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

Act current to 2024-05-14 and last amended on 2024-01-01. Previous Versions

PART XVIIInsurance Holding Companies (continued)

DIVISION 7Ownership (continued)

Marginal note:Interest of securities underwriter

 This Division does not apply to a securities underwriter in respect of shares of a body corporate or ownership interests in an unincorporated entity that are acquired by the underwriter in the course of a distribution to the public of those shares or ownership interests and that are held by the underwriter for a period of not more than six months.

  • 2001, c. 9, s. 465

Marginal note:Arrangements to effect compliance

  •  (1) The directors of an insurance holding company may make such arrangements as they deem necessary to carry out the intent of this Division and, in particular, but without limiting the generality of the foregoing, may

    • (a) require any person in whose name a share of the insurance holding company is held to submit a declaration setting out

      • (i) the beneficial ownership of the share, and

      • (ii) such other information as the directors deem relevant for the purposes of this Division;

    • (b) require any person who wishes to have a transfer of a share registered in the name of, or to have a share issued to, that person to submit a declaration referred to in paragraph (a) as though the person were the holder of that share; and

    • (c) determine the circumstances in which a declaration referred to in paragraph (a) is to be required, the form of the declaration and the times at which it is to be submitted.

  • Marginal note:Order of Superintendent

    (2) The Superintendent may, by order, direct an insurance holding company to obtain from any person in whose name a share of the insurance holding company is held a declaration setting out the name of every entity controlled by that person and containing information concerning

    • (a) the ownership or beneficial ownership of the share; and

    • (b) such other related matters as are specified by the Superintendent.

  • Marginal note:Compliance required

    (3) As soon as possible after receipt by an insurance holding company of a direction under subsection (2),

    • (a) the insurance holding company shall comply with the direction; and

    • (b) every person who is requested by the insurance holding company to provide a declaration containing information referred to in subsection (1) or (2) shall comply with the request.

  • Marginal note:Outstanding declaration: effect

    (4) Where, pursuant to this section, a declaration is required to be submitted by a shareholder or other person in respect of the issue or transfer of any share, an insurance holding company may refuse to issue the share or register the transfer unless the required declaration is submitted.

  • 2001, c. 9, s. 465

Marginal note:Reliance on information

 An insurance holding company and any person who is a director or an officer, employee or agent of the insurance holding company may rely on any information contained in a declaration required by the directors pursuant to section 959 or on any information otherwise acquired in respect of any matter that might be the subject of such a declaration, and no action lies against the insurance holding company or any such person for anything done or omitted to be done in good faith in reliance on any such information.

  • 2001, c. 9, s. 465

Marginal note:Exemption regulations

 The Governor in Council may, by regulation, exempt from any of the provisions of this Division any transaction or any class of transactions involving the transfer of shares on the death of the beneficial owner thereof, or any arrangement made in contemplation of the death of the beneficial owner, to one or more members of the beneficial owner’s family, or to one or more trustees on their behalf.

  • 2001, c. 9, s. 465

Marginal note:Competition Act

 Nothing in, or done under the authority of, this Act affects the operation of the Competition Act.

  • 2001, c. 9, s. 465

DIVISION 8Business and Powers

Marginal note:Main business

  •  (1) Subject to this Part, an insurance holding company shall not engage in or carry on any business other than

    • (a) acquiring, holding and administering investments that are permitted by this Part;

    • (b) providing management, advisory, financing, accounting, information processing or other prescribed services to entities in which it has a substantial investment; and

    • (c) any other prescribed business.

  • Marginal note:Regulations

    (2) The Governor in Council may make regulations prescribing businesses or services for the purposes of subsection (1).

  • 2001, c. 9, s. 465

Marginal note:Restriction on partnerships

  •  (1) Except with the approval of the Superintendent, an insurance holding company shall not be a general partner in a limited partnership or a partner in a general partnership.

  • Meaning of general partnership

    (2) For the purposes of subsection (1), general partnership means any partnership other than a limited partnership.

  • 2001, c. 9, s. 465

Marginal note:Restriction on guarantees

  •  (1) An insurance holding company shall not guarantee on behalf of any person the payment or repayment of any sum of money.

