Insurance Companies Act

Marginal note:Adequacy of assets — property and casualty companies

• 516 (1) A property and casualty company shall, in relation to its operations, maintain assets the total value of which, when determined in accordance with the accounting principles referred to in subsection 331(4), or when determined on the basis of the market value of those assets, whichever way produces the greater total value, is at least equal to the amount calculated by subtracting from the total of the following amounts an amount in respect of risks against which the company is reinsured that is determined in accordance with the prescribed formula:

  • (a) a reserve for actuarial and other policy liabilities of the company the amount of which is determined on the same basis as the reserve included in the annual statement required under section 665,

  • (b) the other liabilities of the company, and

  • (c) an amount determined in accordance with the prescribed formula the elements of which include amounts in respect of one or more of the following in respect of a prescribed class of policies, namely,

    • (i) unearned premiums,

    • (ii) provision for claims incurred but unpaid,

    • (iii) premium income during the preceding year, and

    • (iv) claims incurred during the prescribed period,

    and shall comply with any regulations in relation to the requirement to maintain assets of a particular value.

• Marginal note:Regulations and guidelines

  (2) The Governor in Council may make regulations and the Superintendent may make guidelines respecting the maintenance by property and casualty companies of assets of a particular value.

• Marginal note:Regulation may provide for discretion

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

• Marginal note:Directives

  (4) Notwithstanding that a property and casualty company is complying with regulations or guidelines made under subsection (2), the Superintendent may, by order, direct the company to increase its assets.

• Marginal note:Compliance

  (5) A property and casualty company shall comply with an order made under subsection (4) within such time as the Superintendent specifies therein.