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Income Tax Regulations (C.R.C., c. 945)

Full Document:  

Regulations are current to 2021-11-17 and last amended on 2021-08-12. Previous Versions

PART IIIAnnuities and Life Insurance Policies (continued)

Life Annuity Contracts

  •  (1) For the purposes of this Part and section 148 of the Act, life annuity contract means a contract under which a person authorized under the laws of Canada or of a province to carry on in Canada an annuities business agrees to make annuity payments to one person or partnership (in this section referred to as “the annuitant”) or jointly to two or more annuitants, which annuity payments are, under the terms of the contract,

    • (a) to be paid annually or at more frequent periodic intervals;

    • (b) to commence on a specified day; and

    • (c) to continue throughout the lifetime of one or more individuals (each of whom is referred to in this section as “the identified individual”).

  • (2) For the purposes of subsection (1), a contract shall not fail to be a life annuity contract by reason that

    • (a) the contract provides that the annuity payments may be assigned by the annuitant or owner;

    • (b) the contract provides for annuity payments to be made for a period ending on the death of the identified individual or for a specified period of not less than 10 years, whichever is the lesser;

    • (c) the contract provides for annuity payments to be made for a specified period or throughout the lifetime of the identified individual, whichever is longer, to the annuitant and, if the specified period is longer, to a specified person after that period;

    • (d) the contract provides, in addition to the annuity payments to be made throughout the lifetime of the identified individual, for a payment to be made on the death of the identified individual;

    • (e) the contract provides that the date

      • (i) on which the annuity payments commence, or

      • (ii) on which the contract holder becomes entitled to proceeds of the disposition,

      may be changed with respect to the whole contract or any portion thereof at the option of the annuitant or owner; or

    • (f) the contract provides that all or a portion of the proceeds payable at any particular time under the contract may be received in the form of an annuity contract other than a life annuity contract.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • SOR/80-341, s. 1
  • SOR/82-499, s. 2
  • SOR/83-865, s. 2
  • SOR/2011-188, s. 7

 [Repealed, SOR/83-865, s. 3]

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • SOR/83-865, s. 3
  •  (1) Where in a taxation year the rights of a holder under an annuity contract cease upon termination or cancellation of the contract and

    • (a) the aggregate of all amounts, each of which is an amount in respect of the contract that was included in computing the income of the holder for the year or any previous taxation year by virtue of subsection 12(3) of the Act

    exceeds the aggregate of

    • (b) such proportion of the amount determined under paragraph (a) that the annuity payments made under the contract before the rights of the holder have ceased is of the total of the payments expected to be made under the contract, and

    • (c) the aggregate of all amounts, each of which is an amount in respect of the contract that was deductible in computing the income of the holder for the year or any previous year by virtue of subsection (2),

    the amount of such excess may be deducted by the holder under subsection 20(19) of the Act in computing his income for the year.

  • (2) For the purposes of subsection 20(19) of the Act, where an annuity contract was acquired after December 19, 1980 and annuity payments under the contract commenced before 1982, the amount that may be deducted by a holder under that subsection in respect of an annuity contract for a taxation year is that proportion of

    • (a) the aggregate of all amounts, each of which is an amount that was included in computing the income of the holder for any previous taxation year by virtue of subsection 12(3) of the Act in respect of the contract

    that

    • (b) the aggregate of all annuity payments received by the holder in the year in respect of the contract

    is of

    • (c) the total of the payments determined under paragraph 300(1)(a) or (b) in respect of the holder’s interest in the contract.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • SOR/82-499, s. 3
  • SOR/83-865, s. 4

Prescribed Annuity Contracts

  •  (1) For the purposes of this Part and of subsections 12.2(1) and 20(20) and paragraph 148(2)(b) of the Act, prescribed annuity contract, for a taxation year, means

    • (a) an annuity contract that is, or is issued pursuant to, an arrangement described in any of paragraphs 148(1)(a) to (b.3) and (d) of the Act;

    • (b) an annuity contract described in paragraph 148(1)(c) or (e) of the Act; and

    • (c) an annuity contract

      • (i) under which annuity payments have commenced in the taxation year or a preceding taxation year,

      • (ii) issued by any one of the following (referred to in this section as the “issuer”):

        • (A) a life insurance corporation,

        • (B) a registered charity,

        • (C) a corporation referred to in any of paragraphs (a) to (c) of the definition specified financial institution in subsection 248(1) of the Act,

        • (D) a corporation referred to in subparagraph (b)(ii) of the definition retirement savings plan in subsection 146(1) of the Act, and

