of default, or, if there has been failure to so comply, giving particulars thereof.

Marginal note:Notice of default

 A trustee shall, within thirty days after the trustee becomes aware of the occurrence thereof, give to the holders of subordinated indebtedness issued under a trust indenture notice of every event of default arising under the trust indenture and continuing at the time the notice is given, unless the trustee believes on reasonable grounds that it is in the best interests of the holders of the subordinated indebtedness to withhold the notice and so informs the issuer and guarantor in writing.

Marginal note:Duty of care

  •  (1) In exercising a trustee’s powers and discharging a trustee’s duties, the trustee shall

    • (a) act honestly and in good faith with a view to the best interests of the holders of the subordinated indebtedness issued under the trust indenture; and

    • (b) exercise the care, diligence and skill of a reasonably prudent trustee.

  • Marginal note:Reliance on statements

    (2) Notwithstanding subsection (1), a trustee is not liable if the trustee relies in good faith on statements contained in a statutory declaration, certificate, opinion or report that complies with this Act or the trust indenture.

Marginal note:No exculpation

 No term of a trust indenture or of any agreement between a trustee and the holders of subordinated indebtedness issued thereunder or between the trustee and the issuer or guarantor operates to relieve a trustee from the duties imposed on the trustee by sections 320, 324 and 327 and subsection 328(1).

DIVISION XIIFinancial Statements

Marginal note:Financial year

  •  (1) The financial year of a company ends, at the election of the company in its by-laws, on the expiration of the thirty-first day of October or the thirty-first day of December in each year.

  • Marginal note:First financial year

    (2) Where a company has, after the first day of July in any year, obtained an order approving the commencement and carrying on of business, the first financial year of the company ends, at the election of the company in its by-laws, on the expiration of the thirty-first day of October or the thirty-first day of December in the next calendar year.

Marginal note:Annual financial statement

  •  (1) The directors of a company shall place before the shareholders and policyholders at every annual meeting

    • (a) a comparative annual financial statement relating separately to

      • (i) the financial year immediately preceding the meeting, and

      • (ii) the financial year, if any, immediately preceding the financial year referred to in subparagraph (i);

    • (a.1) in the case of a company that has participating policyholders, the information prescribed in respect of the policies established under paragraphs 165(2)(e) and (e.1) and the other prescribed information;

    • (b) the report of the auditor of the company;

    • (c) the report of the actuary of the company;

    • (d) a description of the roles of the actuary of the company and the auditor of the company in the preparation and audit of the annual statement; and

    • (e) any further information respecting the financial position of the company and the results of its operations required by the by-laws of the company to be placed before the shareholders and policyholders at the annual meeting.

  • Marginal note:Annual statement — contents

    (2) With respect to each of the financial years to which it relates, the annual statement of a company must contain the prescribed statements and any information that is in the opinion of the directors necessary to present fairly, in accordance with the accounting principles referred to in subsection (4), the financial position of the company as at the end of the financial year to which it relates and the results of the operations and changes in the financial position of the company for that financial year.

  • Marginal note:Additional information

    (3) A company shall include with its annual statement

    • (a) in the case of a company that has participating policyholders, a summary of the policies established under paragraphs 165(2)(e) and (e.1);

    • (b) a list of the subsidiaries of the company, other than subsidiaries that are not required to be listed by the regulations and subsidiaries acquired pursuant to section 499 or pursuant to a realization of security in accordance with section 500 and which the company would not otherwise be permitted to hold, showing, with respect to each subsidiary,

      • (i) its name and the address of its head or principal office,

      • (ii) the book value of the aggregate of any shares of the subsidiary beneficially owned by the company and by other subsidiaries of the company, and

      • (iii) the percentage of the voting rights attached to all the outstanding voting shares of the subsidiary that is carried by the aggregate of any voting shares of the subsidiary beneficially owned by the company and by other subsidiaries of the company; and

    • (c) such other information as may be prescribed in such form as may be prescribed.

