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

Marginal note:Due diligence

392 A liquidator is not liable if they exercised the care, diligence and skill that a reasonably prudent person would have exercised in comparable circumstances, including reliance in good faith on

• (a) financial statements of the company represented to the liquidator by an officer of the company or in a written report of the auditor of the company fairly to reflect the financial condition of the company; or

• (b) a report of a person whose profession lends credibility to a statement made by them.

Marginal note:Examination of others

• 393 (1) Where a liquidator has reason to believe that any property of the company is in the possession or under the control of a person or that a person has concealed, withheld or misappropriated any such property, the liquidator may apply to the court for an order requiring that person to appear before the court at the time and place designated in the order and to be examined.

• Marginal note:Restoration and compensation

  (2) Where an examination conducted pursuant to subsection (1) discloses that a person has concealed, withheld or misappropriated any property of the company, the court may order that person to restore the property or pay compensation to the liquidator.

Marginal note:Costs of liquidation

394 A liquidator shall pay the costs of liquidation out of the property of the company and shall pay or make adequate provision for all claims against the company.

Marginal note:Final accounts

• 395 (1) Within one year after the appointment of a liquidator and after paying or making adequate provision for all claims against the company, the liquidator shall apply to the court

  • (a) for approval of the final accounts of the liquidator and for an order permitting the distribution, in money or in kind, of the remaining property of the company to its shareholders, if any, or to the incorporators, according to their respective rights; or

  • (b) for an extension of time, setting out the reasons therefor.

• Marginal note:Shareholder application

  (2) If a liquidator fails to make the application required by subsection (1), a shareholder of the company or, if there are no shareholders of the company, an incorporator may apply to the court for an order for the liquidator to show cause why a final accounting and distribution should not be made.

• Marginal note:Notification of final accounts

  (3) A liquidator shall give notice of the liquidator’s intention to make an application under subsection (1) to the Superintendent, to each inspector appointed under section 387, to each shareholder of the company or, if there are no shareholders, to each incorporator and to any person who provided a security or fidelity bond for the liquidation.

• Marginal note:Publication

  (4) The liquidator shall publish the notice required under subsection (3) in the Canada Gazette and once a week for two consecutive weeks in one or more newspapers in general circulation in each province in which the company has transacted any business within the preceding twelve months or as otherwise directed by the court.

Marginal note:Final order

• 396 (1) If the court approves the final accounts rendered by a liquidator, the court shall make an order

  • (a) directing the company to apply to the Minister for letters patent dissolving the company;

  • (b) directing the custody or disposal of the documents, records and registers of the company; and

  • (c) discharging the liquidator except in respect of the duty of a liquidator under subsection (2).

• Marginal note:Delivery of order

  (2) The liquidator shall forthwith send a certified copy of the order referred to in subsection (1) to the Superintendent.

Marginal note:Right to distribution of money

• 397 (1) If in the course of the liquidation of a company the shareholders resolve to, or the liquidator proposes to,

  • (a) exchange all or substantially all of the remaining property of the company for securities of another entity that are to be distributed to the shareholders or to the incorporators, or

  • (b) distribute all or part of the remaining property of the company to the shareholders or to the incorporators in kind,

  a shareholder or incorporator may apply to the court for an order requiring the distribution of the remaining property of the company to be in money.

• Marginal note:Powers of court

  (2) On an application under subsection (1), the court may order

  • (a) all of the remaining property of the company to be converted into and distributed in money; or

  • (b) the claim of any shareholder or incorporator applying under this section to be satisfied by a distribution in money.

• Marginal note:Order by court

  (3) Where an order is made by a court under paragraph (2)(b), the court

  • (a) shall fix a fair value on the share of the property of the company attributable to the shareholder or incorporator;

  • (b) may in its discretion appoint one or more appraisers to assist the court in fixing a fair value in accordance with paragraph (a); and

  • (c) shall render a final order against the company in favour of the shareholder or incorporator for the amount of the share of the property of the company attributable to the shareholder or incorporator.

Marginal note:Dissolution by letters patent

• 398 (1) On an application made pursuant to an order under paragraph 396(1)(a), the Minister may issue letters patent dissolving the company.

• Marginal note:Company dissolved

  (2) A company in respect of which letters patent are issued under subsection (1) is dissolved and ceases to exist on the date of the issuance of the letters patent.

General

Definition of shareholder and incorporator

399 In sections 401 and 402, shareholder and incorporator include the heirs and personal representatives of a shareholder or incorporator.

Marginal note:Continuation of actions

• 400 (1) Notwithstanding the dissolution of a company under this Part,

  • (a) a civil, criminal or administrative action or proceeding commenced by or against the company before its dissolution may be continued as if the company had not been dissolved;

  • (b) a civil, criminal or administrative action or proceeding may be brought against the company within two years after its dissolution as if the company had not been dissolved; and

  • (c) any property that would have been available to satisfy any judgment or order if the company had not been dissolved remains available for that purpose.

