Insurance Companies Act

Marginal note:Restriction on control and substantial investments

• 969 (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.