  • Marginal note:Accounting principles

    (4) The financial statements referred to in subsection (1), paragraph (3)(b) and subsection 333(1) shall, except as otherwise specified by the Superintendent, be prepared in accordance with generally accepted accounting principles, the primary source of which is the Handbook of the Chartered Professional Accountants of Canada. A reference in any provision of this Act to the accounting principles referred to in this subsection shall be construed as a reference to those generally accepted accounting principles with any specifications so made.

  • (5) [Repealed, 2005, c. 54, s. 284]

  • Marginal note:Regulations

    (6) The Governor in Council may make regulations respecting subsidiaries that are not required to be listed for the purposes of paragraph (3)(b).

  • 1991, c. 47, s. 331
  • 1997, c. 15, s. 233
  • 2001, c. 9, s. 398
  • 2005, c. 54, s. 284
  • 2017, c. 26, s. 62

Marginal note:Annual statement — approval

  •  (1) The directors of a company shall approve the annual statement and their approval shall be evidenced by the signature or a printed or otherwise mechanically reproduced facsimile of the signature of

    • (a) the chief executive officer or, in the event of that officer’s absence or inability to act, any other officer of the company authorized by the directors to sign in the stead of the chief executive officer; and

    • (b) one director, if the signature required by paragraph (a) is that of a director, or two directors if the signature required by that paragraph is that of an officer who is not a director.

  • Marginal note:Condition precedent to publication

    (2) A company shall not publish copies of an annual statement unless it is approved and signed in accordance with subsection (1).

  • 1991, c. 47, s. 332
  • 2005, c. 54, s. 285

Marginal note:Statements — subsidiaries

  •  (1) A company shall keep at its head office a copy of the current financial statements of each subsidiary of the company.

  • Marginal note:Examination

    (2) Subject to this section, the shareholders of a company, the policyholders of a company who are entitled to vote and their personal representatives may, on request therefor, examine the statements referred to in subsection (1) during the usual business hours of the company and may take extracts therefrom free of charge.

  • Marginal note:Barring examination

    (3) A company may refuse to permit an examination under subsection (2) by any person.

  • Marginal note:Application for order

    (4) Within fifteen days after a refusal under subsection (3), the company shall apply to a court for an order barring the right of the person concerned to make an examination under subsection (2) and the court shall either order the company to permit the examination or, if it is satisfied that the examination would be detrimental to the company or to any other body corporate the financial statements of which would be subject to examination, bar the right and make any further order it thinks fit.

  • Marginal note:Notice to Superintendent

    (5) A company shall give the Superintendent and the person seeking to examine the statements referred to in subsection (1) notice of an application to a court under subsection (4), and the Superintendent and the person may appear and be heard in person or by counsel at the hearing of the application.

Marginal note:Annual statement — distribution

  •  (1) A company shall, no later than 21 days before the date of each annual meeting or before the signing of a resolution under paragraph 158(1)(b) in lieu of the annual meeting and unless that time period is waived by the shareholder or policyholder, send

    • (a) to each shareholder a copy of the documents referred to in paragraphs 331(1)(a) and (b) to (e) and subsection 331(3) and, on request, the document referred to in paragraph 331(1)(a.1); and

    • (b) to each policyholder who is entitled under paragraph 143(1)(b) to receive notice of the meeting a copy of the documents referred to in subsections 331(1) and (3).

  • Marginal note:Exception

    (2) A company is not required to comply with subsection (1) with respect to shareholders or policyholders who have informed the company, in writing, that they do not wish to receive the annual statement.

  • Marginal note:Effect of default

    (3) Where a company is required to comply with subsection (1) and the company does not comply with that subsection, the annual meeting at which the annual statement is to be considered shall be adjourned until that subsection has been complied with.

  • 1991, c. 47, s. 334
  • 1997, c. 15, s. 234
  • 2005, c. 54, s. 286

Marginal note:Copy to Superintendent

  •  (1) Subject to subsection (2), a company shall send to the Superintendent a copy of the documents referred to in subsections 331(1) and (3) not later than twenty-one days before the date of each annual meeting of shareholders and policyholders of the company.

  • Marginal note:Later filing

    (2) If a company’s shareholders and policyholders sign a resolution under paragraph 158(1)(b) in lieu of an annual meeting, the company shall send a copy of the documents referred to in subsections 331(1) and (3) to the Superintendent not later than thirty days after the signing of the resolution.