• Marginal note:Service on company

  (2) Service of a document on a company after its dissolution may be effected by serving the document on a person shown as a director in the incorporating instrument of the company or, if applicable, in the latest return sent to the Superintendent under section 668.

Marginal note:Limitations on liability

• 401 (1) Notwithstanding the dissolution of a company, a shareholder or incorporator to whom any of its property has been distributed is liable to any person claiming under subsection 400(1) to the extent of the amount received by that shareholder or incorporator on the distribution.

• Marginal note:Limitation

  (2) An action to enforce liability under subsection (1) may not be commenced except within two years after the date of the dissolution of the company.

• Marginal note:Action against class

  (3) A court may order an action referred to in subsections (1) and (2) to be brought against the persons who were shareholders or incorporators as a class, subject to such conditions as the court thinks fit.

• Marginal note:Reference

  (4) If the plaintiff establishes a claim in an action under subsection (3), the court may refer the proceedings to a referee or other officer of the court who may

  • (a) add as a party to the proceedings each person found by the plaintiff to have been a shareholder or incorporator;

  • (b) determine, subject to subsection (1), the amount that each person who was a shareholder or incorporator must contribute towards satisfaction of the plaintiff’s claim; and

  • (c) direct payment of the amounts so determined.

Marginal note:Where creditor cannot be found

402 Where a creditor, shareholder or incorporator to whom property is to be distributed on the dissolution of a company cannot be found, the portion of the property to be distributed to that creditor, shareholder or incorporator shall be converted into money and paid in accordance with section 404.

Marginal note:Vesting in Crown

403 Subject to subsection 400(1) and sections 404 and 405, property of a company that has not been disposed of at the date of the dissolution of the company vests in Her Majesty in right of Canada.

Marginal note:Unclaimed money on winding-up

• 404 (1) Where the business of a company is being wound up under this Division, the liquidator or the company shall pay to the Minister on demand and in any event before the final winding-up of that business any amount that is payable by the liquidator or the company to a creditor, shareholder or incorporator of the company to whom payment thereof has not, for any reason, been made.

• Marginal note:Records

  (2) Where a liquidator or a company makes a payment to the Minister under subsection (1) with respect to a creditor, shareholder or incorporator, the liquidator or company shall concurrently forward to the Minister all documents, records and registers in the possession of the liquidator or company that relate to the entitlement of the creditor, shareholder or incorporator.

• Marginal note:Payment to Receiver General

  (3) The Minister shall pay to the Receiver General all amounts paid to the Minister under subsection (1).

• Marginal note:Liquidator and company discharged

  (4) Payment by a liquidator or a company to the Minister under subsection (1) discharges the liquidator and the company in respect of which the payment is made from all liability for the amount so paid, and payment by the Minister to the Receiver General under subsection (3) discharges the Minister from all liability for the amount so paid.

Marginal note:Recovery

405 If at any time a person establishes an entitlement to any moneys paid to the Receiver General under this Division, the Receiver General shall pay an equivalent amount to that person out of the Consolidated Revenue Fund.

Marginal note:Custody of records after dissolution

406 A person who has been granted custody of the documents, records and registers of a dissolved company shall keep them available for production for six years following the date of the dissolution of the company or until the expiration of such shorter period as may be ordered by the court when it orders the dissolution.

PART VIIOwnership

DIVISION IInterpretation

Marginal note:Definitions

406.1 The following definitions apply in this Part.

agent

agent means

• (a) in relation to Her Majesty in right of Canada or of a province, any agent of Her Majesty in either of those rights, and includes a municipal or public body empowered to perform a function of government in Canada or any entity empowered to perform a function or duty on behalf of Her Majesty in either of those rights but does not include

  • (i) an official or entity performing a function or duty in connection with the administration or management of the estate or property of a natural person,

  • (ii) an official or entity performing a function or duty in connection with the administration, management or investment of a fund established to provide compensation, hospitalization, medical care, annuities, pensions or similar benefits to natural persons, or moneys derived from such a fund, or

  • (iii) the trustee of any trust for the administration of a fund to which Her Majesty in either of those rights contributes and of which an official or entity that is an agent of Her Majesty in either of those rights is a trustee; and

• (b) in relation to the government of a foreign country or any political subdivision thereof, a person empowered to perform a function or duty on behalf of the government of the foreign country or political subdivision, other than a function or duty in connection with the administration or management of the estate or property of a natural person. (mandataire)

eligible agent

eligible agent means an agent or agency of Her Majesty in right of Canada or of a province or an agent or agency of a government of a foreign country or any political subdivision of a foreign country

• (a) whose mandate is publicly available;

• (b) that controls the assets of an investment fund in a manner intended to maximize long-term risk-adjusted returns and that fund is