  • Marginal note:Exception

    (2) Subsection (1) does not apply if

    • (a) the person on whose behalf the insurance holding company has undertaken to guarantee the payment or repayment is a subsidiary of the insurance holding company; and

    • (b) the subsidiary has an unqualified obligation to reimburse the insurance holding company for the full amount of the payment or repayment to be guaranteed.

  • Marginal note:Regulations

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

  • 2001, c. 9, s. 465

DIVISION 9Investments

Interpretation

Marginal note:Definitions

  •  (1) The definitions in subsection 490(1) apply in respect of insurance holding companies, subject to the following:

    • (a) the reference to “section 495” in the definition permitted entity is to be read as a reference to “section 971”; and

    • (b) the reference to “company” in the definition permitted entity is to be read as a reference to “insurance holding company”.

  • Marginal note:Members of an insurance holding company’s group

    (2) For the purpose of this Division, a member of an insurance holding company’s group is any of the following:

    • (a) an entity referred to in any of paragraphs 971(1)(a) to (f) that controls the insurance holding company;

    • (b) a subsidiary of the insurance holding company or of an entity referred to in any of paragraphs 971(1)(a) to (f) that controls the insurance holding company;

    • (c) an entity in which the insurance holding company, or an entity referred to in any of paragraphs 971(1)(a) to (f) that controls the insurance holding company, has a substantial investment; or

    • (d) a prescribed entity in relation to the insurance holding company.

  • Marginal note:Non-application of Division

    (3) This Division does not apply in respect of

    • (a) the holding of a security interest in real property, unless the security interest is prescribed under paragraph 984(a) to be an interest in real property; or

    • (b) the holding of a security interest in securities of an entity.

  • 2001, c. 9, s. 465

Investments

Marginal note:Investments

 Subject to this Division, an insurance holding company may invest its funds in the shares of or ownership interests in any entity or make any other investment that its directors consider necessary or advisable to manage the insurance holding company’s liquidity.

  • 2001, c. 9, s. 465

General Constraints on Investments

Marginal note:Investment standards

 The directors of an insurance holding company shall establish and the insurance holding company shall adhere to investment and lending policies, standards and procedures that a reasonable and prudent person would apply to avoid undue risk of loss and obtain a reasonable return.

  • 2001, c. 9, s. 465

Marginal note:Limit — business growth fund

  •  (1) The aggregate value of all ownership interests in the business growth fund and the entities that the business growth fund controls that an insurance holding company and its subsidiaries hold must not exceed $200,000,000.

  • Marginal note:Application

    (2) For the purposes of subsection (1), the value of an ownership interest is determined by the amount paid for it at the time of its issuance.

  • 2018, c. 27, s. 150

Marginal note:Restriction on control and substantial investments

  •  (1) Subject to subsections (2) to (3.4), no insurance holding company shall acquire control of, or hold, acquire or increase a substantial investment in, any entity other than a permitted entity.

  • Marginal note:Exception: indirect investments

    (2) An insurance holding company may acquire control of, or acquire or increase a substantial investment in, an entity other than a permitted entity by way of

    • (a) an acquisition of control of an entity referred to in any of paragraphs 971(1)(a) to (j), a specialized financing entity or a prescribed entity that controls or has a substantial investment in the entity; or

    • (b) an acquisition of shares or ownership interests in the entity by

      • (i) an entity referred to in any of paragraphs 971(1)(a) to (j), a specialized financing entity or a prescribed entity that is controlled by the insurance holding company, or

      • (ii) an entity controlled by an entity referred to in any of paragraphs 971(1)(a) to (j), a specialized financing entity or a prescribed entity that is controlled by the insurance holding company.

  • Marginal note:Exception: temporary investments, realizations and loan workouts

    (3) An insurance holding company may acquire control of, or acquire or increase a substantial investment in, an entity by way of

    • (a) a temporary investment permitted by section 974;

    • (b) an acquisition of shares of a body corporate or of ownership interests in an unincorporated entity permitted by section 975; or

    • (c) a realization of security permitted by section 976.

