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

Amendments — By-laws

Marginal note:By-laws

• 851 (1) The directors of an insurance holding company may make, amend or repeal any by-laws, in the manner set out in subsections (2) and (3) and sections 852 to 856, to

  • (a) change the maximum number, if any, of shares of any class that the insurance holding company is authorized to issue;

  • (b) create new classes of shares;

  • (c) change the designation of any or all of the insurance holding company’s shares, and add, change or remove any rights, privileges, restrictions and conditions, including rights to accrued dividends, in respect of any or all of the insurance holding company’s shares, whether issued or unissued;

  • (d) change the shares of any class or series, whether issued or unissued, into a different number of shares of the same class or series or into the same or a different number of shares of other classes or series;

  • (e) divide a class of shares, whether issued or unissued, into series and fix the maximum number of shares, if any, in each series and the rights, privileges, restrictions and conditions attached thereto;

  • (f) authorize the directors to divide any class of unissued shares into series and fix the maximum number of shares, if any, in each series and the rights, privileges, restrictions and conditions attached thereto;

  • (g) authorize the directors to change the rights, privileges, restrictions and conditions attached to unissued shares of any series;

  • (h) revoke, diminish or enlarge any authority conferred under paragraphs (f) and (g);

  • (i) increase or decrease the number of directors, subject to subsection 796(1) and section 803;

  • (j) change the name of the insurance holding company; or

  • (k) change the place in Canada where the head office of the insurance holding company is to be situated.

• Marginal note:Shareholder approval

  (2) The directors shall submit a by-law, or an amendment to or a repeal of a by-law, that is made under subsection (1) to the shareholders entitled to vote, and the shareholders may, by special resolution, confirm, amend or reject the by-law, amendment or repeal.

• Marginal note:Effective date of by-law

  (3) A by-law, or an amendment to or a repeal of a by-law, made under subsection (1) is not effective until it is confirmed or confirmed as amended by the shareholders under subsection (2) and, in the case of by-laws referred to in paragraph (1)(j), approved by the Superintendent in writing.

Marginal note:Class vote

• 852 (1) The holders of shares of a class or, subject to subsection (2), of a series are, unless the by-laws otherwise provide in the case of an amendment to the by-laws referred to in paragraph (a), (b) or (e), entitled to vote separately as a class or series on a proposal to amend the by-laws to

  • (a) increase or decrease any maximum number of authorized shares of that class, or increase any maximum number of authorized shares of a class having rights or privileges equal or superior to the shares of that class;

  • (b) effect an exchange, reclassification or cancellation of all or part of the shares of that class;

  • (c) add, change or remove the rights, privileges, restrictions or conditions attached to the shares of that class and, without limiting the generality of the foregoing,

    • (i) remove or change prejudicially rights to accrued dividends or rights to cumulative dividends,

    • (ii) add, remove or change prejudicially redemption rights,

    • (iii) reduce or remove a dividend preference or a liquidation preference, or

    • (iv) add, remove or change prejudicially conversion privileges, options, voting, transfer or pre-emptive rights, or rights to acquire securities of the insurance holding company, or sinking fund provisions;

  • (d) increase the rights or privileges of any class of shares having rights or privileges equal or superior to the shares of that class;

  • (e) create a new class of shares equal or superior to the shares of that class;

  • (f) make any class of shares having rights or privileges inferior to the shares of that class equal or superior to the shares of that class; or

  • (g) effect an exchange or create a right of exchange of all or part of the shares of another class into the shares of that class.

• Marginal note:Right limited

  (2) The holders of a series of shares of a class are entitled to vote separately as a series under subsection (1) if that series is affected by an addition or amendment to the by-laws in a manner different from other shares of the same class.

• Marginal note:Right to vote

  (3) Subsections (1) and (2) apply whether or not the shares of a class otherwise carry the right to vote.

Marginal note:Separate resolutions

853 A proposed addition or amendment to the by-laws referred to in subsection 852(1) is adopted when the holders of the shares of each class or series entitled to vote separately thereon as a class or series have approved the addition or amendment by a special resolution.

Marginal note:Revoking resolution

854 Where a special resolution referred to in subsection 851(2) so states, the directors may, without further approval of the shareholders, revoke the special resolution.

Marginal note:Proposal to amend

• 855 (1) Subject to subsection (2), a director or a shareholder who is entitled to vote at an annual meeting of shareholders of an insurance holding company may, in accordance with sections 770 and 771, make a proposal to make an application referred to in section 849 or to make, amend or repeal the by-laws referred to in subsection 851(1) of the insurance holding company.

