Insurance Companies Act

Marginal note:Permitted investments

• 554 (1) Subject to subsections (4) and (5), a society may acquire control of, or acquire or increase a substantial investment in,

  • (a) a company or a society;

  • (b) an insurance corporation incorporated or formed by or under an Act of the legislature of a province; or

  • (c) an entity that is incorporated or formed, and regulated, otherwise than by or under an Act of Parliament or of the legislature of a province and that is primarily engaged outside Canada in a business that, if carried on in Canada, would be the business of insurance.

• Marginal note:Permitted investments

  (2) Subject to subsections (3) to (5), a society may acquire control of, or acquire or increase a substantial investment in, an entity, other than an entity referred to in any of paragraphs (1)(a) to (c), whose business is limited to one or more of the following:

  • (a) engaging in any financial service activity or in any other activity that a property and casualty company is permitted to engage in under subsection 440(2) or section 441 or 442, other than paragraph 441(1)(h);

  • (b) acquiring or holding shares of, or ownership interests in, entities in which a society is permitted under this Part to hold or acquire;

  • (c) engaging in the provision of any services exclusively to any or all of the following, so long as the entity is providing those services to the society or any member of the society’s group:

    • (i) the society,

    • (ii) any member of the society’s group,

    • (iii) any entity that is primarily engaged in the business of providing financial services,

    • (iv) any permitted entity in which an entity referred to in subparagraph (iii) has a substantial investment, or

    • (v) any prescribed person, if it is doing so under prescribed terms and conditions, if any are prescribed;

  • (d) engaging in any activity that a society is permitted to engage in, other than an activity referred to in paragraph (a) or (e), that relates to

    • (i) the promotion, sale, delivery or distribution of a financial product or financial service that is provided by the society or any member of the society’s group, or

    • (ii) if a significant portion of the business of the entity involves an activity referred to in subparagraph (i), the promotion, sale, delivery or distribution of a financial product or financial service that is provided by any other entity that is primarily engaged in the business of providing financial services;

  • (e) engaging in the activities referred to in the definition closed-end fund, mutual fund distribution entity or mutual fund entity in subsection 490(1); and

  • (f) engaging in prescribed activities, under prescribed terms and conditions, if any are prescribed.

• Marginal note:Permitted infrastructure entities

  (2.1) Subject to subsection (3), a society may — under any prescribed terms and conditions — acquire control of, or acquire or increase a substantial investment in, a permitted infrastructure entity.

• Marginal note:Restriction

  (3) A society may not acquire control of, or acquire or increase a substantial investment in, an entity whose business includes any activity referred to in any of paragraphs (2)(a) to (e), or in any regulation made under paragraph 2.2(b), if the entity engages in the business of accepting deposit liabilities or if the activities of the entity include

  • (a) activities that a property and casualty company is not permitted to engage in under any of sections 466, 469 and 478;

  • (b) any financial intermediary activity that exposes the entity to material market or credit risk, including the activities of a finance entity, a factoring entity and a financial leasing entity;

  • (b.1) the activities of a specialized financing entity;

  • (c) dealing in securities, except as may be permitted under paragraph (2)(e) or as may be permitted to a company under paragraph 440(2)(b);

  • (d) acquiring control of or acquiring or holding a substantial investment in another entity unless

    • (i) in the case of an entity, other than a permitted infrastructure entity, that is controlled by the society, the society itself would be permitted under this Part to acquire a substantial investment in the other entity,

    • (ii) in the case of an entity, other than a permitted infrastructure entity, that is not controlled by the society, the society itself would be permitted to acquire a substantial investment in the other entity under subsection (1), (2) or (2.1) or 552(2) or paragraph 552(3)(b) or (c), or

    • (iii) in the case of a permitted infrastructure entity, whether or not that entity is controlled by the society, the society itself would be permitted to acquire a substantial investment in the other entity under subsection (2.1); or

  • (e) any prescribed activity.

• Marginal note:Exception

  (3.1) Despite paragraph (3)(a), a society may acquire control of, or acquire or increase a substantial investment in, any entity that acts as a trustee of a trust if the entity has been authorized under the laws of a province to act as a trustee of a trust and the entity is

  • (a) a closed-end fund;

  • (b) a mutual fund entity; or

  • (c) an entity whose business is limited to engaging in one or more of the following:

    • (i) the activities of a mutual fund distribution entity,

    • (ii) any activity that a company is permitted to engage in under subsection 441(1.1), and

    • (iii) the provision of investment counselling services and portfolio management services.

• Marginal note:Control

  (4) Subject to subsection (6) and the regulations, a society may not acquire control of, or acquire or increase a substantial investment in,

  • (a) an entity referred to in any of paragraphs (1)(a) to (c), unless the society controls, within the meaning of paragraph 3(1)(d), the entity, or would thereby acquire control, within the meaning of that paragraph, of the entity; or

  • (b) an entity whose business includes an activity referred to in paragraph (2)(b), unless

    • (i) the society controls, within the meaning of paragraph 3(1)(d), the entity, or

    • (ii) subject to prescribed terms and conditions, if any are prescribed, the activities of the entity do not include the acquisition or holding of control of, or the acquisition or holding of shares or other ownership interests in, an entity referred to in paragraph (a) or an entity that is not a permitted entity.

• Marginal note:Minister’s approval

  (5) Subject to the regulations, a society may not, without the prior written approval of the Minister, acquire control of, or acquire or increase a substantial investment in, a permitted entity other than a permitted infrastructure entity or an entity whose activities are limited to acquiring or holding shares of, or ownership interests in, permitted infrastructure entities.

• Marginal note:Control not required

  (6) A society need not control an entity referred to in paragraph (1)(c), or an entity that is incorporated or formed otherwise than by or under an Act of Parliament or of the legislature of a province, if the laws or customary business practices of the country under the laws of which the entity was incorporated or formed do not permit the society to control the entity.

• Marginal note:Prohibition on giving up control in fact

  (7) A society that, under subsection (4), controls an entity may not, without the prior written approval of the Minister, give up control, within the meaning of paragraph 3(1)(d), of the entity while it continues to control the entity.

• Marginal note:Subsections do not apply

  (8) If a society controls, within the meaning of paragraph 3(1)(a), (b) or (c), an entity, subsection (5) does not apply in respect of any subsequent increases by the society to its substantial investment in the entity so long as the society continues to control the entity.

• Marginal note:Regulations

  (9) The Governor in Council may make regulations

  • (a) for the purposes of subsection (4), permitting the acquisition of control or the acquisition or increase of substantial investments, or prescribing the circumstances under which that subsection does not apply or the societies or other entities in respect of which that subsection does not apply, including prescribing societies or other entities on the basis of the activities they engage in;

  • (b) for the purposes of subsection (5), permitting the acquisition of control or the acquisition or increase of substantial investments, or prescribing the circumstances under which that subsection does not apply or the societies or other entities in respect of which that subsection does not apply, including prescribing societies or other entities on the basis of the activities they engage in; and

  • (c) for the purposes of subsection (2.1), establishing terms and conditions respecting the acquisition of control of, or the acquisition or increase of a substantial investment in, a permitted infrastructure entity by a society.