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

Marginal note:Restriction on charges to borrowers

• 542.061 (1) Subject to any regulations made under subsection (2), a society that has obtained insurance or a guarantee against default on a loan made in Canada on the security of residential property shall not charge a borrower an amount for the insurance or guarantee that exceeds the actual cost to the society of the insurance or guarantee.

• Marginal note:Regulations

  (2) The Governor in Council may make regulations

  • (a) respecting the determination of the actual cost to a society for the purposes of subsection (1);

  • (b) respecting the circumstances in which a society is exempt from the application of subsection (1);

  • (c) respecting, in relation to insurance or a guarantee against default on a loan made by a society in Canada on the security of residential property,

    • (i) the arrangements into which the society, its representatives and its employees may or may not enter, and

    • (ii) the payments or benefits that the society, its representatives and its employees may or may not accept from an insurer or the insurer’s affiliates; and

  • (d) respecting any other matters necessary to carry out the purposes of subsection (1).

• Marginal note:Regulations — disclosure

  (3) The Governor in Council may make regulations respecting the disclosure by a society of information relating to insurance or a guarantee against default on a loan made by the society in Canada on the security of residential property, including regulations respecting

  • (a) the information that must be disclosed, including information relating to

    • (i) the person who benefits from the insurance or guarantee,

    • (ii) the arrangements between the society, its representatives or its employees and the insurer or the insurer’s affiliates, and

    • (iii) the payments and benefits that the society, its representatives and its employees accept from an insurer or the insurer’s affiliates;

  • (b) the time and place at which, the form and manner in which and the persons to whom information is to be disclosed; and

  • (c) the circumstances under which a society is not required to disclose information.

Marginal note:Policies re security interests

• 542.07 (1) The directors of a society shall establish and the society shall adhere to policies regarding the creation of security interests in property of the society to secure obligations of the society and the acquisition by the society of beneficial interests in property that is subject to security interests.

• Marginal note:Order to amend policies

  (2) The Superintendent may, by order, direct a society to amend its policies as specified in the order.

• Marginal note:Compliance

  (3) A society shall comply with an order made under subsection (2) within the time specified in the order.

Marginal note:Regulations and guidelines

542.071 The Governor in Council may make regulations and the Superintendent may make guidelines respecting the creation by a society of security interests in its property to secure obligations of the society and the acquisition by the society of beneficial interests in property that is subject to security interests.

Marginal note:Restriction on receivers

542.08 A society shall not grant to a person the right to appoint a receiver or a receiver and manager of the property or business of the society.

Marginal note:Restriction on partnerships

542.09 Except with the approval of the Superintendent, a society may not be a general partner in a limited partnership or a partner in any partnership other than a limited partnership.

Marginal note:General restriction

• 542.1 (1) A society shall not, and shall not permit its prescribed subsidiaries to, enter into any debt obligation, within the meaning assigned to that expression by the regulations, or permit its prescribed subsidiaries to issue any share, other than a common share, if as a result the aggregate of the total debt obligations of the society, determined in the prescribed manner, and the stated capital of the society would exceed the prescribed percentage of the total assets of the society.

• Marginal note:Exception

  (2) A society need not include in the aggregate amount calculated for the purpose of subsection (1) the value of any debt obligation or the stated capital of any shares if the value of the debt obligation or the stated capital of the shares is included as part of the regulatory capital of the society.

Marginal note:Restriction on guarantees

• 542.11 (1) A society shall not guarantee on behalf of any person the payment or repayment of any sum of money unless

  • (a) the sum of money is a fixed sum of money with or without interest on it; and

  • (b) the person on whose behalf the society has undertaken to guarantee the payment or repayment has an unqualified obligation to reimburse the society for the full amount of the payment or repayment to be guaranteed.

• Marginal note:Exception

  (2) Paragraph (1)(a) does not apply where the person on whose behalf the society has undertaken to guarantee a payment or repayment is a subsidiary of the society.

• Marginal note:Regulations

  (3) The Governor in Council may make regulations imposing terms and conditions in respect of guarantees permitted by this section.

Marginal note:Prepayment protected

• 542.12 (1) A society shall not make a loan to a natural person if the loan would be repayable in Canada and the terms would prohibit prepayment of the money advanced or any instalment of that money before its due date.

• Marginal note:Non-application of subsection (1)

  (2) Subsection (1) does not apply in respect of a loan

  • (a) that is secured by a mortgage on real property; or

  • (b) that is made for business purposes and the principal amount of which is more than $100,000 or such other amount as may be prescribed.

Corporate Governance

Marginal note:Majority to reside in Canada

543 A majority of the members of the supreme governing body of every society shall at the time of their election or appointment be individuals who are resident in Canada.

Marginal note:Head office

• 544 (1) A society shall at all times have a head office in the province specified in its incorporating instrument or by-laws.

• Marginal note:Change of head office — different province

  (2) Despite anything contained in its incorporating instrument, any society may, by by-law passed and approved by the votes of at least two thirds of the members entitled to vote by the by-laws of the society who are present or represented at a special meeting duly called for considering the by-law, change the head office of the society from one province to another.

