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

Marginal note:Report on directors’ statement

• 906 (1) The auditor of an insurance holding company shall, if required by the shareholders, audit and report to them on any financial statement submitted to them by the directors, and the report shall state whether, in the auditor’s opinion, the financial statement presents fairly the information required by the shareholders.

• Marginal note:Sending report

  (2) A report of the auditor made under subsection (1) shall be attached to the financial statement to which it relates and a copy of the statement and report shall be sent by the directors to every shareholder and to the Superintendent.

Marginal note:Auditor of subsidiaries

• 907 (1) An insurance holding company shall take all necessary steps to ensure that

  • (a) its auditor is the auditor of each of its subsidiaries; and

  • (b) in the case of a subsidiary with more than one auditor, the auditor of the insurance holding company is one of the subsidiary’s auditors.

• Marginal note:Subsidiary outside Canada

  (2) Subsection (1) applies in the case of a subsidiary that carries on its operations in a country other than Canada unless the laws of that country do not permit the appointment of the auditor of the insurance holding company as the auditor of that subsidiary.

• Marginal note:Exception

  (3) Subsection (1) does not apply in respect of any particular subsidiary where the insurance holding company, after having consulted its auditor, is of the opinion that the total assets of the subsidiary are not a material part of the total assets of the insurance holding company.

Marginal note:Auditor’s attendance

• 908 (1) The auditor of an insurance holding company is entitled to receive notice of every meeting of the audit committee of the insurance holding company and, at the expense of the insurance holding company, to attend and be heard at that meeting.

• Marginal note:Attendance

  (2) If so requested by a member of the audit committee, the auditor shall attend every meeting of the audit committee held during the member’s term of office.

Marginal note:Calling meeting

• 909 (1) The auditor of an insurance holding company or a member of the audit committee may call a meeting of the audit committee.

• Marginal note:Right to interview

  (2) The chief internal auditor of an insurance holding company or any officer or employee of the insurance holding company acting in a similar capacity shall, at the request of the auditor of the insurance holding company and on receipt of reasonable notice, meet with the auditor.

Marginal note:Notice of errors

• 910 (1) A director or an officer of an insurance holding company shall forthwith notify the audit committee and the auditor of the insurance holding company of any error or misstatement of which the director or officer becomes aware in an annual statement or other financial statement on which the auditor or any former auditor has reported.

• Marginal note:Error noted by auditor

  (2) If the auditor or a former auditor of an insurance holding company is notified or becomes aware of an error or misstatement in an annual statement or other financial statement on which the auditor reported and in the auditor’s opinion the error or misstatement is material, the auditor or former auditor shall inform each director of the insurance holding company accordingly.

• Marginal note:Duty of directors

  (3) Where under subsection (2) the auditor or a former auditor of an insurance holding company informs the directors of an error or misstatement in an annual statement or other financial statement, the directors shall

  • (a) prepare and issue a revised annual statement or financial statement; or

  • (b) otherwise inform the shareholders and the Superintendent of the error or misstatement.

Qualified Privilege

Marginal note:Qualified privilege for statements

911 Any oral or written statement or report made under this Part by the auditor or a former auditor of an insurance holding company has qualified privilege.

SUBDIVISION 14Remedial Actions

Marginal note:Derivative action

• 912 (1) Subject to subsection (2), a complainant or the Superintendent may apply to a court for leave to bring an action under this Part in the name and on behalf of an insurance holding company or any of its subsidiaries, or to intervene in an action under this Part to which the insurance holding company or a subsidiary of the insurance holding company is a party, for the purpose of prosecuting, defending or discontinuing the action on behalf of the insurance holding company or the subsidiary.

• Marginal note:Conditions precedent

  (2) No action may be brought and no intervention in an action may be made under subsection (1) by a complainant unless the court is satisfied that

  • (a) the complainant has, not less than 14 days before bringing the application or as otherwise ordered by the court, given notice to the directors of the insurance holding company or the insurance holding company’s subsidiary of the complainant’s intention to apply to the court under subsection (1) if the directors of the insurance holding company or the insurance holding company’s subsidiary do not bring, diligently prosecute or defend or discontinue the action;

  • (b) the complainant is acting in good faith; and

  • (c) it appears to be in the interests of the insurance holding company or the subsidiary that the action be brought, prosecuted, defended or discontinued.

