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

Marginal note:Restriction of claims

595 The liability of a foreign company under a policy or for an amount in respect of which a segregated fund is maintained pursuant to section 593

• (a) does not, except to the extent that the assets of the fund are insufficient to satisfy a claim for any minimum amount that the foreign company agrees to pay under the policy or in respect of the amount, give rise to a claim against any assets in Canada of the foreign company, other than the assets of that fund,

but

• (b) to the extent that the assets of the fund are insufficient to satisfy such a claim, gives rise to a claim against the assets in Canada of the foreign company, other than the assets of that fund, that has the priority referred to in subsection 161(2) of the Winding-up and Restructuring Act.

Reinsurance

Marginal note:Regulations

• 596 (1) The Governor in Council may make regulations limiting the extent to which foreign companies may cause themselves to be reinsured against risks undertaken under their policies.

• Marginal note:Regulation may provide for discretion

  (2) A regulation made pursuant to subsection (1) may provide that the Superintendent may, by order, determine the matters or exercise the discretion that the regulation may specify.

Marginal note:Restriction re related parties

• 597 (1) Except with the approval of the Superintendent, a foreign company may cause itself to be reinsured, in respect of risks undertaken under its policies, by a related party of the foreign company only if the related party is

  • (a) a company; or

  • (b) a foreign company that, in Canada, reinsures those risks.

• Meaning of related party

  (2) For the purposes of this section, related party, in relation to a foreign company, means a related party within the meaning of Part XI, with such modifications as the circumstances require.

Borrowing Costs

Definition of cost of borrowing

598 For the purposes of this section and sections 598.1 to 605, cost of borrowing means, in respect of a loan or an advance on the security or against the cash surrender value of a policy made by a foreign company,

• (a) the interest or discount applicable to the loan or advance;

• (b) any amount charged in connection with the loan or advance that is payable by the borrower to the foreign company; and

• (c) any charge prescribed to be included in the cost of borrowing.

For those purposes, however, cost of borrowing does not include any charge prescribed to be excluded from the cost of borrowing.

Marginal note:Rebate of borrowing costs

• 598.1 (1) Where a foreign company makes a loan in respect of which the disclosure requirements of section 599 apply, and the loan is not secured by a mortgage on real property and is required to be repaid either on a fixed future date or by instalments, the foreign company shall, if there is a prepayment of the loan, rebate to the borrower a portion of the charges included in the cost of borrowing in respect of the loan.

• Marginal note:Exception

  (2) The charges to be rebated do not include the interest or discount applicable to the loan.

• Marginal note:Regulations

  (3) The Governor in Council may make regulations governing the rebate of charges under subsection (1). The rebate shall be made in accordance with those regulations.

Marginal note:Disclosing borrowing costs

• 599 (1) A foreign company shall not include in its assets in Canada any loan to a natural person that is repayable in Canada unless the cost of borrowing, as calculated and expressed in accordance with section 600, and other prescribed information have been disclosed by the foreign company to the borrower at the prescribed time and place and in the prescribed form and manner.

• Marginal note:Non-application

  (2) Subsection (1) does not apply in respect of a loan that is of a prescribed class of loans.

Marginal note:Calculating borrowing costs

600 The cost of borrowing shall be calculated, in the prescribed manner, on the basis that all obligations of the borrower are duly fulfilled and shall be expressed as a rate per annum and, in prescribed circumstances, as an amount in dollars and cents.