        • (E) a corporation (other than a mutual fund corporation or a mortgage investment corporation) the principal business of which is the making of loans,

      • (iii) each holder of which

        • (A) is

          • (I) an individual other than a trust,

          • (II) a trust described in paragraph 104(4)(a) of the Act (in this paragraph referred to as a “specified trust”),

          • (III) a trust that is a qualified disability trust (as defined in subsection 122(3) of the Act) for the taxation year in which the annuity is issued, or

          • (IV) if the annuity is issued before 2016, a trust that is a testamentary trust at the time the annuity is issued,

        • (B) is an annuitant under the contract, and

        • (C) throughout the taxation year, dealt at arm’s length with the issuer,

      • (iv) the terms and conditions of which require that, from the time the contract meets the requirements of this paragraph,

        • (A) all payments made out of the contract be equal annuity payments made at regular intervals but not less frequently than annually, subject to the holder’s right to vary the frequency and quantum of payments to be made out of the contract in any taxation year without altering the present value at the beginning of the year of the total payments to be made in that year out of the contract,

        • (B) the annuity payments thereunder continue for a fixed term or

          • (I) if the holder is an individual (other than a trust), for the life of the first holder or until the day of the later of the death of the first holder and the death of any of the spouse, common-law partner, former spouse, former common-law partner, brothers and sisters (in this subparagraph referred to as “the survivor”) of the first holder, or

          • (II) if the holder is a trust

            1 in the case of a specified trust, for the life of an individual referred to in paragraph 104(4)(a) of the Act who is entitled to receive all of the income of the trust that arose before the individual’s death, or, in the case of a joint spousal or common-law partner trust, until the day of the later of the death of the individual and the death of the beneficiary under the trust who is the individual’s spouse or common-law partner,

            2 in the case of a qualified disability trust, for the life of an individual who is an electing beneficiary (as defined in subsection 122(3) of the Act) of the trust for the taxation year in which the annuity is issued,

            3 in the case of a trust (other than a qualified disability trust or specified trust) where the annuity is issued before October 24, 2012, for the life of an individual who is entitled to receive income from the trust, and

            4 in the case of a trust (other than a qualified disability trust or specified trust) where the annuity is issued after October 23, 2012, for the life of an individual who was entitled when the contract was first held to receive all of the trust’s income that is from an amount received by the trust on or before the individual’s death as a payment under the annuity,

        • (C) if the annuity payments are to be made over a term that is guaranteed or fixed, the guaranteed or fixed term not exceed 91 years minus the age, when the contract was first held, in whole years of the following individual:

          • (I) if the holder is not a trust, the individual who is

            1 in the case of a joint and last survivor annuity, the younger of the first holder and the survivor,

            2 in the case of a contract that is held jointly, the younger of the first holders, and

            3 in any other case, the first holder,

          • (II) if the holder is a specified trust, the individual who is

            1 in the case of a joint and last survivor annuity held by a joint spousal or common-law partner trust, the younger of the individuals referred to in paragraph 104(4)(a) of the Act who are in combination entitled to receive all of the income of the trust that arose before the later of their deaths, and

            2 in the case of an annuity that is not a joint and last survivor annuity, the individual referred to in paragraph 104(4)(a) of the Act who is entitled to receive all of the income of the trust that arose before the individual’s death,

          • (III) if the holder is a qualified disability trust, an individual who is an electing beneficiary of the trust for the taxation year in which the annuity is issued, and

          • (IV) if the holder is a trust (other than a qualified disability trust or specified trust) and the annuity is issued before 2016, the individual who was the youngest beneficiary under the trust when the contract was first held,

        • (D) no loans exist under the contract,

        • (E) the holder’s rights under the contract not be disposed of otherwise than

          • (I) if the holder is an individual, on the holder’s death,

          • (II) if the holder is a specified trust (other than a joint spousal or common-law partner trust), on the death of the individual referred to in paragraph 104(4)(a) of the Act who is entitled to receive all of the income of the trust that arose before the individual’s death,

          • (III) if the holder is a specified trust that is a joint spousal or common-law partner trust, on the later of the deaths of the individuals referred to in paragraph 104(4)(a) of the Act who are in combination entitled to receive all of the income of the trust that arose before the later of their deaths, and

          • (IV) if the holder is a trust, other than a specified trust, and the contract is first held after October 2011, on the earlier of

            1 the time at which the trust ceases to be a testamentary trust, and

            2 the death of the individual referred to in subclause (B)(II) or (C)(III) or (IV), as the case may be, in respect of the trust, and

