An Act to amend the law governing financial institutions and to provide for related and consequential matters (S.C. 2007, c. 6)
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Assented to 2007-03-29
PART 31991, c. 47AMENDMENTS TO THE INSURANCE COMPANIES ACT
299. Subsection 665(3) of the Act is repealed.
Marginal note:2001, c. 9, s. 460(1)
300. Paragraph 678.1(1)(b) of the Act is replaced by the following:
(b) that is the subject of a direction made under section 676 or an order made under subsection 515(3).
Marginal note:2001, c. 9, s. 461
301. Subparagraph 678.2(1)(b)(iii) of the Act is replaced by the following:
(iii) an order made under subsection 515(3),
Marginal note:2001, c. 9, s. 461
302. Subparagraph 678.3(1)(a)(i) of the Act is replaced by the following:
(i) have been specified by the Superintendent by way of conditions or limitations in respect of the order made under subsection 574(1) in respect of the foreign company, or
Marginal note:2001, c. 9, s. 461
303. Subparagraph 678.4(1)(b)(iv) of the Act is replaced by the following:
(iv) a condition or limitation in respect of the order made under subsection 574(1) in respect of the foreign company, or
Marginal note:2001, c. 9, s. 462
304. Subsection 678.5(1) of the Act is replaced by the following:
Marginal note:Direction to transfer policies or to reinsure risks — society
678.5 (1) If the circumstances described in any of paragraphs 679(1.1)(a) to (e) or (g) exist in respect of a 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 to, or cause itself to be reinsured, against all or any portion of the risks undertaken under its 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:2001, c. 9, s. 462
305. Subsection 678.6(1) of the Act is replaced by the following:
Marginal note:Direction to transfer policies or to reinsure risks — foreign fraternal benefit society
678.6 (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:2001, c. 9, s. 463(2)
306. (1) Paragraph 679(1.1)(f) of the Act is replaced by the following:
(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
Marginal note:1996, c. 6, s. 96
(2) Paragraph 679(1.2)(c) of the Act is replaced by the following:
(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;
Marginal note:2001, c. 9, s. 463(4)
(3) Paragraph 679(1.2)(f) of the Act is replaced by the following:
(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:1996, c. 6, s. 96
(4) Subsection 679(2) of the Act is replaced by the following:
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.
307. Paragraph 686(1)(b) of the Act is replaced by the following:
(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.
308. Section 687 of the Act is replaced by the following:
Marginal note:Assessment
687. 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.
309. (1) The definition “special insurance” in subsection 688(2) of the Act is repealed.
(2) The definitions “gross premium income” and “net premiums” in subsection 688(2) of the Act are replaced by the following:
“gross premium income”
« produit brut »
“gross premium income” of a company, society, foreign company or provincial company means its premium income from its insurance business in Canada calculated without reduction in respect of reinsurance premiums paid or payable;
“net premiums”
« primes nettes »
“net premiums” of a company, society, foreign company or provincial company means its gross premium income less
(a) premiums paid or payable in respect of the reinsurance of risks undertaken under its policies in respect of its insurance business in Canada, and
(b) dividends paid or allowed by it to its policyholders in respect of its insurance business in Canada.
Marginal note:2001, c. 9, s. 465; 2006, c. 4, s. 201.1
310. Section 707 of the Act is replaced by the following:
Marginal note:Sunset provision
707. (1) Subject to subsections (2) and (3), insurance holding companies shall not carry on business after the day that is the fifth anniversary of the day on which this section comes into force.
Marginal note:Extension
(2) The Governor in Council may, by order, extend by up to six months the time during which insurance holding companies may continue to carry on business. No more than one order may be made under this subsection.
Marginal note:Exception
(3) If Parliament dissolves on the fifth anniversary of the day on which this section comes into force, on any day within the three-month period before that anniversary or on any day within an extension under subsection (2), insurance holding companies may continue to carry on business for 180 days after the first day of the first session of the next Parliament.
Marginal note:2001, c. 9, s. 465
311. Paragraph 725(1)(e) of the Act is replaced by the following:
(e) maintain outside Canada any records or registers required by this Act to be maintained in Canada.
Marginal note:2001, c. 9, s. 465
312. Subsection 726(1) of the Act is replaced by the following:
Marginal note:Transferring to other Acts
726. (1) An insurance holding company may apply to be continued only as a body corporate under any other Act of Parliament or any Act of the legislature of a province, and it may do so only with the approval in writing of the Minister.