• Marginal note:Notice of amendment

  (2) Notice of a meeting of shareholders at which a proposal to amend the incorporating instrument or to make, amend or repeal the by-laws of an insurance holding company to effect any of the changes referred to in subsection 851(1) is to be considered must set out the proposal.

Marginal note:Rights preserved

856 No amendment to the incorporating instrument or by-laws of an insurance holding company affects an existing cause of action or claim or liability to prosecution in favour of or against the insurance holding company or its directors or officers, or any civil, criminal or administrative action or proceeding to which the insurance holding company or any of its directors or officers are a party.

Amalgamation

Marginal note:Application to amalgamate

857 On the joint application of two or more bodies corporate incorporated by or under an Act of Parliament, including a company or an insurance holding company but not including a mutual company or a federal credit union, the Minister may issue letters patent amalgamating and continuing the applicants as one insurance holding company.

Marginal note:Amalgamation agreement

• 858 (1) Each applicant proposing to amalgamate shall enter into an amalgamation agreement.

• Marginal note:Contents of agreement

  (2) Every amalgamation agreement shall set out the terms and means of effecting the amalgamation and, in particular,

  • (a) the name of the amalgamated insurance holding company and the province in which its head office is to be situated;

  • (b) the name and place of ordinary residence of each proposed director of the amalgamated insurance holding company;

  • (c) the manner in which any shares of each applicant are to be converted into shares or other securities of the amalgamated insurance holding company;

  • (d) if any shares of an applicant are not to be converted into shares or other securities of the amalgamated insurance holding company, the amount of money or securities that the holders of those shares are to receive in addition to or in lieu of shares or other securities of the amalgamated insurance holding company;

  • (e) the manner of payment of money in lieu of the issue of fractional shares of the amalgamated insurance holding company or of any other body corporate that are to be issued in the amalgamation;

  • (f) the proposed by-laws of the amalgamated insurance holding company;

  • (g) details of any other matter necessary to perfect the amalgamation and to provide for the subsequent management and operation of the amalgamated insurance holding company; and

  • (h) the proposed effective date of the amalgamation.

• Marginal note:Cross ownership of shares

  (3) If shares of one of the applicants are held by or on behalf of another of the applicants, other than shares held in the capacity of a personal representative or by way of security, the amalgamation agreement must provide for the cancellation of those shares when the amalgamation becomes effective without any repayment of capital in respect thereof, and no provision shall be made in the agreement for the conversion of those shares into shares of the amalgamated insurance holding company.

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:Approval by shareholders

• 860 (1) The directors of each applicant shall submit an amalgamation agreement for approval to a meeting of the shareholders of the body corporate of which they are directors and to the holders of each class or series of shares.

• Marginal note:Right to vote

  (2) Each share of an applicant carries the right to vote in respect of an amalgamation agreement whether or not it otherwise carries the right to vote.

• Marginal note:Separate vote for class or series

  (3) The holders of shares of a class or series of shares of each applicant are entitled to vote separately as a class or series in respect of an amalgamation agreement if the agreement contains a provision that, if it were contained in a proposed amendment to the by-laws or incorporating instrument of the applicant, would entitle those holders to vote separately as a class or series.

• Marginal note:Special resolution

  (4) Subject to subsection (3), an amalgamation agreement is approved when it has been approved by special resolution by the shareholders of each applicant body corporate.

• Marginal note:Termination

  (5) An amalgamation agreement may provide that, at any time before the issue of letters patent of amalgamation, the agreement may be terminated by the directors of an applicant even though the agreement has been approved by the shareholders of all or any of the applicant bodies corporate.

Marginal note:Vertical short-form amalgamation

• 861 (1) An insurance holding company may, without complying with sections 858 to 860, amalgamate with one or more bodies corporate that

  • (a) are incorporated by or under an Act of Parliament, and

  • (b) are wholly-owned subsidiaries of the insurance holding company

  if

  • (c) the amalgamation is approved by a resolution of the directors of the insurance holding company and of each amalgamating subsidiary, and

  • (d) the resolutions provide that

    • (i) the shares of each amalgamating subsidiary will be cancelled without any repayment of capital in respect thereof,

    • (ii) the letters patent of amalgamation and the by-laws of the amalgamated insurance holding company will be the same as the incorporating instrument and the by-laws of the amalgamating insurance holding company that is the holding body corporate, and

    • (iii) no securities will be issued by the amalgamated insurance holding company in connection with the amalgamation.