        • (F) no payments be made out of the contract other than as permitted by this section,

      • (v) none of the terms and conditions of which provide for any recourse against the issuer for failure to make any payment under the contract, and

      • (vi) where annuity payments under the contract have commenced

        • (A) before 1987, in respect of which a holder thereof has notified the issuer in writing, before the end of the taxation year, that the contract is to be treated as a prescribed annuity contract,

        • (B) after 1986, in respect of which a holder thereof has not notified the issuer in writing, before the end of the taxation year in which the annuity payments under the contract commenced, that the contract is not to be treated as a prescribed annuity contract, or

        • (C) after 1986, in respect of which a holder thereof has notified the issuer in writing, before the end of the taxation year in which the annuity payments under the contract commenced, that the contract is not to be treated as a prescribed annuity contract and a holder thereof has rescinded the notification by so notifying the issuer in writing before the end of the taxation year.

  • (2) Notwithstanding subsection (1), an annuity contract shall not fail to be a prescribed annuity contract by reason that

    • (a) where the contract provides for a joint and last survivor annuity or is held jointly, the terms and conditions thereof provide that there will be a decrease in the amount of the annuity payments to be made under the contract from the time of death of one of the annuitants thereunder;

    • (b) the terms and conditions thereof provide that where the holder thereof dies at or before the time he attains the age of 91 years, the contract will terminate and an amount will be paid out of the contract not exceeding the amount, if any, by which the total premiums paid under the contract exceeds the total annuity payments made under the contract;

    • (c) where the annuity payments are to be made over a term that is guaranteed or fixed, the terms and conditions thereof provide that as a consequence of the death of the holder thereof during the guaranteed or fixed term any payments that, but for the death of the holder, would be made during the term may be commuted into a single payment; or

    • (d) the terms and conditions thereof, as they read on December 1, 1982 and at all subsequent times, provide that the holder participates in the investment earnings of the issuer and that the amount of such participation is to be paid within 60 days after the end of the year in respect of which it is determined.

  • (3) For the purposes of this section, the annuitant under an annuity contract is deemed to be the holder of the contract where

    • (a) the contract is held by another person in trust for the annuitant; or

    • (b) the contract was acquired by the annuitant under a group term life insurance policy under which life insurance was effected on the life of another person in respect of, in the course of, or by virtue of the office or employment or former office or employment of that other person.

  • (4) In this section, annuitant under an annuity contract, at any time, means a person who, at that time, is entitled to receive annuity payments under the contract.

  • (5) For the purpose of this section, spouse and former spouse of a particular individual include another individual who is a party to a void or voidable marriage with the particular individual.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • SOR/82-499, s. 3
  • SOR/83-865, s. 5
  • SOR/86-488, s. 1
  • SOR/88-165, s. 2
  • SOR/88-319, s. 1
  • SOR/94-415, s. 1
  • SOR/94-686, s. 2(F)
  • SOR/2001-188, s. 3
  • SOR/2001-216, s. 10(F)
  • SOR/2007-116, s. 1
  • 2009, c. 2, s. 90
  • SOR/2009-222, s. 1
  • SOR/2011-188, s. 8
  • 2012, c. 31, s. 60
  • 2013, c. 34, s. 378
  • 2014, c. 39, s. 80

 [Repealed, SOR/2011-188, s. 9]

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • SOR/83-865, s. 5
  • SOR/2011-188, s. 9

Exempt Policies

  •  (1) For the purposes of this Part and subsection 12.2(11) of the Act, exempt policy at any time means a life insurance policy (other than an annuity contract, LIA policy or a deposit administration fund policy) in respect of which the following conditions are met at that time:

    • (a) if that time is a policy anniversary of the policy, the accumulating fund of the policy at that time (determined without regard to any policy loan) does not exceed the total of the accumulating funds at that time of the exemption test policies issued at or before that time in respect of the policy;

    • (b) assuming that the terms and conditions of the policy do not change from those in effect on the last policy anniversary of the policy at or before that time and, where necessary, making reasonable assumptions about all other factors (including, in the case of a participating life insurance policy within the meaning assigned by subsection 138(12) of the Act, the assumption that the amounts of dividends paid will be as shown in the dividend scale),

      • (i) if the policy is issued before 2017, it is reasonable to expect that the condition in paragraph (a) will be met on each policy anniversary of the policy on which the policy could remain in force after that time and before the endowment date of the exemption test policies issued in respect of the policy, and

      • (ii) if the policy is issued after 2016, it is reasonable to expect — without reference to any automatic adjustments under the policy that may be made after that time to ensure that the policy is an exempt policy and, where applicable, making projections using the most recent values that are used to calculate the accumulating fund in respect of the policy or in respect of each exemption test policy issued in respect of a coverage under the policy, as the case may be — that the condition in paragraph (a) will be met on the policy’s next policy anniversary;

    • (c) the condition in paragraph (a) was met on all policy anniversaries of the policy before that time; and

    • (d) the condition in paragraph (b) was met at all times on and after the first policy anniversary of the policy and before that time.

