Corporate Interrelationships (Insurance Companies and Insurance Holding Companies) Regulations

2 For the purpose of subsections 76.01(1) and 755.1(1) of the Act, the prescribed conditions are that

• (a) the consideration received by the insurance company or the insurance holding company for the delivery shares is equal to the fair market value of those shares at the time of their issuance;

• (b) the class of shares of which the delivery shares are a part is widely held and shares of that class are actively traded on any of the following stock exchanges in Canada, namely,

  • (i) the Canadian Venture Exchange,

  • (ii) The Montreal Exchange, or

  • (iii) the Toronto Stock Exchange;

• (c) the sole purpose of effecting the acquisition by the particular subsidiary of delivery shares is to transfer them, as set out in paragraph 3(b), to the shareholders of another body corporate;

• (d) immediately before the acquisition of the delivery shares by the particular subsidiary, the other body corporate and its shareholders deal at arm’s length, to be determined in accordance with the Income Tax Act, with the insurance company or the insurance holding company and the particular subsidiary; and

• (e) immediately before the acquisition of the delivery shares by the particular subsidiary, the particular subsidiary and the other body corporate are not resident in Canada, for the purposes of the Income Tax Act.