• Marginal note:Horizontal short-form amalgamation

  (2) Two or more bodies corporate that

  • (a) are incorporated by or under an Act of Parliament, and

  • (b) are wholly-owned subsidiaries of the same holding body corporate

  may amalgamate and continue as one insurance holding company without complying with sections 858 to 860 if

  • (c) at least one of the applicants is an insurance holding company,

  • (d) the amalgamation is approved by a resolution of the directors of each of the applicants, and

  • (e) the resolutions provide that

    • (i) the shares of all applicants, except those of one of the applicants that is an insurance holding company, will be cancelled without any repayment of capital in respect thereof,

    • (ii) the letters patent of amalgamation and the by-laws of the amalgamated insurance holding company will be the same as the incorporating instrument and the by-laws of the amalgamating insurance holding company whose shares are not cancelled, and

    • (iii) the stated capital of the amalgamating insurance holding companies and bodies corporate whose shares are cancelled will be added to the stated capital of the amalgamating insurance holding company whose shares are not cancelled.

Marginal note:Joint application to Minister

• 862 (1) Subject to subsection (2), unless an amalgamation agreement is terminated in accordance with subsection 860(5), the applicants shall, within three months after the approval of the agreement in accordance with subsection 860(4) or the approval of the directors in accordance with subsection 861(1) or (2), jointly apply to the Minister for letters patent of amalgamation continuing the applicants as one insurance holding company.

• Marginal note:Conditions precedent to application

  (2) No application for the issue of letters patent under subsection (1) may be made unless

  • (a) notice of intention to make such an application has been published at least once a week for a period of four consecutive weeks in the Canada Gazette and in a newspaper in general circulation at or near the place where the head office of each applicant is situated; and

  • (b) the application is supported by satisfactory evidence that the applicants have complied with the requirements of this Part relating to amalgamations.

• Marginal note:Application of sections 709 to 711

  (3) Where two or more bodies corporate, none of which is an insurance holding company, apply for letters patent under subsection (1), sections 709 to 711 apply in respect of the application with such modifications as the circumstances require.

• Marginal note:Matters for consideration

  (4) Before issuing letters patent of amalgamation continuing the applicants as one insurance holding company, the Minister shall take into account all matters that the Minister considers relevant to the application, including

  • (a) the sources of continuing financial support for any company that will be a subsidiary of the amalgamated insurance holding company;

  • (b) the soundness and feasibility of the plans of the applicants for the future conduct and development of the business of any company that will be a subsidiary of the amalgamated insurance holding company;

  • (c) the business record and experience of the applicants;

  • (d) the reputation of the applicants for being operated in a manner that is consistent with the standards of good character and integrity;

  • (e) whether the amalgamated insurance holding company will be operated responsibly by persons with the competence and experience suitable for involvement in the operation of a financial institution;

  • (f) the impact of any integration of the operations and businesses of the applicants on the conduct of those operations and businesses;

  • (g) if the insurance holding company is an insurance holding company in respect of which subsection 927(5) applies or an insurance holding company in respect of which subsection 927(6) applied at any time, the opinion of the Superintendent regarding the extent to which the proposed corporate structure of the amalgamated insurance holding company and its affiliates may affect the supervision and regulation of any company that will be its subsidiary, having regard to

    • (i) the nature and extent of the proposed financial services activities to be carried out by the affiliates of the amalgamated insurance holding company, and

    • (ii) the nature and degree of supervision and regulation applying to the proposed financial services activities to be carried out by the affiliates of the amalgamated insurance holding company;

    and

  • (h) the best interests of the financial system in Canada.

• Marginal note:Restriction

  (5) The Minister may not, before January 1, 2002, issue letters patent under section 863 amalgamating a converted company in respect of which subsection 407(4) or (11) applies, a company to which subsection 407(5) or (12) applies or an insurance holding company to which subsection 407(6) or (13) applies with any other body corporate.

• Marginal note:Restriction

  (6) If one of the applicants for letters patent of amalgamation is a converted company in respect of which subsection 407(4) applies, or a company to which subsection 407(5) applies or an insurance holding company to which subsection 407(6) applies, the Minister may not issue the letters patent of amalgamation unless the amalgamated insurance holding company is widely held.

• Marginal note:Deeming

  (7) If one of the applicants for letters patent of amalgamation is a converted company in respect of which subsection 407(4) applies, a company to which subsection 407(5) applies or an insurance holding company to which subsection 407(6) applies and the letters patent of amalgamation are issued, the amalgamated insurance holding company is deemed to be an insurance holding company in respect of which subsection 927(4) applies.