Marginal note:Additional disclosure

• 601 (1) Where a foreign company makes a loan in respect of which the disclosure requirements of section 599 are applicable and the loan is required to be repaid either on a fixed future date or by instalments, the foreign company shall disclose to the borrower, in accordance with the regulations,

  • (a) whether the borrower has the right to repay the amount borrowed before the maturity of the loan and, if applicable,

    • (i) any terms and conditions relating to that right, including the particulars of the circumstances in which the borrower may exercise that right, and

    • (ii) whether, in the event that the borrower exercises the right, any portion of the cost of borrowing is to be rebated, the manner in which any such rebate is to be calculated or, if a charge or penalty will be imposed on the borrower, the manner in which the charge or penalty is to be calculated;

  • (b) in the event that an amount borrowed is not repaid at maturity or, if applicable, an instalment is not paid on the day the instalment is due to be paid, particulars of the charges or penalties to be paid by the borrower because of the failure to repay or pay in accordance with the contract governing the loan;

  • (c) at the prescribed time and place and in the prescribed form and manner, any changes respecting the cost of borrowing or the loan agreement;

  • (d) particulars of any other rights and obligations of the borrower; and

  • (e) any other prescribed information, at the prescribed time and place and in the prescribed form and manner.

• Marginal note:Disclosure in credit card applications

  (2) A foreign company shall, in accordance with the regulations, at the prescribed time and place and in the prescribed form and manner, provide prescribed information in any application forms or related documents that it prepares for the issuance of credit, payment or charge cards in Canada and provide prescribed information to any person applying to it in Canada for a credit, payment or charge card.

• Marginal note:Disclosure re credit cards

  (3) Where a foreign company issues in Canada or has issued in Canada a credit, payment or charge card to a natural person, the foreign company shall, in addition to disclosing the costs of borrowing in respect of any loan that is obtained through the use of the card and that is repayable in Canada, disclose to the person, in accordance with the regulations,

  • (a) any charges or penalties described in paragraph (1)(b);

  • (b) particulars of the person’s rights and obligations;

  • (c) any charges for which the person becomes responsible by accepting or using the card;

  • (d) at the prescribed time and place and in the prescribed form and manner, any prescribed changes respecting the cost of borrowing or the loan agreement; and

  • (e) any other prescribed information, at the prescribed time and place and in the prescribed form and manner.

• Marginal note:Additional disclosure re other loans

  (4) Where a foreign company enters into or has entered into an arrangement, including a line of credit, for the making of a loan in respect of which the disclosure requirements of section 599 apply and the loan is not one in respect of which subsection (1) or (3) applies, the foreign company shall, in addition to disclosing the costs of borrowing, disclose to the person, in accordance with the regulations,

  • (a) any charges or penalties described in paragraph (1)(b);

  • (b) particulars of the person’s rights and obligations;

  • (c) any charges for which the person is responsible under the arrangement;

  • (d) at the prescribed time and place and in the prescribed form and manner, any prescribed changes respecting the cost of borrowing or the loan agreement; and

  • (e) any other prescribed information, at the prescribed time and place and in the prescribed form and manner.

Marginal note:Renewal statement

601.1 If a foreign company makes a loan in respect of which the disclosure requirements of section 599 apply and the loan is secured by a mortgage on real property, the foreign company shall disclose to the borrower, at the prescribed time and place and in the prescribed form and manner, any information that is prescribed respecting the renewal of the loan.

Marginal note:Disclosure in advertising

601.2 No person shall authorize the publication, issue or appearance of any advertisement in Canada relating to arrangements referred to in subsection 601(4), loans, credit cards, payment cards or charge cards, offered to natural persons by a foreign company, and purporting to disclose prescribed information about the cost of borrowing or about any other matter unless the advertisement discloses prescribed information at the prescribed time and place and in the prescribed form and manner.

Marginal note:Disclosing borrowing costs — advances

602 If regulations have been made respecting the manner in which the cost of borrowing is to be disclosed in respect of an advance on the security or against the cash surrender value of a policy, a foreign company shall not make such an advance unless the cost of borrowing, as calculated and expressed in accordance with the regulations, has, at the prescribed time and place and in the prescribed form and manner, been disclosed by the foreign company or otherwise as prescribed to the policyholder at or before the time when the advance is made.