  • (i) one to which, as the case may be, Her Majesty in right of Canada or of a province or the government of a foreign country or political subdivision contributes, or

  • (ii) established to provide compensation, hospitalization, medical care, annuities, pensions or similar benefits to natural persons; and

• (c) whose decisions with respect to the assets of the fund referred to in paragraph (b) are not influenced in any significant way by, as the case may be, Her Majesty in right of Canada or of the province or the government of the foreign country or the political subdivision. (mandataire admissible)

Marginal note:Associates

• 406.2 (1) For the purpose of determining ownership of a company by an eligible agent, where two persons, at least one of whom is an eligible agent, are associated with each other, those persons are deemed to be a single eligible agent who beneficially owns the aggregate number of shares of the company beneficially owned by them.

• Marginal note:Associates

  (2) For the purposes of subsection (1), a person is associated with another person if

  • (a) each person is an agent or agency of Her Majesty in right of Canada;

  • (b) each person is an agent or agency of Her Majesty in right of the same province;

  • (c) each person is an agent or agency of a government of the same foreign country or a political subdivision of the same foreign country;

  • (d) one person is Her Majesty in right of Canada and the other person is an agent or agency of Her Majesty in that right;

  • (e) one person is Her Majesty in right of a province and the other person is an agent or agency of Her Majesty in right of that province; or

  • (f) one person is a government of a foreign country or any political subdivision of a foreign country and the other person is its agent or agency.

DIVISION IIConstraints on Ownership

Marginal note:Constraining acquisition

• 407 (1) No person, or entity controlled by a person, shall, without the approval of the Minister, purchase or otherwise acquire any share of a company or purchase or otherwise acquire control of any entity that holds any share of a company if

  • (a) the acquisition would cause the person to have a significant interest in any class of shares of the company; or

  • (b) where the person has a significant interest in a class of shares of the company, the acquisition would increase the significant interest of the person in that class of shares.

• Marginal note:Amalgamation, etc., constitutes acquisition

  (2) If the entity that would result from an amalgamation, a merger or a reorganization would have a significant interest in a class of shares of a company, the entity is deemed to be acquiring a significant interest in that class of shares of the company through an acquisition for which the approval of the Minister is required under subsection (1).

• Marginal note:Exemption

  (3) On application by a company, other than a converted company in respect of which subsection (4) or (11) applies or a company to which subsection (5) or (12) applies, the Superintendent may exempt from the application of subsection (1) and section 408 any class of non-voting shares of the company if

  • (a) the aggregate book value of the shares of the class is not more than 30 per cent of the aggregate book value of all the outstanding shares of the company; or

  • (b) in the case of a mutual company, the aggregate book value of the shares of the class is not more than 30 per cent of the aggregate book value of all the outstanding shares of the company and the surplus of the company.

• Marginal note:Limitations on share holdings

  (4) Despite subsection (1), no person may be a major shareholder of a converted company having an aggregate of surplus and minority interests of five billion dollars or more according to its last annual statement dated before the effective date of the letters patent of conversion of the converted company.

• Marginal note:Exception

  (5) Subsection (4) does not apply to a widely held company that controls, within the meaning of paragraph 3(1)(d), a converted company if it

  • (a) controlled the converted company on the day on which the letters patent of conversion that gave effect to the conversion of the converted company became effective and it has continued to control, within the meaning of that paragraph, the converted company since that day; or

  • (b) acquired control, within the meaning of that paragraph, of the converted company under section 28.1 or 28.2 and it has continued to control, within the meaning of that paragraph, the converted company since the day it acquired control.

• Marginal note:Exception — widely held insurance holding company

  (6) Subsection (4) does not apply to a widely held insurance holding company that controls, within the meaning of paragraph 3(1)(d), the converted company if

  • (a) the insurance holding company acquired control, within the meaning of that paragraph, of the converted company or of the company to which subsection (5) applies, as the case may be, under section 714 or 715 and the insurance holding company has continued to control, within the meaning of that paragraph, the converted company since the day the insurance holding company acquired control; or

  • (b) the converted company was a subsidiary of the company to which subsection (5) applies that was continued under section 721 as the insurance holding company and the insurance holding company has continued to control, within the meaning of paragraph 3(1)(d), the converted company since the day it came into existence as an insurance holding company.

• Marginal note:Exception — other entities

  (7) Subsection (4) does not apply to an entity that controls, within the meaning of paragraph 3(1)(d), the converted company if the entity is controlled, within the meaning of paragraph 3(1)(d), by a company to which subsection (5) applies, or by an insurance holding company to which subsection (6) applies, that is permitted under that subsection to be a major shareholder of the converted company.

• Marginal note:Exception

  (8) The Minister may, at any time after the day that is two years after December 31, 1999, by order, determine that subsection (4) no longer applies in respect of any particular company.