  • (2) For the purposes of subsection (1), a life insurance policy that is an exempt policy on its first policy anniversary shall be deemed to have been an exempt policy from the time of its issue until that anniversary.

  • (3) For the purposes of this section and section 307,

    • (a) in the case of a life insurance policy issued before 2017, a separate exemption test policy is deemed, subject to subsection (7), to be issued in respect of the life insurance policy

      • (i) on the date of issue of the life insurance policy, and

      • (ii) on each policy anniversary of the life insurance policy on which

        • (A) the amount of the benefit on death under the life insurance policy

        exceeds

        • (B) 108% of the amount of the benefit on death under the life insurance policy on the later of the life insurance policy’s date of issue and the date of the life insurance policy’s preceding policy anniversary, if any; and

    • (b) in the case of a life insurance policy issued after 2016, a separate exemption test policy is deemed, subject to subsection (7), to be issued in respect of each coverage under the life insurance policy

      • (i) on the date of

        • (A) issue of the life insurance policy, if the coverage is issued before the first policy anniversary of the life insurance policy,

        • (B) issue of the coverage, if the coverage is issued on a policy anniversary of the life insurance policy, or

        • (C) the life insurance policy’s preceding policy anniversary, if the coverage is issued on any date that is after the policy’s first policy anniversary and that is not a policy anniversary,

      • (ii) on each policy anniversary of the life insurance policy on which

        • (A) the amount of the benefit on death under the coverage on that policy anniversary

        exceeds

        • (B) 108% of the amount of the benefit on death under the coverage, on the later of the coverage’s date of issue and the date of the life insurance policy’s preceding policy anniversary (or, if there is no preceding policy anniversary, the coverage’s date of issue), and

      • (iii) on each policy anniversary of the life insurance policy — except to the extent that another exemption test policy has been issued on that date under this subparagraph in respect of a coverage under the life insurance policy — on which

        • (A) the amount by which the fund value benefit under the life insurance policy on that policy anniversary exceeds the fund value benefit under the life insurance policy on the life insurance policy’s preceding policy anniversary (or, if there is no preceding policy anniversary, the date of issue of the policy)

        exceeds

        • (B) the amount by which

          • (I) 8% of the amount of the benefit on death under the life insurance policy on the life insurance policy’s preceding policy anniversary (or, if there is no preceding policy anniversary, the date of issue of the policy)

          exceeds

          • (II) the total of all amounts each of which is, in respect of a coverage under the policy, the lesser of

            1 the amount by which the amount of the benefit on death under the coverage on that policy anniversary exceeds the amount of the benefit on death under the coverage on the later of the coverage’s date of issue and the date of the life insurance policy’s preceding policy anniversary (or, if there is no preceding policy anniversary, the coverage’s date of issue), and

            2 8% of the amount of the benefit on death under the coverage on the later of the coverage’s date of issue and the date of the life insurance policy’s preceding policy anniversary (or, if there is no preceding policy anniversary, the coverage’s date of issue).

  • (4) For the purpose of determining whether the condition in paragraph (1)(a) is met on a policy anniversary of a life insurance policy, each exemption test policy issued in respect of the life insurance policy, or in respect of a coverage under the life insurance policy, is deemed

    • (a) to have a benefit on death that is uniform throughout the term of the exemption test policy and that, subject to subsection (5), is equal to

      • (i) if the date on which the exemption test policy is issued is determined by subparagraph (3)(a)(i), the amount by which the amount on that policy anniversary of the benefit on death under the life insurance policy exceeds the total of all amounts each of which is the amount, if any, on that policy anniversary of the benefit on death under another exemption test policy issued on or before that policy anniversary in respect of the life insurance policy,

      • (ii) if the date on which the exemption test policy is issued is determined by subparagraph (3)(a)(ii), the amount of the excess referred to in that subparagraph on that date in respect of the life insurance policy,

