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

Act current to 2021-06-03 and last amended on 2019-06-17. Previous Versions

PART VICorporate Governance (continued)

DIVISION XIIIAuditors

Interpretation

Marginal note:Definitions

 In this Division,

firm of accountants

firm of accountants means a partnership, the members of which are accountants engaged in the practice of accounting, or a body corporate that is incorporated by or under an Act of the legislature of a province and engaged in the practice of accounting; (cabinet de comptables)

member

member, in relation to a firm of accountants, means

  • (a) an accountant who is a partner in a partnership, the members of which are accountants engaged in the practice of accounting, or

  • (b) an accountant who is an employee of a firm of accountants. (membre)

Appointment

Marginal note:Appointment of auditor

  •  (1) The shareholders and policyholders of a company shall, by ordinary resolution at the first meeting of shareholders and policyholders and at each succeeding annual meeting, appoint an auditor to hold office until the close of the next annual meeting.

  • Marginal note:Remuneration of auditor

    (2) The remuneration of an auditor may be fixed by ordinary resolution of the shareholders and policyholders but, if not so fixed, shall be fixed by the directors.

Qualifications

Marginal note:Qualification of auditor

  •  (1) A natural person or firm of accountants is qualified to be an auditor of a company if

    • (a) in the case of a natural person, the person is an accountant who

      • (i) is a member in good standing of an institute or association of accountants incorporated by or under an Act of the legislature of a province,

      • (ii) has at least five years experience at a senior level in performing audits of a financial institution,

      • (iii) is ordinarily resident in Canada, and

      • (iv) is independent of the company; and

    • (b) in the case of a firm of accountants, the member of the firm jointly designated by the firm and the company to conduct the audit of the company on behalf of the firm is qualified in accordance with paragraph (a).

  • Marginal note:Independence

    (2) For the purposes of subsection (1),

    • (a) independence is a question of fact; and

    • (b) a person is deemed not to be independent of a company if that person, a business partner of that person or a firm of accountants of which that person is a member

      • (i) is a business partner, director, officer or employee of the company or of any affiliate of the company or is a business partner of any director, officer or employee of the company or of any affiliate of the company,

      • (ii) beneficially owns or controls, directly or indirectly, a material interest in the shares of the company or of any affiliate of the company, or

      • (iii) has been a liquidator, trustee in bankruptcy, receiver or receiver and manager of any affiliate of the company within the two years immediately preceding the person’s proposed appointment as auditor of the company, other than an affiliate that is a subsidiary of the company acquired pursuant to section 499 or through a realization of security pursuant to section 500.

  • Marginal note:Business partners

    (2.1) For the purposes of subsection (2),

    • (a) in the case of the appointment of a natural person as the auditor of a company, a business partner of the person includes a shareholder of the business partner; and

    • (b) in the case of the appointment of a firm of accountants as the auditor of a company, a business partner of a member of the firm includes another member of the firm and a shareholder of the firm or of a business partner of the member.

  • Marginal note:Notice of designation

    (3) Within fifteen days after the appointment of a firm of accountants as auditor of a company, the company and the firm of accountants shall jointly designate a member of the firm who meets the qualifications described in subsection (1) to conduct the audit of the company on behalf of the firm and the company shall forthwith notify the Superintendent in writing of the designation.

  • Marginal note:New designation

    (4) Where for any reason a member of a firm of accountants designated pursuant to subsection (3) ceases to conduct the audit of the company, the company and the firm of accountants may jointly designate another member of the same firm of accountants who meets the qualifications described in subsection (1) to conduct the audit of the company and the company shall forthwith notify the Superintendent in writing of the designation.

  • Marginal note:Deemed vacancy

    (5) In any case where subsection (4) applies and a designation is not made pursuant to that subsection within thirty days after the designated member ceases to conduct the audit of the company, there shall be deemed to be a vacancy in the office of auditor of the company.

  • 1991, c. 47, s. 338
  • 2001, c. 9, s. 400
  • 2005, c. 54, s. 287

Marginal note:Duty to resign

  •  (1) An auditor who ceases to be qualified under section 338 shall resign forthwith after the auditor, where the auditor is a natural person, or any member of the firm of accountants, where the auditor is a firm of accountants, becomes aware that the auditor or the firm has ceased to be so qualified.

  • Marginal note:Disqualification order

    (2) Any interested person may apply to a court for an order declaring that an auditor of a company has ceased to be qualified under section 338 and declaring the office of auditor to be vacant.

Vacancies

Marginal note:Revocation of appointment

  •  (1) The shareholders and policyholders of a company may, by ordinary resolution at a special meeting, revoke the appointment of an auditor.

  • Marginal note:Idem

    (2) The Superintendent may at any time revoke the appointment of an auditor made under subsection (3) or 337(1) or section 342 by notice in writing signed by the Superintendent and sent by registered mail to the auditor and to the company addressed to the usual place of business of the auditor and the company.

  • Marginal note:Filling vacancy

    (3) A vacancy created by the revocation of the appointment of an auditor under subsection (1) may be filled at the meeting at which the appointment was revoked and, if not so filled, shall be filled by the directors under section 342.

Marginal note:Ceasing to hold office

  •  (1) An auditor of a company ceases to hold office when

    • (a) the auditor resigns;

    • (b) the auditor, where the auditor is a natural person, dies; or

    • (c) the appointment of the auditor is revoked by the shareholders and policyholders or the Superintendent.

  • Marginal note:Effective date of resignation

    (2) The resignation of an auditor becomes effective at the time a written resignation is sent to the company or at the time specified in the resignation, whichever is later.

Marginal note:Filling vacancy

  •  (1) Subject to subsection 340(3), where a vacancy occurs in the office of auditor of a company, the directors shall forthwith fill the vacancy, and the auditor so appointed holds office for the unexpired term of office of the predecessor of that auditor.

  • Marginal note:Where Superintendent may fill vacancy

    (2) Where the directors fail to fill a vacancy in accordance with subsection (1), the Superintendent may fill the vacancy and the auditor so appointed holds office for the unexpired term of office of the predecessor of that auditor.

  • Marginal note:Designation of member of firm

    (3) Where the Superintendent has, pursuant to subsection (2), appointed a firm of accountants to fill a vacancy, the Superintendent shall designate the member of the firm who is to conduct the audit of the company on behalf of the firm.

Marginal note:Right to attend meetings

  •  (1) The auditor of a company is entitled to receive notice of every meeting of shareholders or policyholders and, at the expense of the company, to attend and be heard at those meetings on matters relating to the duties of the auditor.

  • Marginal note:Duty to attend meeting

    (2) If a director, a shareholder of a company, whether or not the shareholder is entitled to vote at the meeting, or a policyholder who is entitled to vote at the meeting gives written notice, not less than ten days before a meeting of shareholders or policyholders, to an auditor or former auditor of the company that the director, shareholder or policyholder wishes the auditor’s attendance at the meeting, the auditor or former auditor shall attend the meeting at the expense of the company and answer questions relating to the auditor’s or former auditor’s duties as auditor.

  • Marginal note:Notice to company

    (3) A director, shareholder or policyholder who gives notice under subsection (2) shall send concurrently a copy of the notice to the company and the company shall forthwith send a copy thereof to the Superintendent.

  • Marginal note:Superintendent may attend

    (4) The Superintendent may attend and be heard at any meeting referred to in subsection (2).

 
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