• Marginal note:Limitation on share holdings

  (9) Despite subsection (1), no person may be a major shareholder of a company to which subsection (5) applies.

• Marginal note:Exception

  (10) Subsection (9) does not apply to a widely held insurance holding company that controls, within the meaning of paragraph 3(1)(d), a company to which subsection (5) applies if the insurance holding company acquired control, within the meaning of that paragraph, of the company under section 714 or 715 and the insurance holding company has continued to control, within the meaning of that paragraph, the company since the day the insurance holding company acquired control.

• Marginal note:Limitations on share holdings

  (11) Despite subsection (1), until a day that is two years after December 31, 1999, no person may have a significant interest in any class of shares of a converted company having an aggregate of surplus and minority interests in an amount that is one billion dollars or more but less than five billion dollars, according to its last annual statement dated before the effective date of the letters patent of conversion of the converted company.

• Marginal note:Exception

  (12) Subsection (11) does not apply to a company if no person has a significant interest in any class of shares of the company and the company controls, within the meaning of paragraph 3(1)(d), the converted company if it

  • (a) controlled the converted company on the day on which the letters patent of conversion that gave effect to the conversion of the converted company became effective and it has continued to control, within the meaning of that paragraph, the converted company since that day; or

  • (b) acquired control, within the meaning of that paragraph, of the converted company under section 28.1 or 28.2 and it has continued to control, within the meaning of that paragraph, the converted company since the day it acquired control.

• Marginal note:Exception — insurance holding company

  (13) Subsection (11) does not apply to an insurance holding company if no person has a significant interest in any class of shares of the insurance holding company and the insurance holding company controls, within the meaning of paragraph 3(1)(d), the converted company if

  • (a) the insurance holding company acquired control, within the meaning of that paragraph, of the converted company or of the company to which subsection (12) applies, as the case may be, under section 714 or 715 and the insurance holding company has continued to control, within the meaning of that paragraph, the converted company since the day the insurance holding company acquired control; or

  • (b) the converted company was a subsidiary of the company to which subsection (12) applies that was continued under section 721 as the insurance holding company and the insurance holding company has continued to control, within the meaning of that paragraph, the converted company since the day it came into existence as an insurance holding company.

• Marginal note:Exception — other entities

  (14) Subsection (11) does not apply to an entity that controls, within the meaning of paragraph 3(1)(d), the converted company if the entity is controlled, within the meaning of that paragraph, by a company to which subsection (12) applies, or by an insurance holding company to which subsection (13) applies, that is permitted under that subsection to have a significant interest in any class of shares of the converted company.

• Marginal note:Limitation on share holdings

  (15) Despite subsection (1), no person may have a significant interest in any class of shares of a company to which subsection (12) applies.

• Marginal note:Exception

  (16) Subsection (15) does not apply to an insurance holding company that controls, within the meaning of paragraph 3(1)(d), a company to which subsection (12) applies if

  • (a) no person has a significant interest in any class of shares of the insurance holding company; and

  • (b) the insurance holding company acquired control, within the meaning of that paragraph, under section 714 or 715 of the company to which subsection (12) applies and the insurance holding company has continued to control, within the meaning of that paragraph, the company since the day the insurance holding company acquired control.

• Marginal note:Deeming

  (17) For the purposes of this Act, if the Minister makes an order under subsection (8) to the effect that subsection (4) no longer applies in respect of a particular company,

  • (a) the particular company is deemed, as of the effective date of the order, to no longer be a company in respect of which subsection (4) applies;

  • (b) a widely held company that controls, within the meaning of paragraph 3(1)(d), the particular company in the circumstances referred to in subsection (5) is deemed, as of the effective date of the order, to no longer be a company to which subsection (5) applies; and

  • (c) a widely held insurance holding company that controls, within the meaning of paragraph 3(1)(d), the particular company in the circumstances referred to in subsection (6) is deemed, as of the effective date of the order, to no longer be an insurance holding company to which subsection (6) applies.

• Marginal note:Deeming

  (18) For the purposes of this Act, after the day that is two years after December 31, 1999,

  • (a) a converted company having an aggregate of surplus and minority interests in an amount that is one billion dollars or more but less than five billion dollars, according to its last annual statement dated before the effective date of the letters patent of conversion of the converted company is deemed to no longer be a company in respect of which subsection (11) applies;

  • (b) a company that controls, within the meaning of paragraph 3(1)(d), a converted company referred to in paragraph (a) in the circumstances referred to in subsection (12) is deemed to no longer be a company to which subsection (12) applies; and

  • (c) an insurance holding company that controls, within the meaning of paragraph 3(1)(d), a converted company referred to in paragraph (a) in the circumstances referred to in subsection (13) is deemed to no longer be an insurance holding company to which subsection (13) applies.