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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 XVRegulation of Companies, Societies, Foreign Companies and Provincial Companies — Superintendent (continued)

Remedial Powers (continued)

Supervisory Intervention (continued)

Marginal note:Direction to transfer policies or to reinsure risks — foreign fraternal benefit society

  •  (1) If the circumstances described in any of paragraphs 679(1.2)(a) to (d) or (f) exist in respect of a foreign fraternal benefit society, the Superintendent may, by order, subject to any terms and conditions the Superintendent may specify, direct it to transfer all or any portion of its policies in respect of its insurance business in Canada to, or cause itself to be reinsured, against all or any portion of the risks undertaken under those policies, by any company, society, foreign company or body corporate incorporated or formed by or under the laws of a province that is authorized to transact the classes of insurance to be so transferred or reinsured.

  • Marginal note:Compliance

    (2) The foreign company shall comply with the order within the time that the Superintendent specifies in the order or within any further period specified by the Superintendent.

  • Marginal note:Opportunity for representations

    (3) No order shall be issued to a foreign company under subsection (1) unless the foreign company is provided with a reasonable opportunity to make representations in respect of the matter.

  • 2001, c. 9, s. 462
  • 2007, c. 6, s. 305

Marginal note:Superintendent may take control

  •  (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.

  • 1991, c. 47, s. 679
  • 1996, c. 6, s. 96
  • 1997, c. 15, s. 326
  • 2001, c. 9, s. 463
  • 2007, c. 6, s. 306

 [Repealed, 1996, c. 6, s. 96]

Marginal note:Powers of directors and officers suspended

  •  (1) Where the Superintendent takes control of a company, society or provincial company pursuant to subparagraph 679(1)(b)(iii), the powers, duties, functions, rights and privileges of the directors of the company, society or provincial company and of the officers of the company, society or provincial company responsible for its management are suspended.

  • Marginal note:Superintendent to manage company

    (2) Where the Superintendent takes control of a company, society or provincial company pursuant to subparagraph 679(1)(b)(iii), the Superintendent shall manage the business and affairs of the company, society or provincial company and in so doing the Superintendent

    • (a) may perform any of the duties and functions that the persons referred to in subsection (1) were performing prior to the taking of control; and

    • (b) has and may exercise any power, right or privilege that any such person had or could have exercised prior to the taking of control.

  • Marginal note:Persons to assist

    (3) Where the Superintendent takes control of a company, society or provincial company pursuant to subparagraph 679(1)(b)(iii), or of the assets of a foreign company pursuant to subparagraph 679(1)(b)(i) or (ii), the Superintendent may appoint one or more persons to assist in the management of the company, society or provincial company or of the insurance business in Canada of the foreign company.

  • 1991, c. 47, s. 683
  • 1996, c. 6, s. 97

Marginal note:Expiration of control

 Control by the Superintendent under subsection 679(1) of a company, society or provincial company or of the assets of a company, society or provincial company or of the assets in Canada of a foreign company 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 expires on the day on which a notice by the Superintendent is sent to

  • (a) the directors and officers who conducted the business and affairs of the company, society or provincial company, or

  • (b) the chief agent in Canada of the foreign company,

stating that the Superintendent is of the opinion that the circumstances leading to the taking of control by the Superintendent have been substantially rectified and that the company, society or provincial company or the foreign company, as the case may be, can resume control of its business and affairs, assets or its insurance business in Canada, as the case may be.

  • 1991, c. 47, s. 684
  • 1996, c. 6, s. 97

Marginal note:Superintendent may request winding-up

 The Superintendent may, at any time before the receipt of a request under section 685 to relinquish control of a company, society or provincial company or of the assets of a company, society or provincial company or of the assets in Canada of a foreign company 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, request the Attorney General of Canada to apply for a winding-up order under section 10.1 of the Winding-up and Restructuring Act in respect of

  • (a) the company, society or provincial company, where the assets of the company, society or provincial company are under the control of the Superintendent pursuant to subparagraph 679(1)(b)(i) or (ii);

  • (b) the insurance business in Canada of the foreign company, where the assets in Canada of the foreign company together with its other assets referred to in subparagraph 679(1)(b)(i) or (ii) are under the control of the Superintendent pursuant to that subparagraph; or

  • (c) the company, society or provincial company, where it is under the control of the Superintendent pursuant to subparagraph 679(1)(b)(iii).