  • 1991, c. 47, s. 335
  • 1997, c. 15, s. 235
  • 2001, c. 9, s. 399

DIVISION XIIIAuditors

Interpretation

Marginal note:Definitions

 In this Division,

firm of accountants

firm of accountants means a partnership, the members of which are accountants engaged in the practice of accounting, or a body corporate that is incorporated by or under an Act of the legislature of a province and engaged in the practice of accounting; (cabinet de comptables)

member

member, in relation to a firm of accountants, means

  • (a) an accountant who is a partner in a partnership, the members of which are accountants engaged in the practice of accounting, or

  • (b) an accountant who is an employee of a firm of accountants. (membre)

Appointment

Marginal note:Appointment of auditor

  •  (1) The shareholders and policyholders of a company shall, by ordinary resolution at the first meeting of shareholders and policyholders and at each succeeding annual meeting, appoint an auditor to hold office until the close of the next annual meeting.

  • Marginal note:Remuneration of auditor

    (2) The remuneration of an auditor may be fixed by ordinary resolution of the shareholders and policyholders but, if not so fixed, shall be fixed by the directors.

Qualifications

Marginal note:Qualification of auditor

  •  (1) A natural person or firm of accountants is qualified to be an auditor of a company if

    • (a) in the case of a natural person, the person is an accountant who

      • (i) is a member in good standing of an institute or association of accountants incorporated by or under an Act of the legislature of a province,

      • (ii) has at least five years experience at a senior level in performing audits of a financial institution,

      • (iii) is ordinarily resident in Canada, and

      • (iv) is independent of the company; and

    • (b) in the case of a firm of accountants, the member of the firm jointly designated by the firm and the company to conduct the audit of the company on behalf of the firm is qualified in accordance with paragraph (a).

  • Marginal note:Independence

    (2) For the purposes of subsection (1),

    • (a) independence is a question of fact; and

    • (b) a person is deemed not to be independent of a company if that person, a business partner of that person or a firm of accountants of which that person is a member

      • (i) is a business partner, director, officer or employee of the company or of any affiliate of the company or is a business partner of any director, officer or employee of the company or of any affiliate of the company,

      • (ii) beneficially owns or controls, directly or indirectly, a material interest in the shares of the company or of any affiliate of the company, or

      • (iii) has been a liquidator, trustee in bankruptcy, receiver or receiver and manager of any affiliate of the company within the two years immediately preceding the person’s proposed appointment as auditor of the company, other than an affiliate that is a subsidiary of the company acquired pursuant to section 499 or through a realization of security pursuant to section 500.

  • Marginal note:Business partners

    (2.1) For the purposes of subsection (2),

    • (a) in the case of the appointment of a natural person as the auditor of a company, a business partner of the person includes a shareholder of the business partner; and

    • (b) in the case of the appointment of a firm of accountants as the auditor of a company, a business partner of a member of the firm includes another member of the firm and a shareholder of the firm or of a business partner of the member.

  • Marginal note:Notice of designation

    (3) Within fifteen days after the appointment of a firm of accountants as auditor of a company, the company and the firm of accountants shall jointly designate a member of the firm who meets the qualifications described in subsection (1) to conduct the audit of the company on behalf of the firm and the company shall forthwith notify the Superintendent in writing of the designation.

  • Marginal note:New designation

    (4) Where for any reason a member of a firm of accountants designated pursuant to subsection (3) ceases to conduct the audit of the company, the company and the firm of accountants may jointly designate another member of the same firm of accountants who meets the qualifications described in subsection (1) to conduct the audit of the company and the company shall forthwith notify the Superintendent in writing of the designation.

  • Marginal note:Deemed vacancy

    (5) In any case where subsection (4) applies and a designation is not made pursuant to that subsection within thirty days after the designated member ceases to conduct the audit of the company, there shall be deemed to be a vacancy in the office of auditor of the company.

  • 1991, c. 47, s. 338
  • 2001, c. 9, s. 400
  • 2005, c. 54, s. 287
 
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