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Income Tax Regulations

Version of section 1408 from 2023-01-01 to 2024-04-01:

  •  (1) The definitions in this subsection apply in this Part.

    accident and sickness insurance

    accident and sickness insurance has the same meaning as in the schedule to the Insurance Companies Act. (assurance accidents et maladie)

    acquisition costs

    acquisition costs[Repealed, SOR/2002-123, s. 2]

    amount payable

    amount payable, in respect of a policy loan at a particular time, means the amount of the policy loan and the interest that is outstanding on the policy loan at that time. (montant payable)

    benefit

    benefit, in respect of a policy, includes

    • (a) a policy dividend (other than a policy dividend in respect of a policy described in paragraph 1403(1)(c)) in respect of the policy to the extent that the dividend was specifically treated as a benefit by the insurer in determining a premium for the policy, and

    • (b) an expense of maintaining the policy after all premiums in respect of the policy have been paid to the extent that the expense was specifically provided for by the insurer in determining a premium for the policy,

    but does not include

    • (c) a policy loan,

    • (d) interest on funds left on deposit with the insurer under the terms of the policy, and

    • (e) any other amount under the policy that was not specifically provided for by the insurer in determining a premium for the policy. (bénéfice)

    capital tax

    capital tax means a tax imposed under Part I.3 or VI of the Act or a similar tax imposed under an Act of the legislature of a province. (impôt sur le capital)

    cash surrender value

    cash surrender value has the meaning assigned by subsection 148(9) of the Act. (valeur de rachat)

    claim liability

    claim liability[Repealed, 2022, c. 19, s. 84]

    contractual service margin

    contractual service margin for a group of insurance contracts of an insurer, or a group of reinsurance contracts held by the insurer, at the end of a taxation year, has the same meaning as in subsection 138(12) of the Act. (marge sur services contractuels)

    deposit accounting insurance policy

    deposit accounting insurance policy has the meaning assigned by subsection 138(12) of the Act. (police d’assurance à comptabilité de dépôt)

    extended motor vehicle warranty

    extended motor vehicle warranty[Repealed, 2022, c. 19, s. 84]

    general amending provision

    general amending provision[Repealed, 2022, c. 19, s. 84]

    group of insurance contracts

    group of insurance contracts of an insurer has the same meaning as in subsection 138(12) of the Act. (groupe de contrats d’assurance)

    group of life insurance contracts

    group of life insurance contracts of an insurer has the same meaning as in subsection 138(12) of the Act. (groupe de contrats d’assurance-vie)

    group of life insurance contracts in Canada

    group of life insurance contracts in Canada of an insurer has the same meaning as in subsection 138(12) of the Act. (groupe de contrats d’assurance-vie au Canada)

    group of reinsurance contracts

    group of reinsurance contracts held by an insurer has the same meaning as in subsection 138(12) of the Act. (groupe de contrats de réassurance)

    group of segregated fund policies

    group of segregated fund policies of an insurer has the same meaning as in subsection 138(12) of the Act. (groupe de polices à fonds réservé)

    interest

    interest, in relation to a policy loan, has the meaning assigned by subsection 138(12) of the Act. (intérêt)

    lapse-supported policy

    lapse-supported policy means a life insurance policy that would require materially higher premiums if premiums were determined using policy lapse rates that are zero after the fifth policy year. (police fondée sur les déchéances)

    liability for incurred claims

    liability for incurred claims for a group of insurance contracts of an insurer at the end of a taxation year has the same meaning as in subsection 138(12) of the Act. (passif au titre des sinistres survenus)

    liability for remaining coverage

    liability for remaining coverage for a group of insurance contracts of an insurer at the end of a taxation year has the same meaning as in subsection 138(12) of the Act. (passif au titre de la couverture restante)

    life insurance policy

    life insurance policy has the same meaning as defined in subsection 138(12) of the Act. (police d’assurance-vie)

    life insurance policy in Canada

    life insurance policy in Canada has the same meaning as defined in subsection 138(12) of the Act. (police d’assurance-vie au Canada)

    modified net premium

    modified net premium, in respect of a premium under a policy (other than a prepaid premium under a policy that cannot be refunded except on termination of the policy), means

    • (a) where all benefits (other than policy dividends) and premiums (other than the frequency of payment of premiums) in respect of the policy are determined at the date of issue of the policy, the amount determined by the formula

      A × [(B + C) / (D + E)]

      where

      A
      is the amount of the premium,
      B
      is the present value, at the date of the issue of the policy, of the benefits to be provided under the terms of the policy after the day that is one year after the date of the issue of the policy,
      C
      is the present value, at the date of the issue of the policy, of the benefits to be provided under the terms of the policy after the day that is two years after the date of the issue of the policy,
      D
      is the present value, at the date of the issue of the policy, of the premiums payable under the terms of the policy on or after the day that is one year after the date of the issue of the policy, and
      E
      is the present value, at the date of the issue of the policy, of the premiums payable under the terms of the policy on or after the day that is two years after the date of the issue of the policy,

      except that the amount determined by the formula in respect of the premium for the second year of a policy is deemed to be the amount that is 50% of the total of