• Marginal note:Notice to Superintendent

  (3) A complainant under subsection (1) shall give the Superintendent notice of the application and the Superintendent may appear and be heard in person or by counsel at the hearing of the application.

Marginal note:Powers of court

• 913 (1) In connection with an action brought or intervened in under subsection 912(1), the court may at any time make any order it thinks fit including, without limiting the generality of the foregoing,

  • (a) an order authorizing the Superintendent, the complainant or any other person to control the conduct of the action;

  • (b) an order giving directions for the conduct of the action;

  • (c) an order directing that any amount adjudged payable by a defendant in the action be paid, in whole or in part, directly to former and present security holders of the insurance holding company who are entitled to participate in its profits or of the subsidiary instead of to the insurance holding company or to the subsidiary; and

  • (d) an order requiring the insurance holding company or the subsidiary to pay reasonable legal fees incurred by the Superintendent or the complainant in connection with the action.

• Marginal note:Jurisdiction

  (2) Despite subsection (1), the court may not make any order in relation to any matter that would, under this Part, require the approval of the Minister or the Superintendent.

Marginal note:Status of shareholder approval

• 914 (1) An application made or an action brought or intervened in under this Subdivision need not be stayed or dismissed by reason only that it is shown that an alleged breach of a right or duty owed to the insurance holding company or its subsidiary has been or might be approved by the shareholders of the insurance holding company or subsidiary or both, but evidence of approval by the shareholders may be taken into account by the court in making an order under section 913.

• Marginal note:Court approval to discontinue

  (2) An application made or an action brought or intervened in under this Subdivision shall not be stayed, discontinued, settled or dismissed for want of prosecution without the approval of the court given on such terms as the court thinks fit and, if the court determines that the interests of any complainant might be substantially affected by any stay, discontinuance, settlement or dismissal, the court may order any party to the application or action to give notice to the complainant.

Marginal note:No security for costs

• 915 (1) A complainant is not required to give security for costs in any application made or any action brought or intervened in under subsection 912(1) or section 916.

• Marginal note:Interim costs

  (2) In an application made or an action brought or intervened in under this Subdivision, the court may at any time order the insurance holding company or its subsidiary to pay to the complainant interim costs, including legal fees and disbursements, but the complainant may be held accountable by the court for those interim costs on final disposition of the application or action.

Marginal note:Application to rectify records

• 916 (1) If the name of a person is alleged to be or to have been wrongly entered or retained in, or wrongly deleted or omitted from, the securities register or any other record of an insurance holding company, the insurance holding company, a security holder of the insurance holding company or any aggrieved person may apply to a court for an order that the securities register or record be rectified.

• Marginal note:Notice to Superintendent

  (2) An applicant under this section shall give the Superintendent notice of the application and the Superintendent may appear and be heard in person or by counsel at the hearing of the application.

• Marginal note:Powers of court

  (3) In connection with an application under this section, the court may make any order it thinks fit including, without limiting the generality of the foregoing,

  • (a) an order requiring the securities register or other record of the insurance holding company to be rectified;

  • (b) an order restraining an insurance holding company from calling or holding a meeting of shareholders or paying a dividend to shareholders before the rectification;

  • (c) an order determining the right of a party to the proceedings to have the party’s name entered or retained in, or deleted or omitted from, the securities register or records of the insurance holding company, whether the issue arises between two or more security holders or alleged security holders, or between the insurance holding company and any security holder or alleged security holder; and

  • (d) an order compensating a party who has incurred a loss.

SUBDIVISION 15Liquidation and Dissolution

Interpretation

Definition of court

917 In this Subdivision, court means a court having jurisdiction in the place where the insurance holding company has its head office.

