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Northern Ontario Loan Insurance Regulations (SOR/88-503)

Regulations are current to 2020-11-17

Payment of a Claim

 The Minister shall not pay a claim made by a lender under a loan insurance agreement unless the lender

  • (a) makes a formal demand; and

  • (b) submits evidence to the Minister that establishes that the lender has

    • (i) taken all reasonable steps to protect the lender’s rights and realize on the security provided in respect of the loan, and

    • (ii) suffered a loss as referred to in section 11.

  •  (1) The maximum amount payable to a lender pursuant to a loan insurance agreement shall be the lesser of

    • (a) the amount representing the percentage of insurance, as stipulated in the loan insurance agreement, that is applied to the loss suffered; and

    • (b) the insured amount at the time of the formal demand.

  • (2) For the purpose of subsection (1), loss means the aggregate of

    • (a) the principal amount of the outstanding loan and the amount of unpaid interest on the loan at the date of the formal demand,

    • (b) reasonable legal fees, costs and other expenses paid by the lender for the purpose of collecting any amount referred to in paragraph (a),

    • (c) costs incurred and paid by the lender to protect any security provided in respect of the loan disbursed under the loan agreement, and

    • (d) interest on the amounts referred to in paragraphs (a), (b) and (c), to be calculated from the date of the formal demand until the date of payment of the lender’s claim by the Minister

      • (i) at the rate charged by the lender under the loan agreement at the date of the formal demand

        • (A) for a period of up to 180 days after the date of the formal demand, and

        • (B) for an additional period not exceeding 180 days where the Minister and the lender agree to realize on the security during that additional period, and

      • (ii) at one-half the rate referred to in subparagraph (i) for any period after the relevant periods referred to in that subparagraph,

    less

    • (e) any amount

      • (i) realized on the security provided in respect of the loan, and

      • (ii) recovered by the lender after the date of the formal demand in excess of the aggregate amount of all other loans granted by the lender to the applicant.

  • SOR/91-337, s. 3

Stock Options and Capital Shares

  •  (1) The Minister may, on behalf of Her Majesty in right of Canada, acquire a stock option as a condition of entering into a loan insurance agreement if the total amount of the loan provided for by the loan agreement is $500,000 or more and the expected rate of return associated with the project justifies the acquisition of the stock option.

  • (2) Where, pursuant to subsection (1), the Minister acquires a stock option, the Minister may exercise, assign or sell the stock option where the exercise, assignment or sale is of benefit to Her Majesty in right of Canada.

  • (3) Where the Minister on behalf of Her Majesty in right of Canada acquires capital stock under a stock option, the Minister shall, within two years after the day on which the capital stock is acquired, sell the capital stock to benefit Her Majesty in right of Canada.

  • (4) Where the Minister receives an offer to purchase a stock option or capital stock acquired under a stock option and the acceptance of the offer would be of benefit to Her Majesty in right of Canada, the Minister shall in writing notify the applicant of the offer.

  • (5) Where the applicant intends to purchase the stock option or the capital stock at the price and on the terms and conditions specified in the offer referred to in subsection (4), the applicant shall so advise the Minister within seven business days following the day on which the applicant is notified of the offer.

  • (6) Where an applicant advises the Minister pursuant to subsection (5), the Minister shall sell the stock option or capital stock to the applicant.

  • SOR/91-337, s. 4
  • SOR/92-453, s. 1
 
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