      • (iii) if the date on which the exemption test policy is issued is determined by subparagraph (3)(b)(i), the amount determined by the formula

        A + B – C

        where

        A
        is the amount on that policy anniversary of the benefit on death under the coverage,
        B
        is
        • (A) if the benefit on death under the life insurance policy includes a fund value benefit on that policy anniversary, the portion of the fund value benefit on that policy anniversary that is equal to the lesser of

          • (I) the maximum amount of the fund value benefit that could be payable on that policy anniversary if no other coverage were offered under the life insurance policy and the life insurance policy were an exempt policy, and

          • (II) the amount by which the fund value benefit on that policy anniversary exceeds the total of all amounts each of which is the portion of the fund value benefit allocated to other coverages under the life insurance policy, and

        • (B) in any other case, nil, and

        C
        is the total of all amounts each of which is the amount, if any, on that policy anniversary of the benefit on death under another exemption test policy issued on or before that policy anniversary in respect of the coverage,
      • (iv) if the date on which the exemption test policy is issued is determined by subparagraph (3)(b)(ii), the amount of the excess referred to in that subparagraph on that date in respect of the coverage, and

      • (v) if the date on which the exemption test policy is issued is determined by subparagraph (3)(b)(iii), the lesser of

        • (A) the amount by which the amount determined under clause (3)(b)(iii)(A) exceeds the amount determined under clause (3)(b)(iii)(B) on that date in respect of the coverage, and

        • (B) the amount determined in respect of the coverage under subclause (A)(I) of the description of B in subparagraph (iii) on that date; and

    • (b) to pay the amount of its benefit on death on the earlier of

      • (i) if the life insurance policy

        • (A) is issued before 2017, the date of death of the individual whose life is insured under the life insurance policy, or

        • (B) is issued after 2016,

          • (I) if two or more lives are jointly insured under the coverage, the date at which the benefit would be payable as a result of the death of any of the lives, and

          • (II) in any other case, the date of death of the individual whose life is insured under the coverage, and

      • (ii) the exemption test policy’s endowment date.

  • (5) For the purpose of determining the amount of a benefit on death under an exemption test policy,

    • (a) if the exemption test policy is issued in respect of a life insurance policy issued before 2017 and at any time the amount of a benefit on death under the life insurance policy is reduced, a particular amount that is equal to the reduction is to be applied at that time to reduce the amount of the benefit on death under each exemption test policy issued before that time in respect of the life insurance policy (other than the exemption test policy the date of issue of which is determined under subparagraph (3)(a)(i)) in the order in which the dates of their issuance are proximate to that time, by an amount equal to the lesser of

      • (i) the portion, if any, of the particular amount not applied to reduce the benefit on death under one or more other such exemption test policies, and

      • (ii) the amount, immediately before that time, of the benefit on death under the relevant exemption test policy; and

    • (b) if the exemption test policy is issued in respect of a coverage under a life insurance policy issued after 2016 and at any time there is a particular reduction in the amount of a benefit on death under the coverage, or the portion, if any, of the fund value benefit referred to in clause (A) of the description of B in subparagraph (4)(a)(iii) in respect of the coverage, the amount of the benefit on death under each exemption test policy issued before that time in respect of the coverage (other than the exemption test policy the date of issue of which is determined under subparagraph (3)(b)(i)) is reduced at that time by an amount equal to the least of

      • (i) the particular reduction,

      • (ii) the amount, immediately before that time, of the benefit on death under the relevant exemption test policy, and

      • (iii) the portion, if any, of the particular reduction not applied to reduce the benefit on death under one or more other such exemption test policies issued on or after the date of issue of the relevant exemption test policy.

  • (6) Subsection (7) applies at any time in respect of a life insurance policy if

    • (a) that time is on its tenth or a later policy anniversary;

    • (b) the accumulating fund (computed without regard to any amount payable in respect of a policy loan) in respect of the policy at that time exceeds 250% of

      • (i) in the case where the particular time at which the policy is issued is determined under subsection 148(11) of the Act and the policy’s third preceding policy anniversary is before the particular time, the accumulating fund (computed without regard to any amount payable in respect of a policy loan and as though the policy were issued after 2016) in respect of the policy on that third preceding policy anniversary, and

      • (ii) in any other case, the accumulating fund (computed without regard to any amount payable in respect of a policy loan) in respect of the policy on its third preceding policy anniversary; and

    • (c) where that time is after 2016,

      • (i) the accumulating fund (computed without regard to any amount payable in respect of a policy loan) in respect of the policy at that time exceeds the total of all amounts each of which is

        • (A) if the policy is issued before 2017, 3/20 of the accumulating fund, at that time, in respect of an exemption test policy issued in respect of the policy, and

        • (B) if the policy is issued after 2016, 3/8 of the accumulating fund, at that time, in respect of an exemption test policy issued in respect of a coverage under the policy, and

      • (ii) subsection (7) did not apply on any of the policy’s six preceding policy anniversaries.