  • Marginal note:Business growth fund

    (3.1) Subject to section 968.1 and subsections (3.2) to (3.4), an insurance holding company may hold, acquire or increase a substantial investment in the business growth fund or any entity that the business growth fund controls.

  • Marginal note:For greater certainty

    (3.2) For greater certainty, an insurance holding company is prohibited from acquiring control of the business growth fund or any entity that the business growth fund controls.

  • Marginal note:Prohibition — entity

    (3.3) An insurance holding company is prohibited from holding or acquiring a substantial investment in the business growth fund or any entity that the business growth fund controls if the business growth fund or any entity that the business growth fund controls holds or acquires shares of, or other ownership interests in, any of the following entities, or in any entity that controls any of the following entities:

    • (a) an entity referred to in any of paragraphs 971(1)(a) to (j);

    • (b) an entity that is primarily engaged in the leasing of motor vehicles in Canada for the purpose of extending credit to a customer or financing a customer’s acquisition of a motor vehicle;

    • (c) an entity that is primarily engaged in providing temporary possession of personal property, including motor vehicles, to customers in Canada for a purpose other than to finance the customer’s acquisition of the property;

    • (d) an entity that acts as an insurance broker or agent in Canada; or

    • (e) an entity that is engaged in any prescribed activity.

  • Marginal note:Prohibition — capital and loans

    (3.4) An insurance holding company is prohibited from holding or acquiring a substantial investment in the business growth fund or any entity that the business growth fund controls if the business growth fund or any entity that the business growth fund controls holds shares of, or other ownership interests in, an entity or holds a loan made to an entity and, in respect of that entity and its affiliates, the aggregate value of the following exceeds $100,000,000:

    • (a) all ownership interests that are held by the insurance holding company, the insurance holding company’s subsidiaries, the business growth fund or the entities that the business growth fund controls, the value of those ownership interests as determined by the amount paid for them at the time each was first acquired by any of those entities; and

    • (b) the outstanding principal of all loans held by the business growth fund or the entities that the business growth fund controls.

  • Marginal note:Exception: uncontrolled event

    (4) An insurance holding company is deemed not to contravene subsection (1) if the insurance holding company acquires control of, or acquires or increases a substantial investment in, an entity solely as the result of an event not within the control of the insurance holding company.

  • Marginal note:Non-application of subsection (2)

    (4.1) No insurance holding company shall, under subsection (2), acquire control of, or acquire or increase a substantial investment in, an entity referred to in paragraph 971(1)(j).

  • Marginal note:Holding

    (4.2) If an insurance holding company holds a substantial investment in an entity referred to in paragraph 971(1)(j) that it acquired or increased under subsection (2) before the coming into force of subsection (4.1), the insurance holding company may continue to hold that substantial investment.

  • Marginal note:Application of other provision

    (5) Despite having acquired control of, or a substantial investment in, an entity under a particular provision of this Part, an insurance holding company may continue to control the entity or hold the substantial investment in the entity as though it had made the acquisition under another provision of this Part so long as the conditions of that other provision are met.

  • Marginal note:Timing of deemed acquisition

    (6) If an insurance holding company decides to exercise its right under subsection (5), the insurance holding company is deemed to be acquiring the control or the substantial investment under the other provision.

  • 2001, c. 9, s. 465
  • 2007, c. 6, s. 325
  • 2013, c. 40, s. 172
  • 2018, c. 27, s. 151

Marginal note:Regulations re limits

 The Governor in Council may make regulations

  • (a) respecting the determination of the amount or value of loans, investments and interests for the purposes of this Division;

  • (b) respecting the loans and investments, and the maximum aggregate amount of all loans and investments, that may be made or acquired by an insurance holding company and its prescribed subsidiaries to or in a person and any persons connected with that person;

  • (c) specifying the classes of persons who are connected with any person for the purposes of paragraph (b); and

  • (d) prescribing terms and conditions under which an insurance holding company may acquire control of, or acquire or increase a substantial investment in, a specialized financing entity.

  • 2001, c. 9, s. 465
 

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