Marginal note:Regulations re borrowing costs

603 The Governor in Council may make regulations

• (a) respecting the time and place at which, and the form and manner in which, a foreign company is to disclose to a borrower

  • (i) the cost of borrowing,

  • (ii) any rebate of the cost of borrowing, and

  • (iii) any other information relating to a loan, arrangement, credit card, payment card or charge card referred to in section 601;

• (b) respecting the contents of any statement disclosing the cost of borrowing and other information required to be disclosed by a foreign company to a borrower;

• (c) respecting the manner of calculating the cost of borrowing;

• (d) respecting the circumstances under which the cost of borrowing is to be expressed as an amount in dollars and cents;

• (e) specifying any class of loans that are not to be subject to section 598.1, subsection 599(1) or 601(1) or (4) or section 601.1 or 601.2 or the regulations or any specified provisions of the regulations;

• (f) specifying any class of advances that are not to be subject to section 602 or the regulations or any specified provisions of the regulations;

• (g) respecting the time and place at which, and the form and manner in which, any rights, obligations, charges or penalties referred to in sections 598.1 to 602 are to be disclosed;

• (h) prohibiting the imposition of any charge or penalty referred to in section 601 or providing that the charge or penalty, if imposed, will not exceed a prescribed amount;

• (i) respecting the nature or amount of any charge or penalty referred to in paragraph 601(1)(b), (3)(a) or (4)(a) and the costs of the foreign company that may be included or excluded in the determination of the charge or penalty;

• (j) respecting the method of calculating the amount of rebate of the cost of borrowing, or the portion of the cost of borrowing referred to in subparagraph 601(1)(a)(ii);

• (k) respecting advertisements made by a foreign company regarding arrangements referred to in subsection 601(4), loans, credit cards, payment cards or charge cards;

• (l) respecting the renewal of loans; and

• (m) respecting such other matters or things as are necessary to carry out the purposes of sections 598.1 to 602.

Complaints

Marginal note:Procedures for dealing with complaints

• 604 (1) A foreign company shall

  • (a) establish procedures for dealing with complaints made by persons having requested or received products or services in Canada from the foreign company;

  • (b) designate one of its officers or employees in Canada, or an agent in Canada, to be responsible for implementing those procedures; and

  • (c) designate one or more of its officers or employees in Canada, or agents in Canada, to receive and deal with those complaints.

• Marginal note:Procedures to be filed with Commissioner

  (2) A foreign company shall file with the Commissioner a copy of its procedures established under paragraph (1)(a).

• Marginal note:How procedures to be made available

  (3) A foreign company shall make its procedures established under paragraph (1)(a) available

  • (a) on its websites through which products or services are offered in Canada; and

  • (b) in written format to be sent to any person who requests them.

• Marginal note:Information on contacting Agency

  (4) A foreign company shall also make prescribed information on how to contact the Agency available whenever it makes its procedures established under paragraph (1)(a) available under subsection (3).

Marginal note:Obligation to be member of complaints body

604.1 In any province, if there is no law of the province that makes a foreign company subject to the jurisdiction of an organization that deals with complaints made by persons having requested or received products or services in the province from a foreign company, the foreign company shall be a member of an organization in Canada that is not controlled by it and that deals with those complaints that have not been resolved to the satisfaction of the persons under procedures established under paragraph 604(1)(a).

Marginal note:Information on contacting Agency

• 605 (1) A foreign company shall, in accordance with the regulations, at the prescribed time and place and in the prescribed form and manner, provide a person in Canada requesting or receiving a product or service in Canada from it with prescribed information on how to contact the Agency if the person has a complaint about an arrangement referred to in subsection 601(3), a payment, credit or charge card referred to in subsection 601(2), the disclosure of or manner of calculating the cost of borrowing in respect of a loan repayable in Canada or an advance on the security or against the cash surrender value of a policy, or about any other obligation of the foreign company under a consumer provision.

• Marginal note:Report

  (2) The Commissioner shall prepare a report, to be included in the report referred to in section 34 of the Financial Consumer Agency of Canada Act, respecting

  • (a) procedures for dealing with complaints established by foreign companies pursuant to paragraph 604(1)(a); and

  • (b) the number and nature of complaints that have been brought to the attention of the Agency by persons who have requested or received a product or service from a foreign company.