  • (7) If this subsection applies at any time in respect of a life insurance policy, each exemption test policy issued before that time in respect of the life insurance policy is at and after that time deemed to be issued (except for purposes of this subsection, paragraph (4)(a) and subsection (5))

    • (a) on the later of

      • (i) the date of the third preceding policy anniversary described in paragraph (6)(b) in respect of the policy, and

      • (ii) the date on which it was deemed by subsection (3) or (10), as the case may be, to be issued (determined immediately before that time); and

    • (b) not at any other time.

  • (8) A life insurance policy that would, in the absence of this subsection, cease (other than by reason of its conversion into an annuity contract) on a policy anniversary of the policy to be an exempt policy is deemed to be an exempt policy on that policy anniversary if

    • (a) had that policy anniversary occurred on the particular day that is 60 days after that policy anniversary, the policy would have been an exempt policy on the particular day; or

    • (b) the person whose life is insured under the policy dies on that policy anniversary or within 60 days after that policy anniversary.

  • (9) A life insurance policy (other than an annuity contract or deposit administration fund policy) issued before December 2, 1982 is deemed to be an exempt policy at all times from the date of its issue until the first time after December 1, 1982 at which

    • (a) a prescribed premium is paid by a taxpayer in respect of an interest, last acquired before December 2, 1982, in the policy; or

    • (b) an interest in the policy is acquired by a taxpayer from the person who held the interest continuously since December 1, 1982.

  • (10) Notwithstanding subsections (3) and (4), if a life insurance policy is issued for any purpose at a particular time determined under subsection 148(11) of the Act, then for the purposes of applying this section (other than this subsection and subsection (9)) and section 307 in respect of the life insurance policy at and after the particular time,

    • (a) in respect of each coverage issued before the particular time under the life insurance policy, a separate exemption test policy is deemed to be issued in respect of a coverage under the life insurance policy

      • (i) on the date of issue of the life insurance policy, and

      • (ii) on each policy anniversary that ends before the particular time of the life insurance policy on which

        • (A) the amount of the benefit on death under the life insurance policy

        exceeds

        • (B) 108% of the amount of the benefit on death under the life insurance policy on the later of the life insurance policy’s date of issue and the date of the life insurance policy’s preceding policy anniversary, if any;

    • (b) in respect of each coverage issued before the particular time under the life insurance policy, subsection (3) does not apply to deem an exemption test policy to be issued in respect of the policy, or in respect of a coverage under the policy, at any time before the particular time;

    • (c) in respect of each exemption test policy the date of issuance of which is determined under subparagraph (a)(i), the references in subparagraph (4)(a)(iii) and paragraph (5)(b) to “subparagraph (3)(b)(i)” are to be read as references to “subparagraph (10)(a)(i)”;

    • (d) in respect of each exemption test policy the date of issuance of which is determined under subparagraph (a)(ii), subparagraph (4)(a)(iv) is to be read as follows:

      • (iv) if the date on which the exemption test policy is issued is determined by subparagraph (10)(a)(ii) at a time before a particular time, the portion of the amount – that amount being the amount that would be determined, at the time immediately before the particular time, under subparagraph (a)(ii), if the exemption test policy were issued in respect of the policy on the same date as the date determined for it under subparagraph (10)(a)(ii) – that can be reasonably allocated to the coverage in the circumstances (and for these purposes, an allocation is considered not to be reasonable if the total of the amounts determined for A and B in subparagraph (a)(iii) is less than the amount determined for C in that subparagraph in respect of the exemption test policy the date of issuance of which is determined under subparagraph (10)(a)(i) in respect of the coverage), and

    and

    • (e) in applying paragraph (5)(b), the reference in that paragraph to “any time” is to be read as “any time at or after the particular time referred to in subsection (10) in respect of the life insurance policy”.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • SOR/83-865, s. 5
  • SOR/94-415, s. 2
  • SOR/94-686, ss. 55(F), 56(F)
  • 2013, c. 40, s. 97
  • 2014, c. 39, s. 81
  • 2017, c. 33, s. 85
 
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