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

Marginal note:Reliance on information

436 A company and any person who is a director or an officer, employee or agent of the company may rely on any information contained in a declaration required by the directors pursuant to section 435 or on any information otherwise acquired in respect of any matter that might be the subject of such a declaration, and no action lies against the company or any such person for anything done or omitted to be done in good faith in reliance on any such information.

437 [Repealed, 1994, c. 47, s. 128]

Marginal note:Exemption regulations

438 The Governor in Council may, by regulation, exempt from any of the provisions of this Part any share transaction or any class of share transactions involving the transfer of shares on the death of the beneficial owner thereof, or any arrangement made in contemplation of the death of the beneficial owner, to one or more members of the beneficial owner’s family, or to one or more trustees on their behalf.

Marginal note:Competition Act

439 Nothing in, or done under the authority of, this Act affects the operation of the Competition Act.

PART VIIIBusiness and Powers

General

Marginal note:Main business

• 440 (1) Subject to this Act, a company shall not engage in or carry on any business other than such business generally as appertains to the business of providing financial services.

• Marginal note:Idem

  (2) For greater certainty, a company may

  • (a) act as a financial agent, receiver, liquidator or sequestrator;

  • (b) provide investment counselling services and portfolio management services; and

  • (c) issue payment, credit or charge cards and, in cooperation with others including other financial institutions, operate a payment, credit or charge card plan.

Marginal note:Additional activities

• 441 (1) In addition, a company may

  • (a) act as an agent for vendors, purchasers, mortgagors, mortgagees, lessors or lessees of real property and provide consulting or appraisal services in respect of real property;

  • (b) hold, manage and otherwise deal with real property;

  • (c) provide information processing services in Canada that the company has developed for its own use and that are an integral part of the company’s operations to entities in which the company has a substantial investment that do not provide information processing services to other entities;

  • (d) outside Canada, or with the prior written approval of the Minister, in Canada, engage in any of the following activities, namely,

    • (i) collecting, manipulating and transmitting

      • (A) information that is primarily financial or economic in nature,

      • (B) information that relates to the business of a permitted entity, as defined in subsection 490(1), or

      • (C) any other information that the Minister may, by order, specify,

    • (ii) providing advisory or other services in the design, development or implementation of information management systems,

    • (iii) designing, developing or marketing computer software, and

    • (iv) designing, developing, manufacturing or selling, as an ancillary activity to any activity referred to in any of subparagraphs (i) to (iii) that the company is engaging in, computer equipment integral to the provision of information services related to the business of financial institutions or to the provision of financial services;

  • (d.1) with the prior written approval of the Minister, develop, design, hold, manage, manufacture, sell or otherwise deal with data transmission systems, information sites, communication devices or information platforms or portals that are used

    • (i) to provide information that is primarily financial or economic in nature,

    • (ii) to provide information that relates to the business of a permitted entity, as defined in subsection 490(1), or

    • (iii) for a prescribed purpose or in prescribed circumstances;

  • (e) promote merchandise and services to the holders of any payment, credit or charge card issued by the company;

  • (f) engage in the sale of

    • (i) tickets, including lottery tickets, on a non-profit public service basis in connection with special, temporary and infrequent non-commercial celebrations or projects that are of local, municipal, provincial or national interest,

    • (ii) urban transit tickets, and

    • (iii) tickets in respect of a lottery sponsored by the federal government or a provincial or municipal government or an agency of any such government or governments;

  • (g) act as a custodian of property;

  • (h) with the consent of the Minister

    • (i) provide safety and risk prevention services and services respecting risk management and claims adjustment, where the provision of those services is reasonably ancillary to the business of insurance carried on by the company,

    • (ii) operate rehabilitation and training and development centres, where the operation of those centres is reasonably ancillary to the business of insurance carried on by the company,

    • (iii) provide computer systems to independent insurance brokers and agents, where the provision of those systems is reasonably ancillary to the business of insurance carried on by the company,

    • (iv) provide support to independent insurance brokers and agents, where the provision of that support is reasonably ancillary to the business of insurance carried on by the company,

    • (v) operate repair and appraisal centres, where the operation of those centres is reasonably ancillary to the business of insurance carried on by the company, and

    • (vi) carry on any other activities that are reasonably ancillary to the business of insurance carried on by the company; and

  • (i) provide identification, authentication or verification services.

• Marginal note:Additional activities — life companies

  (1.1) A life company may engage, under prescribed terms and conditions, if any are prescribed, in specialized business management or advisory services.

• Marginal note:Terms and conditions

  (2) A consent given under paragraph (1)(h) is subject to the terms and conditions imposed by the Minister.

• Marginal note:Restriction

  (3) Except as authorized by or under this Act, a company shall not deal in goods, wares or merchandise or engage in any trade or other business.

• Marginal note:Regulations

  (4) The Governor in Council may make regulations

  • (a) respecting what a company may or may not do with respect to the carrying on of the activities referred to in any of paragraphs (1)(d) and (d.1) and subsection (1.1);

  • (b) imposing terms and conditions in respect of

    • (i) the provision of services referred to in paragraphs (1)(a) and 440(2)(b), and

    • (ii) the carrying on of the activities referred to in any of paragraphs (1)(d) and (d.1) and subsection (1.1); and

  • (c) respecting the circumstances in which companies may be exempted from the requirement to obtain the approval of the Minister before carrying on a particular activity referred to in paragraph (1)(d) or (d.1).