  • 1996, c. 6, s. 97

Marginal note:Requirement to relinquish control

 Where no action has been taken by the Superintendent under section 684.1 and, after thirty days following the taking of control by the Superintendent under subsection 679(1) of a company, society or provincial company or of the assets of a company, society or provincial company or of the assets in Canada of a foreign company 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, the Superintendent receives from the board of directors of the company, society or provincial company or, in case of a foreign company, its chief agent, a notice in writing requesting the Superintendent to relinquish control, the Superintendent must, not later than twelve days after receipt of the notice,

  • (a) comply with the request; or

  • (b) request the Attorney General of Canada to apply for a winding-up order under section 10.1 of the Winding-up and Restructuring Act in respect of the company, society or provincial company or the insurance business in Canada of the foreign company.

  • 1991, c. 47, s. 685
  • 1996, c. 6, s. 97

Special Assessments of Companies, Societies, Foreign Companies and Provincial Companies

Marginal note:Superintendent to ascertain amounts

  •  (1) The Superintendent shall, before December 31 in each year,

    • (a) ascertain the total amount of expenses incurred during the immediately preceding fiscal year in

      • (i) exercising control of a company, society or provincial company,

      • (ii) exercising control of the assets of a foreign company pursuant to subparagraph 679(1)(b)(i) or (ii),

      • (iii) carrying out as liquidator the winding-up of a company, society or provincial company or of the insurance business in Canada of a foreign company,

      including amounts paid as interest charges on money borrowed by or on behalf of the company, society or provincial company to meet its requirements for liquid funds or as the cost of terminating leases or employment contracts or other similar expenses; and

    • (b) ascertain the portion of the expenses described in paragraph (a) that were incurred by the company, society, foreign company or provincial company in respect of its policies of accident and sickness insurance, its policies of life insurance and annuity and its other policies by multiplying those expenses by

      A/D, B/D and C/D, respectively,

      where

      A, B and C
      represent the total of the gross premium income of the company, society, foreign company or provincial company, as determined by the Superintendent, in respect of
      • (i) its policies of accident and sickness insurance,

      • (ii) its policies of life insurance and annuities, and

      • (iii) its other policies,

      respectively, during the period referred to in the description of D, and

      D
      represents the total of the gross premium income of the company, society, foreign company or provincial company, as determined by the Superintendent, during the period of five calendar years preceding the first to occur of the calendar year in which the Superintendent took control of the company, society or provincial company, or in the case of a foreign company, the assets, and that in which a winding-up order was issued in respect of the company, society, foreign company or provincial company.
  • Marginal note:Amounts conclusive

    (2) The amounts ascertained by the Superintendent pursuant to subsection (1) are final and conclusive for the purposes of this section and sections 687 and 688.

  • 1991, c. 47, s. 686
  • 1996, c. 6, s. 98
  • 2007, c. 6, s. 307

Marginal note:Assessment

 As soon as possible after ascertaining the portions described in paragraph 686(1)(b), the Superintendent shall, subject to this section and to the extent and in the manner that the Governor in Council may prescribe, assess those portions against each company, society, foreign company and provincial company, other than the company, society, foreign company or provincial company in respect of which the expenses were incurred, in the following proportion:

A/B

where

A
represents the net premiums during the immediately preceding calendar year of the company, society, foreign company or provincial company from
  • (i) policies of accident and sickness insurance,

  • (ii) policies of life insurance and annuities, or

  • (iii) other policies; and

B
represents the total net premiums during the immediately preceding calendar year of all companies, societies, foreign companies and provincial companies, other than the company, society, foreign company or provincial company in respect of which the expenses were incurred, from
  • (i) policies of accident and sickness insurance,

  • (ii) policies of life insurance and annuities, or

  • (iii) other policies.

  • 1991, c. 47, s. 687
  • 2007, c. 6, s. 308
 
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