Marginal note:2001, c. 9, s. 465
313. The portion of section 731 of the Act before paragraph (a) is replaced by the following:
Marginal note:Affiliated insurance holding company
731. Despite section 730 and subject to section 732, an insurance holding company that is affiliated with another entity may, with the consent of that entity,
Marginal note:2005, c. 54, s. 370(2)
314. Subsection 745(5) of the English version of the Act is replaced by the following:
Marginal note:Material to Superintendent
(5) If the directors exercise their authority under paragraph (1)(b), the directors shall, before the issue of shares of the series, send to the Superintendent particulars of the series of shares and a copy of the by-law that granted the authority to the directors.
Marginal note:2001, c. 9, s. 465
315. Subsection 754(2) of the Act is replaced by the following:
Marginal note:Restrictions on purchase and redemption
(2) An insurance holding company shall not make any payment to purchase or redeem any shares issued by it if there are reasonable grounds for believing that it is, or the payment would cause it to be, in contravention of subsection 992(1), any regulation made under subsection 992(2) or any order made under subsection 992(3).
316. The Act is amended by adding the following after section 755:
Marginal note:Exception — conditions before acquisition
755.1 (1) An insurance holding company may permit any of its subsidiaries to acquire shares of the insurance holding company through the issuance of those shares by the insurance holding company to the subsidiary if the conditions prescribed for the purposes of this subsection are met before the subsidiary acquires the shares.
Marginal note:Conditions after acquisition
(2) After a subsidiary has acquired shares under the purported authority of subsection (1), the conditions prescribed for the purposes of this subsection must be met.
Marginal note:Non-compliance with conditions
(3) If an insurance holding company permits any of its subsidiaries to acquire shares of the insurance holding company under the purported authority of subsection (1) and one or more of the conditions prescribed for the purposes of subsections (1) and (2) were not met, are not met or cease to be met, as the case may be, then, despite section 702 and subsection 749(2), the insurance holding company must comply with the prescribed requirements.
Marginal note:2001, c. 9, s. 465
317. (1) Subsection 757(2) of the Act is replaced by the following:
Marginal note:Limitation
(2) An insurance holding company shall not reduce its stated capital by special resolution if there are reasonable grounds for believing that the insurance holding company is, or the reduction would cause the insurance holding company to be, in contravention of subsection 992(1), any regulation made under subsection 992(2) or any order made under subsection 992(3).
(2) Section 757 of the Act is amended by adding the following after subsection (4):
Marginal note:Exception
(4.1) Subsection (4) does not apply if
(a) the reduction in the stated capital is made solely as a result of changes made to the accounting principles referred to in subsection 331(4); and
(b) there is to be no return of capital to shareholders as a result of the reduction.
Marginal note:2001, c. 9, s. 465
318. (1) Subsection 761(2) of the Act is replaced by the following:
Marginal note:Notice to Superintendent
(2) The directors of an insurance holding company shall notify the Superintendent of the declaration of a dividend at least 15 days before the day fixed for its payment.
Marginal note:2001, c. 9, s. 465
(2) Subsection 761(4) of the Act is replaced by the following:
Marginal note:When dividend not to be declared
(4) The directors of an insurance holding company shall not declare and an insurance holding company shall not pay a dividend if there are reasonable grounds for believing that the insurance holding company is, or the payment would cause the insurance holding company to be, in contravention of subsection 992(1), any regulation made under subsection 992(2) or any order made under subsection 992(3).
Marginal note:2001, c. 9, s. 465
319. Subsection 796(2) of the Act is replaced by the following:
Marginal note:Residency requirement
(2) At least one half of the directors of an insurance holding company that is a subsidiary of a foreign institution and a majority of the directors of any other insurance holding company must be, at the time of each director’s election or appointment, resident Canadians.
Marginal note:2001, c. 9, s. 465
320. Section 859 of the Act is replaced by the following:
Marginal note:Approval of agreement by Superintendent
859. An amalgamation agreement must be submitted to the Superintendent for approval and any approval of the agreement under subsection 860(4) by the shareholders of an applicant is invalid unless, before the date of the approval, the Superintendent has approved the agreement in writing.
Marginal note:2001, c. 9, s. 465
321. Paragraph 866(1)(e) of the Act is replaced by the following:
(e) maintain outside Canada any records or registers required by this Act to be maintained in Canada.
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