• Marginal note:Change of head office — within a province

  (2.1) The supreme governing body of a society may, by resolution passed and approved by at least two thirds of the votes cast at a meeting, change the address of the head office within the province specified in the society’s by-laws.

• Marginal note:Notice of change of address

  (2.2) If there is a change of address of the head office of a society, the society shall send a notice of the change to the Superintendent within fifteen days after the change.

• Marginal note:Maximum period

  (3) A society shall establish by by-law the maximum period of time within which meetings of the society shall be held.

Marginal note:Change of name

• 544.1 (1) Despite anything contained in its incorporating instrument, a society may, by by-law passed and approved by the votes of at least two thirds of the members entitled to vote by the by-laws of the society who are present or represented at a special meeting duly called for considering the by-law, change the name of the society.

• Marginal note:Effective date

  (2) A by-law referred to in subsection (1) is not effective until the Superintendent approves it.

Marginal note:Appointing proxyholder

• 545 (1) A member who is entitled to vote by by-law of a society may, if the by-laws of the society so provide, by executing an instrument of proxy, appoint a proxyholder or one or more alternate proxyholders, who are not required to be members of the society, to attend and act at the meeting in the manner and to the extent authorized by the proxy and with the authority conferred by the proxy.

• Marginal note:Validity of proxies

  (2) An instrument of proxy is not valid at a meeting of a society unless it is filed with the secretary of the society at least ten days before the date of the meeting and it may be revoked at any time.

• Marginal note:Societies to inform members of rights

  (3) A society for which an order approving the commencement and carrying on of business of life insurance has been made under this Act that has members who are entitled to vote at meetings of the society shall advise each of those members at least once a year by means of a statement printed in prominent type on a premium notice, premium receipt or dividend notice or otherwise, of the rights of the member to attend and to vote in person or by proxy at those meetings and to obtain a blank instrument of proxy on request therefor in writing to the secretary of the society, but in the case of a member who is not in receipt of a regular annual premium notice from the society, notice of the rights of the member to attend and to vote at meetings of the society may be given only at least once every five years.

Marginal note:Valuation balance sheet to be sent to members

546 Every society for which an order approving the commencement and carrying on of business has been made under this Act shall, not later than June 1 in each year, mail to each member of the society a copy of the valuation balance sheet in the prescribed form and an explanation of the facts concerning the condition of the society or, in lieu thereof, shall publish in its official paper that balance sheet and explanation and mail a copy of the issue of the paper containing the balance sheet and explanation to each of the society’s members.

Marginal note:Auditors and actuaries

• 547 (1) Divisions XIII and XIV of Part VI apply to societies with such modifications as the circumstances require.

• Marginal note:Appointment of actuary

  (2) The directors of a former-Act society shall, forthwith after the coming into force of this Part, appoint the actuary of the society.

Marginal note:By-laws

• 548 (1) Unless this Act otherwise provides, the supreme governing body of a society may by resolution make, amend or repeal any by-law that regulates the business or affairs of the society.

• Marginal note:Deemed by-laws

  (2) Any matter provided for in the incorporating instrument of a former-Act society on the coming into force of this Part that, under this Act, would be provided for in the by-laws of a society is deemed to be provided for in the by-laws of the society.

• Marginal note:Copies to Superintendent

  (3) Within thirty days after a by-law of a society comes into effect or is amended, the society shall send a copy of the by-law or the amendment to the Superintendent. A society shall send to the Superintendent, within six months after the coming into force of this subsection, its by-laws that are in effect on the coming into force of this subsection.

Marginal note:Return

• 549 (1) Every society shall, each year before June 30 of that year, provide the Superintendent with a return showing

  • (a) the name, residence and citizenship of each director of the society;

  • (b) the mailing address of each director;

  • (c) the bodies corporate of which each director referred to in paragraph (a) is an officer or director and the firms of which each director is a member;

  • (d) the names of the directors referred to in paragraph (a) who are officers or employees of the society, and the positions they occupy;

  • (e) the date of expiration of the term of each director referred to in paragraph (a); and

  • (f) the name, address and date of appointment of the auditor of the society.

• Marginal note:Information

  (2) Where

  • (a) any information relating to a director or auditor of a society shown in the latest return made to the Superintendent under subsection (1), other than information referred to in paragraph (1)(c), becomes inaccurate or incomplete,

  • (b) a vacancy in the position of auditor of the society occurs or is filled by another person, or

  • (c) a vacancy on the supreme governing body of the society occurs or is filled,

  the society shall forthwith provide the Superintendent with such information as is required to maintain the return in a complete and accurate form.

Marginal note:Sections 261, 262 and 266 to 270 apply

• 549.1 (1) Sections 261, 262 and 266 to 270 apply to societies, with the modifications that the circumstances require.

• Marginal note:For greater certainty

  (2) For greater certainty, subsection 262(3.1) does not apply to societies.

Investments

Application

Marginal note:Non-application of sections 551 to 570

550 Sections 551 to 570 do not apply in respect of

• (a) any interest in real property arising through the holding of a security interest in real property;

• (b) any interest in an entity arising through the holding of a security interest in securities of that entity; or

• (c) assets of a segregated fund maintained as required by subsection 542.03(2).