Application

Marginal note:Application of Subdivision

• 918 (1) This Subdivision does not apply to an insurance holding company that is an insolvent person or a bankrupt as those terms are defined in subsection 2(1) of the Bankruptcy and Insolvency Act.

• Marginal note:Staying proceedings on insolvency

  (2) Any proceedings taken under this Subdivision to dissolve or to liquidate and dissolve an insurance holding company shall be stayed if the insurance holding company is at any time found in a proceeding under the Bankruptcy and Insolvency Act to be an insolvent person as defined in subsection 2(1) of that Act.

• Marginal note:Winding-up and Restructuring Act does not apply

  (3) The Winding-up and Restructuring Act does not apply to an insurance holding company.

Marginal note:Returns to Superintendent

919 A liquidator appointed under this Subdivision to wind up the business of an insurance holding company shall provide the Superintendent with such information relating to the business and affairs of the insurance holding company in such form as the Superintendent requires.

Simple Liquidation

Marginal note:No property and no liabilities

• 920 (1) An insurance holding company that has no property and no liabilities may, if authorized by a special resolution of the shareholders or, if there are no shareholders, by a resolution of all the directors, apply to the Minister for letters patent dissolving the insurance holding company.

• Marginal note:Dissolution by letters patent

  (2) Where the Minister has received an application under subsection (1) and is satisfied that all the circumstances so warrant, the Minister may issue letters patent dissolving the insurance holding company.

• Marginal note:Effect of letters patent

  (3) An insurance holding company in respect of which letters patent are issued under subsection (2) ceases to exist on the day stated in the letters patent.

Marginal note:Proposing liquidation

• 921 (1) The voluntary liquidation and dissolution of an insurance holding company, other than an insurance holding company referred to in subsection 920(1),

  • (a) may be proposed by its directors; or

  • (b) may be initiated by way of a proposal made by a shareholder who is entitled to vote at an annual meeting of shareholders in accordance with sections 770 and 771.

• Marginal note:Terms must be set out

  (2) A notice of any meeting of shareholders at which the voluntary liquidation and dissolution of an insurance holding company is to be proposed shall set out the terms of the proposal.

Marginal note:Shareholders’ resolution

922 Where the voluntary liquidation and dissolution of an insurance holding company is proposed, the insurance holding company may apply to the Minister for letters patent dissolving the insurance holding company if authorized by a special resolution of the shareholders or, where the insurance holding company has issued more than one class of shares, by special resolution of each class of shareholders whether or not those shareholders are otherwise entitled to vote.

Marginal note:Approval of Minister required

• 923 (1) No action directed toward the voluntary liquidation and dissolution of an insurance holding company shall be taken by an insurance holding company, other than as provided in sections 921 and 922, until an application made by the insurance holding company pursuant to section 922 has been approved by the Minister.

• Marginal note:Conditional approval

  (2) Where the Minister is satisfied on the basis of an application made under section 922 that the circumstances warrant the voluntary liquidation and dissolution of an insurance holding company, the Minister may, by order, approve the application.

• Marginal note:Effect of approval

  (3) Where the Minister has approved an application made pursuant to section 922 with respect to an insurance holding company, the insurance holding company shall not carry on business except to the extent necessary to complete its voluntary liquidation.

• Marginal note:Liquidation process

  (4) Where the Minister has approved an application made pursuant to section 922 with respect to an insurance holding company, the insurance holding company shall

  • (a) cause notice of the approval to be sent to each known claimant against and creditor of the insurance holding company;

  • (b) publish notice of the approval once a week for four consecutive weeks in the Canada Gazette and once a week for two consecutive weeks in one or more newspapers in general circulation in each province in which the insurance holding company transacted any business within the preceding twelve months;

  • (c) proceed to collect its property, dispose of property that is not to be distributed in kind to its shareholders, discharge or provide for all its obligations and do all other acts required to liquidate its business; and

  • (d) after giving the notice required under paragraphs (a) and (b) and adequately providing for the payment or discharge of all its obligations, distribute its remaining property, either in money or in kind, among its shareholders according to their respective rights.