Marginal note:Networking

• 442 (1) A company may

  • (a) act as agent for any person in respect of the provision of any service that is provided by a financial institution, a permitted entity as defined in subsection 490(1) or a prescribed entity;

  • (b) enter into an arrangement with any person in respect of the provision of that service; or

  • (c) refer any person to any such financial institution or entity.

• Marginal note:Regulations

  (2) The Governor in Council may make regulations respecting the disclosure of

  • (a) the name of the principal for whom a company is acting as agent pursuant to subsection (1); and

  • (b) whether any commission is being earned by a company when acting as agent pursuant to subsection (1).

Classes of Insurance

Marginal note:Restriction to specified classes of insurance

• 443 (1) A company shall not insure a risk unless the risk falls within a class of insurance that is specified in the order of the Superintendent approving the commencement and carrying on of business by the company.

• Marginal note:Continuation of certificate limitations

  (2) A class of insurance specified in a certificate of registry, issued under Part III of the Canadian and British Insurance Companies Act, or in any other authorization, that had not expired or been withdrawn before the coming into force of this Part is deemed to be specified in an order of the Superintendent approving the commencement and carrying on of business by the company.

Marginal note:Restriction to reinsurance

• 444 (1) A company may reinsure, but shall not otherwise insure, a risk falling within a class of insurance specified in the order of the Superintendent approving the commencement and carrying on of business by the company if the order limits the company to the reinsurance of those risks.

• Marginal note:Continuation of certificate conditions

  (2) A condition that limits a company to the reinsurance of risks falling within a class of insurance and that is contained in a certificate of registry issued under Part III of the Canadian and British Insurance Companies Act, or in any other authorization, that had not expired or been withdrawn before the coming into force of this Part is deemed to be a limitation in an order of the Superintendent approving the commencement and carrying on of business by the company.

Marginal note:No new composite companies

445 The Superintendent may not make or vary an order approving the commencement and carrying on of business by a company if the company would as a result be permitted to insure both risks falling within the class of life insurance and risks falling within any other class of insurance other than accident and sickness insurance, credit protection insurance and other approved products insurance.

446 [Repealed, 2007, c. 6, s. 218]

Marginal note:Separate accounts

447 A company that is authorized to insure risks falling within the class of life insurance and risks falling within one or more other classes of insurance shall maintain separate accounts in respect of each class of insurance within which it is authorized to insure risks.

Marginal note:Annuities and endowment insurance restricted to life companies

448 Property and casualty companies and marine companies shall not issue annuities or policies of endowment insurance.

Marginal note:Compensation association

• 449 (1) Every company that is insuring risks that fall within a class of insurance shall become and remain a member of any compensation association designated by order of the Minister for that class of insurance.

• Marginal note:Designation limitation

  (1.1) A compensation association shall not be designated under subsection (1) unless, in the opinion of the Minister, it has the authority to levy an assessment on each of its members.

• Marginal note:Exceptions

  (2) Subsection (1) does not apply

  • (a) to a company that may reinsure but may not otherwise insure risks;

  • (b) in respect of a class of insurance that, in the opinion of the Minister, is adequately covered by some other compensation plan;

  • (c) in respect of the insurance against the loss of, or damage to, property caused by fire, by lightning, by an explosion due to ignition, by smoke or by breakage of or leakage from a sprinkler, from other fire protection equipment or from another fire protection system by a company that is a member of the Fire Mutuals Guarantee Fund; or

  • (d) in respect of a class of insurance for which the Minister has not designated a compensation association.

Segregated Funds

Marginal note:Segregated funds restricted to life companies

450 A property and casualty company, or a marine company, shall not issue policies — or accept or retain, on the direction of a policyholder or beneficiary, policy dividends or bonuses, or policy proceeds that are payable on the surrender or maturity of the policy or on the death of the person whose life is insured — if the liabilities of the company in respect of the policies or the amounts accepted or retained vary in amount depending on the market value of a fund consisting of a specified group of assets.

Marginal note:Where segregated funds required

451 A life company that issues policies described in section 450 or accepts or retains amounts so described shall, in respect of those policies or amounts,

• (a) maintain separate accounts; and

• (b) establish and maintain one or more funds consisting of assets that are segregated from the other assets of the company and that are specified as the assets on the market value of which the liabilities of the company in respect of those policies or amounts depend.

Marginal note:Establishment and maintenance of segregated funds

452 For the purpose of establishing or maintaining a segregated fund required to be established and maintained by section 451, a company may, subject to the regulations and, in the case of a transfer from a participating account maintained pursuant to section 456, to section 463, transfer an amount to the separate account maintained in respect of the segregated fund.

Marginal note:Transfers from segregated funds

453 A company may return the current value of an amount transferred under section 452 to the account from which the amount was transferred.

Marginal note:Claims against segregated funds

454 A claim against a segregated fund maintained as required by section 451 under a policy or for an amount in respect of which the fund is maintained has priority over any other claim against the assets of that fund, including the claims referred to in section 161 of the Winding-up and Restructuring Act, except to the extent that the payment of that other claim is secured by a security interest in or on a specific, identifiable asset of the segregated fund.