      • (i) the amount that would otherwise be determined under the formula, and

      • (ii) the amount of a one-year term insurance premium (determined without regard to the frequency of payment of the premium) that would be payable under the policy; and

    • (b) in any other case, the amount that would be determined under paragraph (a) if that paragraph applied and the amount were adjusted in a manner that is reasonable in the circumstances. (prime nette modifiée)

    mortgage insurance

    mortgage insurance has the same meaning as in the schedule to the Insurance Companies Act. (assurance hypothécaire)

    net premium for the policy

    net premium for the policy[Repealed, SOR/2002-123, s. 2]

    non-cancellable or guaranteed renewable accident and sickness policy

    non-cancellable or guaranteed renewable accident and sickness policy, includes a non-cancellable or guaranteed renewable accident and sickness benefit under a group policy. (police d’assurance contre les accidents et la maladie non résiliable ou à renouvellement garanti)

    participating life insurance policy

    participating life insurance policy has the meaning assigned by subsection 138(12) of the Act. (police d’assurance-vie avec participation)

    policy liability

    policy liability[Repealed, 2022, c. 19, s. 84]

    policy loan

    policy loan has the meaning assigned by subsection 138(12) of the Act. (avance sur police)

    post-1995 life insurance policy

    post-1995 life insurance policy[Repealed, 2022, c. 19, s. 84]

    post-1995 non-cancellable or guaranteed renewable accident and sickness policy

    post-1995 non-cancellable or guaranteed renewable accident and sickness policy[Repealed, 2022, c. 19, s. 84]

    pre-1996 life insurance policy

    pre-1996 life insurance policy[Repealed, 2022, c. 19, s. 84]

    pre-1996 non-cancellable or guaranteed renewable accident and sickness policy

    pre-1996 non-cancellable or guaranteed renewable accident and sickness policy[Repealed, 2022, c. 19, s. 84]

    qualified annuity

    qualified annuity means an annuity contract issued before 1982, other than a deposit administration fund policy or a policy referred to in paragraph 1403(7)(c),

    • (a) in respect of which regular periodic annuity payments have commenced;

    • (b) in respect of which a contract or certificate has been issued that provides for regular periodic annuity payments to commence within one year after the date of issue of the contract or certificate;

    • (c) that is not issued as or under a registered retirement savings plan, registered pension plan or deferred profit sharing plan and that

      • (i) does not provide for a guaranteed cash surrender value at any time, and

      • (ii) provides for regular periodic annuity payments to commence not later than the attainment of age 71 by the annuitant; or

    • (d) that is issued as or under a registered retirement savings plan, registered pension plan or deferred profit sharing plan, if the interest rate is guaranteed for at least 10 years and the plan does not provide for any participation in profits, directly or indirectly. (rente admissible)

    reinsurance commission

    reinsurance commission[Repealed, 2022, c. 19, s. 84]

    reinsurance contract held amount

    reinsurance contract held amount for a group of reinsurance contracts held by an insurer at the end of a taxation year has the same meaning as in subsection 138(12) of the Act. (montant au titre des contrats de réassurance détenus)

    reinsurance recoverable amount

    reinsurance recoverable amount of an insurer means an amount reported as a reinsurance asset of the insurer as at the end of a taxation year in respect of an amount recoverable from a reinsurer. (somme à recouvrer au titre de la réassurance)

    relevant authority

    relevant authority of an insurer has the same meaning as in subsection 138(12) of the Act. (autorité compétente)

    reported reserve

    reported reserve of an insurer at the end of a taxation year in respect of a policy that insures an earthquake risk in Canada, or a fidelity risk, a nuclear risk or a risk related to a financial loss of a lender on a loan made on the security of real property, means the amount equal to the positive or negative amount of the reserve reported as at the end of the year. (provision déclarée)

    segregated fund

    segregated fund has the meaning assigned by subsection 138.1(1) of the Act. (fonds réservé)

    segregated fund policy

    segregated fund policy has the meaning assigned by subsection 138.1(1) of the Act. (police à fonds réservé)

    title insurance

    title insurance has the same meaning as in the schedule to the Insurance Companies Act. (assurance de titres)

  • (2) [Repealed, 2022, c. 19, s. 84]

  • (3) For the purpose of the formula referred to in the definition modified net premium in subsection (1), it may be assumed that premiums are payable annually in advance.

  • (4) [Repealed, 2022, c. 19, s. 84]

  • (5) For the purposes of this Part, any rider that is attached to a life insurance policy and that provides for additional life insurance or for an annuity is a separate life insurance policy.

  • (6) For the purposes of this Part, any rider that is attached to a policy and that provides for additional non-cancellable or guaranteed renewable accident and sickness insurance, as the case may be, is a separate non-cancellable or guaranteed renewable accident and sickness policy.

  • (7) [Repealed, 2022, c. 19, s. 84]

  • (8) [Repealed, 2022, c. 19, s. 84]

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • SOR/99-269, s. 6
  • SOR/2002-123, ss. 2, 3
  • 2009, c. 2, s. 101
  • 2010, c. 25, s. 80
  • 2022, c. 19, s. 84

Date modified: