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

Act current to 2021-10-07 and last amended on 2021-06-30. Previous Versions

PART XIIIForeign Companies (continued)

Adequacy of Assets (continued)

Marginal note:Inadmissible assets

  •  (1) A foreign company may not vest in trust

    • (a) securities issued by or debt obligations of the foreign company or one of its affiliates;

    • (b) real property, or ground rents or mortgages on real property, situated outside Canada;

    • (c) shares or ownership interests, however designated, in any entity in such number as would constitute a substantial investment in that entity without regard to any shares or ownership interests held by any other entity; or

    • (d) a loan made in Canada on the security of residential property in Canada for the purpose of purchasing, renovating or improving that property, if the amount of the loan, together with the amount then outstanding of any mortgage having an equal or prior claim against the property, would exceed 80 per cent of the value of the property at the time of the loan.

  • Marginal note:Exception

    (2) Despite paragraphs (1)(a) and (c), a foreign company may vest in trust a substantial investment in an entity that is primarily engaged in

    • (a) holding, managing or otherwise dealing with real property; or

    • (b) holding shares or ownership interests in entities that are primarily engaged in any of the activities referred to in paragraph (a).

  • Marginal note:Idem

    (3) Notwithstanding paragraph (1)(d), a foreign company may vest in trust

    • (a) a loan made or guaranteed under the National Housing Act or any other Act of Parliament by or pursuant to which a different limit on the value of property on the security of which the foreign company may make a loan is established;

    • (b) a loan if repayment of the amount of the loan that exceeds the maximum amount set out in subsection (1) is guaranteed or insured by a government agency or a private insurer approved by the Superintendent; or

    • (c) securities issued or guaranteed by an entity that are secured on any residential property, whether in favour of a trustee or otherwise, or a loan made by the foreign company to the entity against the issue of such securities.

  • 1991, c. 47, s. 612
  • 1993, c. 34, s. 85(E)
  • 1997, c. 15, s. 315
  • 2007, c. 6, s. 290

Investments

Definitions and Application

Definition of commercial loan

 In sections 615 to 620, commercial loan has the same meaning as in Part IX.

Marginal note:Non-application

  •  (1) Sections 612 and 615 to 620 do not apply in respect of assets of a foreign company held in relation to a segregated fund maintained pursuant to section 593.

  • Marginal note:Exclusion of liabilities of segregated funds

    (2) A reference in sections 615 to 619 and in regulations made under section 620 to the assets in Canada or the liabilities in Canada of a foreign company does not include liabilities of the foreign company for the policies and amounts in respect of which a segregated fund is maintained pursuant to section 593.

  • 1991, c. 47, s. 614
  • 2007, c. 6, s. 291

General Constraints on Investments

Marginal note:Investment standards

  •  (1) A foreign company shall, in respect of its assets in Canada, establish and adhere to investment and lending policies, standards and procedures that a reasonable and prudent person would apply in respect of a portfolio of investments and loans to avoid undue risk of loss and obtain a reasonable return.

  • Marginal note:Resolution of board of directors

    (2) A foreign company to which subsection 573(4) applies shall, during the period of ninety days following the coming into force of this Part, file with the Superintendent a certified copy of a resolution of its board of directors establishing the investment and lending policies, standards and procedures referred to in subsection (1).

Commercial Lending by Foreign Life Companies

Marginal note:Lending limit — foreign life companies

  •  (1) The total accepted value of commercial loans vested in trust by a foreign life company for the classes of life insurance, accident and sickness insurance, credit protection insurance and other approved products insurance shall not at any time exceed the prescribed percentage of the value of its assets in Canada for those classes.

  • Marginal note:Lending limit — foreign composite companies

    (2) The total accepted value of the commercial loans and loans to natural persons vested in trust by a foreign life company for the classes of insurance other than life insurance, accident and sickness insurance, credit protection insurance and other approved products insurance, shall not at any time exceed the prescribed percentage of the value of its assets in Canada for those classes.

  • 1991, c. 47, s. 616
  • 2007, c. 6, s. 292

Consumer and Commercial Lending by Foreign Property and Casualty Companies and Foreign Marine Companies

Marginal note:Lending limit — foreign property and casualty companies and foreign marine companies

 The total accepted value of the commercial loans and loans to natural persons vested in trust by a foreign property and casualty company, or a foreign marine company, shall not at any time exceed the prescribed percentage of the value of its assets in Canada.

  • 1991, c. 47, s. 617
  • 2007, c. 6, s. 292

Real Property

Marginal note:Limit on total property interest — foreign life companies

  •  (1) The total accepted value of interests in real property vested in trust by a foreign life company for the classes of life insurance, accident and sickness insurance, credit protection insurance and other approved products insurance shall not at any time exceed the prescribed percentage of the value of its assets in Canada for those classes.

  • Marginal note:Limit on total property interest — foreign composite companies

    (2) The total accepted value of interests in real property vested in trust by a foreign life company for the classes of insurance other than life insurance, accident and sickness insurance, credit protection insurance and other approved products insurance, shall not at any time exceed the prescribed percentage of the value of its assets in Canada for those classes.

  • Marginal note:Limit on total property interest — foreign property and casualty companies and foreign marine companies

    (3) The total accepted value of interests in real property vested in trust by a foreign property and casualty company, or a foreign marine company, shall not at any time exceed the prescribed percentage of the value of its assets in Canada.

  • 1991, c. 47, s. 618
  • 2007, c. 6, s. 292

Equities

Marginal note:Limit on equity acquisitions — foreign life companies

  •  (1) The total accepted value of the participating shares, within the meaning of Part IX, of any body corporate and any ownership interests, howsoever designated, in any unincorporated entities vested in trust by a foreign life company for the classes of life insurance, accident and sickness insurance, credit protection insurance and other approved products insurance shall not at any time exceed the prescribed percentage of the value of its assets in Canada for those classes.

  • Marginal note:Limit on equity acquisitions — foreign composite companies

    (2) The total accepted value of the participating shares, within the meaning of Part IX, of any body corporate and any ownership interests, howsoever designated, in any unincorporated entities vested in trust by a foreign life company for the classes of insurance, other than life insurance, accident and sickness insurance, credit protection insurance and other approved products insurance, shall not at any time exceed the prescribed percentage of the value of its assets in Canada for those classes.

  • Marginal note:Limit on equity acquisitions — foreign property and casualty companies and foreign marine companies

    (3) The total accepted value of the participating shares, within the meaning of Part IX, of any body corporate and any ownership interests, howsoever designated, in any unincorporated entities vested in trust by a foreign property and casualty company, or a foreign marine company, shall not at any time exceed the prescribed percentage of the value of its assets in Canada.

  • 1991, c. 47, s. 619
  • 2007, c. 6, s. 292

Aggregate Limit

Marginal note:Limit on aggregate value

 The aggregate value of each of the following total accepted values, namely,

  • (a) the total accepted values referred to in subsections 618(1) and 619(1),

  • (b) the total accepted values referred to in subsections 618(2) and 619(2), and

  • (c) the total accepted values referred to in subsections 618(3) and 619(3),

shall not at any time exceed the respective prescribed percentage of the value of the assets in Canada.

Self-dealing

Marginal note:Prohibited transactions

 A foreign company shall not vest in trust any asset in accordance with this Part if the asset was acquired through a transaction that at the time of acquisition would be prohibited for a company pursuant to section 521.

 
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